Funds are flowing to the mountains for broadband

May 9—Bringing broadband internet service to rural communities has been expensive, challenging and drawn-out, but the $1 trillion infrastructure plan pushed by the Biden Administration has the ability to be a game-changer.

How quickly the new service can be implemented, or even if it will actually happen, are unknowns for now. At least one provider has concerns.

Aside from labor and procurement issues, JJ Boyd with Skyrunner internet service said he has observed that the large corporations in the market have, in the past, held large swaths of territory hostage and then fail to build the infrastructure.

A penalty is assessed if contracts aren't upheld, but often those costs are cheaper than doing the buildout in mountainous or difficult areas.

Boyd fears that could happen this go around in some of the difficult regions of Western North Carolina.

"About half the state is locked out from using grant funds," Boyd said of the federal dollars sent to states to help with the buildout. "We would have loved to add more addresses to our application, but due to RDOF, we were not able to do that. Now we have to sit and wait and see if they adhere to the federal rules to see who the award benefits."

RDOF stands for Rural Digital Opportunity Funds, and these are grants to expand broadband service nationwide. They were awarded through the Federal Communications Commission more than a year ago.

Areas that received federal funding under the RDOF program can't be included in state grant applications by companies looking to use the nearly $1 billion in state funds North Carolina has available for broadband under the American Rescue Plan Act.

N.C. Sen. Kevin Corbin, who represents the far western counties in the state, explained the RDOF "reverse bid" process that was used last year.

"A dollar figure is given to the bidders and they bid by saying how many customers they can hook up for the money," he said. "In addition, the providers have to provide some matching funds for infrastructure, which makes the funds go even further."

These funds are in addition to federal RDOF grants. In Haywood County, 5,732 customers are in territories claimed by Charter Communications to receive broadband services.

Charter Communications will be receiving a $7.61 million through RDOF to serve 5,479 customers, while Space Exploration Technologies will be receiving $517,287 to serve 244 customers in the county.

In Haywood, Charter's federal award averages $1,389 per household.

"If they could do it for that, why did they need federal funding to make it happen?" asked Boyd, who estimates the cost of serving rural households in Haywood is several times higher than that. "The way the funding is paid out to providers, our region isn't likely to get this built through RDOF. This is one of the most expensive regions to build infrastructure due to the population density, topography and trees. That all adds up to being very expensive to build infrastructure."

Charter has started work

The Charter buildout is being done through its Spectrum brand. Patti Michel, the senior director of regional communication for Charter Communication, said Spectrum's fiber-optic network buildout in Haywood County is part of the company's $5 billion or so investment in unserved rural communities. The work is being done with the help of $1.2 billion won in the Federal Communications Commission's (FCC) RDOF auction.

Michel said the company's RDOF expansion will provide broadband access to about 1 million customer locations across 24 states.

"In Haywood County, we expect to serve more than 5,400 additional locations. Construction is underway in multiple areas, including Maggie Valley, and we expect to launch Spectrum services in some markets as soon as this spring," she wrote. "Building in Western North Carolina has many challenges, including the terrain, weather, traversing railroad crossings and federal lands, pole attachments and permitting, so our project timelines remain fluid."

She advised local residents and business owners to visit to learn more about when their home or business may be able to receive Spectrum services.

Additionally, Michel said the Spectrum team is working with the Haywood County Broadband Committee and elected officials to explore state and other funding that would enable additional builds in other unserved locations.

Spectrum Internet Gig, with download speeds of 1 Gbps, will be available throughout the buildout area, she said.

Michel said Spectrum representatives have met with Haywood EMC and "looks forward to working collaboratively on broadband deployment."

Rural cooperatives have poles and lines serving the very homes that often don't have reliable broadband service, but simply pairing both services together is much more complicated, Boyd of Skyrunner explained.

"Part of engineering is getting pole or underground data," he explained as discussing the costs of negotiating with third-party providers to use rights-of-way or addressing new right-of-way arrangements with the N.C. Department of Transportation.

It's a time-consuming process to get information of every single power pole that may become part of the new fiber network being built. This forms the "make-ready cost," something that can't be known until the engineering work is done, Boyd said.

"In some cases, make-ready is $11,000 a pole," Boyd said.

In addition to the federal grant areas Spectrum agreed to serve in Haywood, the company has requested the county officials agree to pay up to $100,000 as part of a GREAT grant they are submitting.

State funds

In addition to the RDOF funds, the federal infrastructure bill set aside $65 billion for broadband expansion to be distributed through the states.

North Carolina will be receiving nearly $1 billion of that funding — an amount officials say should ensure availability of internet service at speeds of at least 100 megabytes per second download and 20 megabytes per second upload for more than 98% of North Carolina households.

"There's a lot of activity right now investing in high speed internet," said Nate Denny, deputy secretary of the N.C. Department of Information Technology. "Everyone is right to be concerned about how quickly any provider can execute on the work that's out there."

Denny has been on the forefront of statewide discussions concerning broadband availability across the state and ways to improve connectivity.

"If North Carolina truly wants to connect and serve all, we need to create opportunities for a wide range of providers with cooperatives, local outfits and large companies all participating," Denny said. "We want to see everybody given the level of funding to do this."

The first phase of funding is required to be used in census clusters that are unserved by high-speed internet. Phase II grant applications will be announced later this year and will go toward areas that have very limited internet connectivity, he added.

The broadband funding applications currently being considered are under the Growing Rural Economies with Access to Technology (GREAT) grants program.

Skyrunner received a grant last year for a project that Haywood County helped support financially, and service will be available in northern parts of Haywood later this summer, with lines in the southern portion of the grant area soon to follow.

Two grant applications under this program are pending review where companies are proposing to serve areas in Haywood County, one with Skyrunner and one with Charter.

Skyrunner's initial GREAT grant application last year ended up with more than 1,000 households on the application being disqualified after a protest where a company claimed it was serving the territory. The grant was pared down to 300 households and service in those areas is nearly ready to roll out, said Boyd of Skyrunner.

The protest issue might be mitigated going forward, Denny said. In addition to better information on where service exists, protest rules have changed.

Under the old rules, if a company served just one household in a census block, a protest was allowed, but Denny said now protesters must demonstrate they serve 10% of the households in a census block. Another requirement is that actual household data in each area being protested needs to be provided, something Denny believes will reduce protests, as well.

Once GREAT grant applications have been reviewed and awarded, the second round of funding will be under a program called Continuing Access to Broadband, CAB.

Under the GREAT grants, providers would approach a county and ask to partner on costs of providing service in a given area, but CAB allows counties to decide where service is most needed and then contact providers to see who is the best likely partner.