HighSpeedOptions prides itself on providing honest, quality content. While we may be compensated when you make a purchase through links on our site, all opinions are our own. Here's how we make money.
Table of Contents
Working remotely, hailing a ride on your phone, and just about every other convenience today is made possible with the internet. For those living in a city, internet service is nearly everywhere and oftentimes free to use in public spaces. Yet, millions of Americans in underserved areas still don’t have reliable access.
Currently, internet prices are dropping in the US, but many in Washington argue that it’s still not enough to close the digital divide that was amplified by COVID-19 lockdowns. Despite the pandemic winding down, the shift towards a remote or hybrid work model is here to stay. Industry leaders are calling it the “Next Great Disruption”, and the biggest hurdle in the way of a smooth transition is connectivity.
With the passing of the Infrastructure Investment and Jobs Act (IIJA), the broadband industry is set to receive aid for future development and affordability efforts to help close the gap on access to internet service. Below, we break down exactly what broadband benefits are included in this infrastructure bill.
Broadband Funds Included
Of the $1.2 trillion that make up this infrastructure bill, $65 billion is slated to support broadband internet improvements. Here’s a full breakdown of those funds:
- $42.45 billion for the Broadband Equity, Access, and Deployment program (BEAD) to fund grants related to broadband deployment and adoption in underserved areas
- $14.2 billion for the FCC to replace the Emergency Broadband Benefit (EBB) with the Affordable Connectivity Program, which will provide monthly $30 broadband stipends for eligible households
- $2.75 billion for the Digital Equity Program to support federal grants assisting rural communities, online accessibility, and digital skills training
- $2 billion for Rural Utilities Service’s (RUS) ReConnect Loan and Grant Program
- $2 billion for the Tribal Broadband Program, overseen by the National Telecommunications & Information Administation (NTIA)
- $1 billion for new NTIA middle-mile program to build a high-speed infrastructure for communities, businesses, and anchor institutions
- $600,000 for Private Activity Bonds (PABs) for states and local government to fund new broadband deployments
- $100,000 for each of the 50 states, Guam, and the Virgin Islands to dedicate to internet accessibility and affordability
Signed Into Law
The bill initially passed the Senate in August, and after stalling in the House of Representatives for a few months, came to a favorable 228-206 vote on November 5. Thirteen Republicans and all but six House Democrats helped push the bill through, and it was officially signed into law the following week.
The broadband initiatives within this infrastructure bill have been up for debate for decades in the United States. While seen as a world leader in many respects, the US falls behind multiple countries in terms of its connectivity and speeds.
At the beginning of 2021, the Federal Communications Commission (FCC) reported that about 6% of all Americans lack any access to broadband at home, which is about 19 million people. Worse, further FCC data shows that nearly 114 million Americans choose to not subscribe to broadband service for their homes. Instead, many opt for using their smartphones in place of home internet or simply don’t use it at all.
And in terms of speed, Ookla released their world speed test that found the US ranked thirteenth for the fastest broadband in the world – behind the likes of Hong Kong and France. The funds from this broadband plan aim to reduce and eventually eliminate the digital divide as it stands.
Eligibility for Funding
Rather than going directly to individuals, these broadband funds will be distributed among telecom providers for the most part. ISPs are expected to use these funds for deployment efforts that will help increase both access and speeds for millions of Americans.
Eligibility for funding depends on a number of factors, but the most telling qualifier is the speed threshold.
This infrastructure bill requires new broadband projects to provide download speeds of up to 100 Mbps and upload speeds of up to 20 Mbps. While this falls short of what some say is necessary (symmetrical download and upload speeds), many see this as a win.
Currently, the FCC defines broadband of internet service with at least 25 Mbps download and 3 Mbps upload speeds. It’s sufficient enough to support 1-2 people at home who lightly use the internet. However, with the shift towards remote work and schooling, this benchmark for broadband doesn’t quite cut it anymore.
The goal with this speed requirement is to encourage ISPs to build better, faster infrastructures that can not only support internet needs today, but decades to come as well.
Funds are anticipated to go out over the next few months to years as projects are developed and approved.
The current state of the internet leaves a lot to be desired, but things are certainly looking up. Broadband prices have been steadily decreasing for the last six years, and with this new funding lined up to support ISPs, pain points like accessibility and poor speeds are anticipated to follow suit, too.
A majority of this $65 billion will directly support infrastructure deployments in underserved areas and grant programs for Americans in need of internet access and financial assistance. We can expect those funds to be released slowly as ISPs create eligible broadband projects.