Farm Bill Conferees Should Avoid Broadband Overbuild

Broadband overbuild using taxpayer dollars has been an ongoing problem across this country.  Some providers will obtain a grant or loan from a federal agency to build out broadband in rural communities and then use the funding to either deploy or upgrade equipment where broadband already exists rather than spend taxpayer resources on unserved communities where the cost to build networks is much higher.

Among the new programs found in this year’s Farm Bill, as passed by the House of Representatives, is a provision which would create a new grant program under the Rural Utilities Service (RUS) to provide for broadband deployment in rural areas of the country.  This provision is intended to provide incentives to deploy broadband in hard to reach communities.  Authorizing an additional $350 million each year for the next five years for this grant program, the bill seeks to expand broadband into unserved or underserved rural communities but contains little oversight into how the program funds will be allocated, nor does it provide oversight mechanisms that would ensure the funding is not used to build new networks on top of existing broadband infrastructure.

The Senate version of the Farm Bill also includes similar language providing for additional grant and loan funding for rural broadband programs.  However, the Senate language imposes important guardrails to ensure that rural broadband grants and loans will be dedicated to truly unserved areas of the country first; including requiring an area to be 90 percent unserved by high speed broadband of at least 25 Mbps downstream and 3 Mbps upstream to be eligible for the new RUS grant funding.  These provisions would help prevent the use of federal funding to overbuild on top of existing networks in areas that already attract private investment, and direct funds where they are needed most – in unserved communities that lack the benefits of high-speed broadband. 

The Senate provisions also further refine the definition of an unserved community; provides the opportunity for incumbent providers to attest whether a specific loan application area is already served by a broadband provider; and offers additional measures to protect against broadband overbuild using federal taxpayer dollars. 

Making unserved areas a priority for this new RUS grant program, and imposing guidelines for the program is critical to ensuring that the funding reaches communities where it is needed the most, rather than being wasted on communities that have already achieved broadband speeds at the minimum service levels through one or more other providers.  By adopting the Senate language of the Farm Bill, Congress will be positioned to better allocate taxpayer dollars and steer funding to those areas that need it most.