Federal infrastructure money to bring more Texans online

Gainesville Daily Register
By Ali Linan | CNHI News
October 20, 2023

AUSTIN — Roughly 7 million of the state’s 30 million residents don’t have access to broadband internet, but the recent influx of federal and possible state funding, which is pending voter approval, for broadband access has the potential to close that gap significantly.

Texas is slated to receive about $35.44 billion over five years from the bipartisan Infrastructure Investment and Jobs Act passed in 2021, the largest allotment given to any state. Of that, $3.3 billion has been earmarked for broadband expansion through the Broadband Equity, Access and Deployment, or BEAD, Program.

Separately, the Texas Legislature has allocated $1.5 billion in proposed additional broadband infrastructure spending, should voters approve the constitutional amendment — labeled Proposition 8 — in November. If passed, the law would allow the state to create a broadband infrastructure fund to expand high-speed broadband access and assist in the financing of connectivity projects.

Kelty Garbee, executive director of Texas Rural Funders, said the approval of Prop 8 is crucial to the movement of connecting rural Texans. Texas Rural Funders is a nonprofit funder collaborative that has been pushing for the expansion of broadband since 2017 — before the COVID-19 pandemic highlighted the need for interconnectivity.

“Our interest in broadband is to make sure that the rural areas of the state that produce so much of our food and energy and provide outdoor recreation don't get left behind,” Garbee said.

The gap between rural and urban broadband access comes down to numbers. It is expensive to lay down cable and provide reliable access to households and businesses that have large swaths of land between them, Garbee said.

Texas is home to the highest number of acres of farmland in the country, with nearly twice as much land dedicated to farming to the second highest state — Montana, according to data from the U.S. Department of Agriculture. But these businesses require a lot of land and distance between them, and larger broadband providers often see the cost outweighing the return on investment.

In addition, large providers offering services are usually the only one in the area, meaning they are able to dictate price due to lack of competition, sometimes pricing out many rural dwellers.

This is where rural providers like Totelcom Communications are trying to step in, CEO Jennifer Prather said. Totelcom Communications is a family- and locally owned business that focuses on serving small towns with populations under 10,000.

Prather said this means her business finds itself supporting wind and solar farms and some dairies as well as other agriculture.

“Rural Texas provides the food, fiber and fuel for Texas … but if you're going to work out there, you have to live out there, too,” Prather said.

Prather said the customers she serves have been traditionally left behind by large providers, but residents still need access to the internet for education, health care and entertainment.

She added that although the promise of broadband funding is exciting, the money isn’t yet in providers’ hands, and it will be some time before it is.

Providers in rural areas must first pull together the 25% required match to receive the federal dollars.

Prather said the match is important because it requires providers to have some skin in the game, but for rural communities it can be difficult to come up with the cash. She said this is where the passage of Prop 8 is important because money from the state fund would help rural providers meet the match and pull down the federal money.

In addition, the federal government requires a letter of credit from a bank guaranteeing the local 25% match is available.

Prather said small communities often don’t have a large bank like a JPMorgan Chase or Wells Fargo available to them and are instead served by local, community banks that don’t have high lending limits to accommodate the request. Prather said providers are working with their local federal representatives to find solutions.

It will also be some time before the money reaches providers.

Texas Comptroller Glenn Hegar said the state is still finalizing its plan for the infrastructure funding, which is due to the federal government by the end of the year. Once approved, the money will start heading to Texas.

Hegar said he anticipates the money to begin to reach providers in fall 2024. Hegar’s office oversees the Texas Broadband Development Office.

“It's not just about streaming a football game or some video, it's about communicating with the world. It's about the workforce, and so all of these things we are working on very diligently,” Hegar said.

If it all goes according to plan, the combined state and federal funding would be enough to get fiber to over 90% of Texans, Prather estimates.

“This is a once-in-a-lifetime opportunity, and so it's really important to be smart with it and make sure that we have all of those funds available,” Prather said.

The Infrastructure Investment and Jobs Act passed the U.S. Senate by a bipartisan vote of 69-30 in August 2021, followed in November of that year with passage in the U.S. House on a vote of 228-206.

Votes from Texas congressional delegates were split along party lines. U.S. Sen. Ted Cruz, in a statement at the time of the vote, suggested that the legislation was a "gateway drug to more reckless spending."

"The $1.2 trillion infrastructure bill that passed today contained only about $100 billion for roads and bridges," he said at the time. "As I've said before, if the Democrats wanted to pass a bill just to fix and expand our roads and bridges, they could have done it with near-unanimous support."