Broadband Projects Funded by COVID-19 Federal Funds

James Fisher
Managing IT Analyst

Victoria Potts
Senior Fiscal Analyst

The COVID-19 pandemic spurred the federal government and states to address broadband expansion by increasing funding for grant projects and focusing funds on increasing access to remote learning for children in K-12 schools and at college universities. This article provides a summary of some of the recent broadband expansion funding initiatives at the federal and State level.

Coronavirus Aid, Relief, and Economic Security (CARES) Act Funding

The CARES Act provided $150.0 billion in direct relief to states from the U.S. Department of the Treasury (Treasury) through the federal Coronavirus Relief Fund (CRF). Kansas was allocated $1.25 billion in CRF moneys. The Strengthening People and Revitalizing Kansas (SPARK) Task Force makes recommendations on the distribution of the CRF moneys in Kansas. The State Finance Council (Council) must approve those recommendations.

The SPARK Task Force recommended, and the Council approved, the transfer of $50.0 million from the CRF to the Kansas Department of Commerce Office of Broadband Initiatives for Connectivity Emergency Response Grant (CERG) funds. Governor Kelly created the Office of Broadband Initiatives through Executive Order No. 20-67 to oversee the CERG application process and distribute funds. Internet service providers (ISPs), local governments, nonprofits, and other private entities were eligible to apply for the grants.

For purposes of the grant applications, under served areas are defined as having download/upload speeds less than 25/3 Mbps. For areas that are considered served with adequate broadband, an entity could submit an application demonstrating a need. Applicants were required to provide a local match. The state share of the proposed project was not to exceed $10.0 million. Factors considered when evaluating proposals included: level of demonstrated need related to COVID-19, project readiness, broad community support, and geographic dispersion.

The Kansas Department of Commerce dispersed $49.2 Million in CERG funds for 67 projects.

The Council also approved $10.0 million from CRF to the Department of Commerce for a Provider Partnership Support program that would use existing ISP programs to provide broadband access to low-income households. ISPs would determine household eligibility, which is typically based on qualification for the National School Lunch Program and Supplemental Nutrition Assistance Program (SNAP). In exchange for state funding support in FY 2020, ISPs would provide continued support using existing funds for 6 to 12 months in FY 2021.

American Rescue Plan Act Funding

The American Rescue Plan Act (ARPA) established the Capital Projects Fund and appropriated $10.0 billion to Treasury and to states and other qualified entities. According to guidance from Treasury, the Capital Projects Fund allows for investment in high-quality broadband and other connectivity infrastructure, devices and equipment. Kansas’ allocation of the Capital Project Fund is $143.4 million.

When planning the expenditures of these funds, the Treasury encourages consultation with the statewide entity responsible for broadband planning and implementation. Fund recipients may use the moneys for critical capital projects that directly enable work, education, and health monitoring in response to the COVID-19 public health emergency. In its guidance, the Treasury presumes broadband infrastructure, digital connectivity, and multi-purpose community facility projects eligible for funding. The Treasury guidance also prohibits expenditure of funds on general infrastructure projects, including, but not limited to, highways, bridges, transit systems, and ports.

As of December 31, 2021, Kansas has expended none of its allocated Capital Projects funding.

Kansas Broadband Expansion Funding

House Sub. for SB 173 (2020 law), among other things, authorizes adding technology elements in a preservation plus project related to the Eisenhower Legacy Transportation Program. This includes laying broadband fiber or the conduit for broadband fiber.

The bill also authorized the Secretary of Transportation, working with the Office of Broadband Development within the Department of Commerce, to make grants for construction projects that expand and improve broadband service in Kansas.

The bill also established the Broadband Infrastructure Construction Grant Fund.
This fund is to be used to provide grants for the expansion of broadband service in Kansas.

The bill required $5.0 million from the State Highway Fund be transferred to the Broadband Infrastructure Construction Grant Fund on July 1, 2020, 2021, and 2022. On July 1, 2023, and each year thereafter through July 1, 2030, the annual required transfer is $10.0 million.