The Joint Budget Committee is looking for a way to provide a big boost to Colorado’s investment in rural broadband, and a bill to do just that cleared the House Finance Committee Monday.
House Bill 1116 would allow the state to go after $250 million from the federal “Connect America” broadband grant program, although the state would have to obtain a waiver from the Federal Communications Commission to obtain the grant. Currently, states are prohibited from obtaining Connect America funds, but last May, the FCC granted New York that waiver. Colorado hopes to be the second state to get those dollars.
Under the bill, which is carried in the House by Republican Rep. Bob Rankin of Carbondale, the state’s broadband board would apply for the dollars and the waiver. The $250 million is normally the total over a 10-year period but Colorado’s application will be to get the entire amount all at once.
The broadband board would then disburse the funds to private companies through its own grant program. Connect America grants have already gone to telecomm companies in Colorado, such as CenturyLink, which received a $506 million grant to build out rural broadband in 33 states. The company could apply for another round of funding through the Colorado board, so long as it is for a different geographic area of the state than the original grant serves.
In his final State of the State address earlier this month, Gov. John Hickenlooper said that 80 percent of the state is now wired for high-speed internet. By the end of his term, 85 percent of the state should be wired and the entire state by 2020, but that may take a lot of money that the state just doesn’t have.
But putting high-speed broadband into rural communities left behind by the Front Range’s booming economy is viewed as a matter of economic survival, for schools, hospitals and small businesses that can’t compete with dial-up modems.
The state has been slow to find the dollars to build out rural high-speed internet. The only source to date has been the High Cost Support Mechanism (HCSM), but lawsuits and other problems have slowed the transfer of those funds to a trickle. In 2017, the HCSM transferred $9.4 million to a separate broadband fund, but estimates to build out high-speed internet could be anywhere from $150 million to $300 million.
Lawmakers are also working on legislation to transfer the HCSM in its entirety, over the next five years, to the broadband fund, but because of decreasing use of landline phones and cellular voice, which pays for the HCSM, those dollars are dwindling.
According to a JBC analysis, there is “no additional funding marked for rural broadband and no additional grant cycles are planned. This leaves the program with a lack of sustainable funding.”
The Connect America grant program could be the answer. According to the bill’s fiscal analysis, the program has nearly $2 billion available during the next decade. The FCC said the program is “designed to ensure that consumers in rural, insular, and high-cost areas have access to modern communications networks capable of providing voice and broadband service, both fixed and mobile, at rates that are reasonably comparable to those in urban areas.”
The monies go to auction around the first of each year, which means Colorado has to move with a purpose to get that waiver. Rankin told the committee the bill has to be in the governor’s hands for signature within the next week.
The bill was approved on a 12-1 vote. It is one of two bills with JBC sponsorship that the committee hopes will help speed up Colorado’s efforts to connect rural Colorado with broadband service.