Low-Income Residents Will Be Major Beneficiaries
PHADA President David A. Northern, Sr.
Even before the pandemic, it was clear how critically important internet access is to our way of life. We rely on it for our daily business, social and educational communications. The onset of Covid in March 2020 forced much of the world into isolation, further boosting our reliance on the internet and our dependence has increased exponentially since then. As we know all too well, however, many people still do not have adequate access, placing them at a major disadvantage.
Kathryn de Wit, Project Director for the Broadband Access Initiative at The Pew Charitable Trusts wrote last year that… “leading experts, advocates, and businesses have long touted research that clearly links increased broadband availability and adoption to better economic, social and educational outcomes.” She also described the stark impacts on households without access to broadband.
In recognition of this and other well-documented research, PHADA’s Board last spring adopted a resolution strongly supporting federal action to build on existing federal, state, and local initiatives to achieve universal broadband internet access. We believe real progress will be achieved as soon as the Biden Administration implements the 2021 infrastructure law that widely expands such services.
The Infrastructure Investment and Jobs Act (IIJA)
The IIJA, signed into law late last year, includes $65 billion to expand broadband access through the Department of Commerce, the Federal Communications Commission (FCC) and the Department of Agriculture (DoA). Among other things, the Act provides funds for the expansion of broadband access through infrastructure enhancements and internet subscription subsidies for low-income families.
HAs will be eligible for some grants, but most of the money will flow through formula allocations to states and territories. PHADA has been publicizing this information to alert HAs so they get engaged with their state governments and are then better positioned to tap grants once plans are announced. Here is a breakdown of the funding that will be available:
- Title I: The Broadband Equity Access and Deployment program (BEAD) authorizes $42.5 billion allocated by formula to states and territories to close the access gap for unserved and underserved areas.
- Title II: Tribal Connectivity Technical Amendments authorizes $2 billion to fund broadband adoption and infrastructure projects.
- Title III: Digital Equity Act authorizes $2.75 billion for:
- – Planning and implementing programs that promote digital equity.
- – Supporting digital improvement activities.
- – Building capacity related to broadband adoption.
- Title IV: Extending Middle Mile Broadband Infrastructure authorizes $1 billion to extend “middle mile” network capacity, reduce costs of serving unserved and underserved areas, and improve network resilience.
In addition to this funding, the FCC will administer $14.2 billion for an Affordable Connectivity Program (ACP) that will replace the existing Emergency Broadband Benefit program that supported internet subscription costs and equipment subsidies for low and moderate-income households. Under ACP, monthly benefits for households total $30 and overall eligibility will expand. We especially want to make members aware of this so they can appraise their residents of the funding. In a related matter, HUD announced a major initiative involving the ACP on May 9. Click here to read the Department’s press release
New Law is Preferable to Making Internet a “Utility”
Some housing professionals have raised the possibility of incorporating internet service into HUD’s existing utility cost calculations. PHADA discussed this approach but determined it would be inadvisable. This is so because, for public housing, the utility calculation directly impacts the amount of tenant rent and the amount of subsidy provided to cover that cost. Any increase in utility allowance costs to HAs would have to be factored into the complex operating fund formula. Our fear is that without significant additional annual appropriations, the cost of providing broadband service could become an unfunded mandate. Indeed, some members pointed out this is exactly what happened with the public housing drug elimination program more than a decade ago.
There would be similar challenges in the Section 8 program. Substantial rules govern how the cost of utilities are factored into establishing maximum unit rent, tenant portion of rent, and allowable subsidy amount. The effect of these rules is that an increase in the amount of the utility allowance is an increase in the amount of the subsidy to the household. Because the total subsidy per household is capped by limits on payment standards, higher utility costs decrease the maximum rent permitted for households with a voucher seeking a unit. This lower rent reduces choice for households, decreases the number of potential units and property owners, and could decrease the number of households receiving assistance.
In short, PHADA believes existing initiatives, local private sector support, and the new $65 billion law will produce a more effective and efficient mechanism for expanding broadband to all who need it. Certainly, if further improvements are needed after the new law takes effect, we will pursue those changes.
We will be featuring a session on how HAs can prepare for the new programs at our annual convention in just a few days. We will make that presentation available to all members and continue to publish information on this historic initiative as it becomes available. In the meantime, please feel free to contact our Washington staff if you would like more details.