Municipal finance is not for the weary.

But for the wise – at least according to the number-crunchers enmeshed in that world – one particular sliver of municipal finance (issuing bonds) has long been a viable way for local communities to finance the construction of municipal broadband networks. And as one Communication Union District in Vermont has discovered, bonding is better – when it’s rated.

Shining a light on bond-backed municipal broadband projects is the recent announcement that ECFiber, Vermont's first Communications Union District (CUD), obtained a BB rating from Standard & Poor Global, the nation’s preeminent credit rating agency. The rating will allow ECFiber to pay lower borrowing costs to complete a network expansion project.

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“This is a historic moment,” Stan Williams, ECFiber’s municipal finance advisor said in a prepared statement. “For the first time, a CUD will be issuing a rated bond, which means that many more investors will be competing to buy those bonds, lowering the interest rate. ECFiber has been managed for its entire existence to reach this goal. It’s hard to overstate the importance of this achievement.”

East Central Vermont Telecommunications District governing board chairman F. X. Flinn added that the new bond rating "was made possible by over 16 years of grass-roots persistence, driven by a conviction that working together, our region could overcome the failure of the marketplace to offer decent broadband to all our homes and businesses."

In the wake of the new rules issued by the Federal Communications Commission (FCC) to prevent digital discrimination, digital equity advocates from California to Cleveland are leveraging the new federal rules to spur local action.

In Los Angeles, city leaders have passed an ordinance to combat what advocates say are discriminatory investment and business practices that leave historically marginalized communities without access to affordable high-quality Internet. Similar efforts to mobilize communities and local officials are underway in Oakland and Cleveland.

In November 2023, the FCC codified rules to prevent digital discrimination, outlining a complaint process whereby members of the public can offer evidence of digital discrimination being committed by Internet service providers (ISPs). Though the FCC order does not outline local policy solutions, nor does it empower localities to carry out enforcement of the federal rules, it has the potential to open up conversations between local advocates and elected officials about new ordinances, stronger enforcement of existing ones, or public investment to facilitate competition and the building of better broadband networks.

Los Angeles First City in Nation To Officially Define Digital Discrimination At Local Level

The local organizing work behind the proposed ordinance in LA dates back to 2022 when digital equity advocates began to document inequitable broadband access across the county.

In the quest to unlock billions of dollars in broadband infrastructure money, Louisiana and Virginia have outpaced all other states in the speed with which they are dispatching the BEAD program’s requirements. Louisiana was the first to complete the challenge process and is still the only state to have received approval for Volume 2 of its initial proposal. Virginia, meanwhile, has completed their challenge process but now appears locked in a battle with the NTIA over the low-cost plan parameters they intend to set. 

Information is trickling out about the challenge process in both states. We know that Louisiana received a reported 110,00 challenges and Virginia even more, counting 130,000 before the challenge window had even closed. It will be interesting to learn about challengers’ experience with the process, particularly for those nonprofits and local governments which have less experience with broadband mapping and data reporting. In the meantime, the states’ mandatory challenge process disclosures can give us some preliminary insight into how the challenge process is being used.

Two Maps Show Current Status of Challenge Process

NTIA guidance stipulated some transparency requirements for the post-challenge process that we are now beginning to see play out. Louisiana's and Virginia’s maps now show data on the challenges made during the process - who challenged the designation, what type of challenge they made, and, if available, the results of the adjudication process. (NTIA guidance requires “a summary of the challenge” and “a summary of the rebuttal,” which suggests slightly more detail than the maps provide.)

As the new year begins, the Institute for Local Self-Reliance (ILSR) announced today its latest tally of municipal broadband networks which shows a dramatic surge in the number of communities building publicly-owned, locally controlled high-speed Internet infrastructure over the last three years.

Since January 1, 2021, at least 47 new municipal networks have come online with dozens of other projects still in the planning or pre-construction phase, which includes the possibility of building 40 new municipal networks in California alone.

Waterloo, Iowa’s municipal broadband project has taken a major step forward after nearly two decades of planning.

Waterloo Fiber officials just launched their first limited fiber trial, will connect their first commercial customers in February, and are on target to deploy affordable fiber at speeds up to 10 gigabit per second (Gbps) to every last city resident by 2026.

When we last checked in with Waterloo in February of last year, the city was putting the finishing touches on a plan to spend $115 million to build a fiber backbone accessible to all 67,695 Waterloo residents, after locals approved the city issuing general obligation bonds to fund the start of the three-phase construction project.

Construction of the network began last summer at a groundbreaking ceremony hosted by Waterloo Mayor Quentin Hart.

“It will be the lifeline that connects our entire community, enabling businesses to thrive, students to excel and families to stay connected," Hart told attendees. "This fiber system will lay the foundation for a smart city innovation, economic growth and an enhanced quality of life for all our residents."

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Last month the city connected the first of four participants in a limited pilot project.

As digital inclusion practitioners and broadband-for-all advocates continue to push Congress to save the Affordable Connectivity Program (ACP), 22.5 million Americans now enrolled in the program are weeks away from being officially notified of its pending termination as ACP funds are on track to be depleted by the end of April.

The looming demise of the ACP – which provides income-eligible households with a $30 monthly voucher to pay for pricey Internet service bills ($75/month for Tribal citizens living on reservations) – comes at a crucial moment in the rollout of the “Internet For All” initiative. All 56 States and U.S. territories are poised to receive nearly $45 billion in broadband expansion funds from the bipartisan infrastructure law over the next year.

Separate from the BEAD program and Digital Equity Act funding, the bipartisan infrastructure law also established the ACP with a $14.2 billion allocation. At current enrollment rates, the program disburses about $650 million per month to Internet service providers (ISPs).

A looming new bill by Republican Kentucky State Senator Gex Williams could undermine decades of broadband progress made in the state’s capital city by a popular locally-owned utility, Frankfort Plant Board (FPB).

Home to 28,000 Kentuckians, local residents and utility officials in Frankfort are incensed at the bill, which they believe will unnecessarily result in higher rates, fewer jobs, and less broadband competition overall.

Williams is circulating a bill in the Kentucky state legislature that, if passed, would force FPB to sell its broadband division to a private-sector company and subject it to more stringent oversight requirements. In guest editorials circulated in the local press, Williams insists his goal is to “rein in” the FPB, which he deems part of a “runaway” government that lacks accountability.

But there’s no evidence for Williams’ allegations of limited accountability, and locals and activists alike believe that the legislator is simply running interference for regional broadband monopolies upset by the added competition created by the popular, publicly-owned utility.

Another Community-Owned Solution Addressing Market Failure

Like many local U.S. communities, Frankfort sees a notable dearth of meaningful broadband competition, resulting in patchy broadband coverage, slow speeds, high prices, and abysmal customer service. Enter the Frankfort Plant Board, which has been deploying affordable fiber access across the community under the NEXTBAND brand.

As we approached the new year, and after more than a decade of criticism, the FCC finally moved to tackle the agency’s long-dated definition of broadband with an eye on nudging the industry toward faster broadband deployments. But many industry watchers say the belated reform inquiry arrives late and long after other agencies have filled the void left by a lack of FCC leadership.

The FCC’s Notice of Inquiry (NOI), issued in November, asks whether the agency should finally adopt 100 Mbps (megabit per second) downstream, 20 Mbps upstream as the new standard U.S. definition of broadband.

“Ultimately, I believe it is essential in the United States to set big goals in order to get big things done,” FCC boss Jessica Rosenworcel said in a statement. “That is why we are kicking off this inquiry to update our national broadband standard to better align it with the standards in pandemic-era legislation of 100 Megabits per second down and 20 Megabits per second up and also set a long-term goal for gigabit speeds.”

But there’s nothing about the FCC’s planned definition that’s “big.”

Of particular annoyance to long-time industry watchers is the agency’s continued adherence to an upstream standard that remains out of touch with modern needs. While Senators and consumer groups had pushed for a symmetrical definition of 100 Mbps, cable industry lobbyists managed to convince the FCC to lower the upstream bar dramatically.

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Cable broadband speeds are notoriously topheavy, with downstream speeds far in excess of upstream speeds. While full duplex DOCSIS technology is supposed to eventually remedy that, the technology remains far from widespread deployment. 

The Federal Communication Commission (FCC) recently published rules for its broadband nutrition label provides a partial victory for Internet subscribers and a potential marketing advantage for fiber providers – but may pose a challenge for wireless Internet service providers.

Though the new rules were finalized in October, Internet Service Providers (ISPs) have until April 10, 2024 to publish their broadband labels, though providers with 100,000 or fewer subscriber lines have until October 10, 2024.

Just like the label on the back of packaged food in grocery stores helps shoppers understand the nutritional value of the food they are buying, the broadband label requires ISPs to disclose their broadband pricing and service information (at the point of sale) to help potential subscribers make informed decisions about the service they are signing up to get.

Transparency on Display

Though the label is just another red-tape requirement for some providers, others see it as an opportunity to show off the quality of their services.

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Google Fiber, for example, published via social media and its blog a preliminary version of its own broadband consumer label, just days after the final rule was published, and six months before its deadline.

After decades of failed broadband policy-making and incumbent provider neglect, many Tribal communities continue to lack affordable and reliable Internet connectivity. Limited access to capital for last-mile deployment on Tribal lands has been exacerbated by a vast “missing middle mile”  problem, and credible estimates put the costs of universal access on reservations at well over $10 billion.

Despite a historic investment in better Internet access from the federal government directly to Tribes, the problem is not even half solved. The first round of the Tribal Broadband Connectivity Program offered $2 billion in grants but received nearly $6 billion in requests from half of the 574 federally-recognized Tribes. With only $1 billion available in the final round of this program, an enormous funding gap remains.

Funding from the Broadband Equity, Access, and Deployment Program (BEAD) will have to be used strategically and collaboratively with Tribes to bridge this gap. The “high-cost area” match exemption could be an important tool to facilitate sustainable infrastructure deployment on Tribal lands, but it is not yet clear that states will make this exemption feasible.