US Treasury has doled out nearly $5B from Capital Projects Fund

ACA Summit, Washington DC – Much of the hype around broadband funding is focused on the $42.5 billion Broadband Equity, Access and Deployment (BEAD) program, but money continues to flow from the Capital Projects Fund. To date, the U.S. Treasury Department has awarded nearly $5 billion from the Capital Projects Fund across 33 states, program director Joseph Wender revealed at the ACA Summit on Wednesday.

That amount is almost half of the Treasury Department’s $10 billion allotment for the fund. States that have received funding thus far expect to connect 1.4 million households as a result, said Wender.

The Capital Projects Fund was created in March 2021 as part of the American Rescue Plan Act (ARPA), but the Treasury Department only began approving state funding requests last June. Louisiana, New Hampshire, Virginia and West Virginia were the first to receive their allotments.

The Treasury Department expects to dole out most of the remaining $5 billion this year. Projects using the Capital Projects Fund dollars must be completed by the end of 2026.

“Our charge is not to just award the money, but to put the money to use,” said Wender. “The good news is that there are already multiple states that have started construction.”

Wender went on to say the Treasury Department views itself as a partner to the states and ensures they adhere to program rules. But what’s also critical is giving states leeway to craft their own broadband projects.

“We’re saying to states, ‘you identify the areas of critical need, you know best your demographics, your topography…what the existing suite of providers are,’” he said. “You come up with your own programs, because I don’t think a one-size fits all approach works.”

As for whether federal funding can bridge the digital divide, Wender is optimistic the government's various program will ultimately connect or provide access “to virtually every location in the U.S.” However, success also depends on the state of the Affordable Connectivity Program (ACP), the FCC’s low-income broadband subsidy program.

Should the ACP run out of money, it would have a “cascading effect.” Not only would low-income households lose out on their internet connections, but it would also impact revenue for ISPs, said Wender. “It will dry up a revenue stream that you all are counting on as you’re going to these areas that you previously thought were not profitable,” he added.

Wender also praised state efforts on implementing broadband programs, saying there’s been “a dramatic increase in the sophistication” of what the state broadband offices are doing.

“They all talk to each other, the amount of note sharing and model sharing that’s going on has just been incredible,” he said.

Commenting on the overall funding landscape, Wender encouraged providers to get what they can from the tens of millions of federally-subsidized dollars, as such an opportunity “is not happening again anytime soon.”

“Don’t wait on BEAD,” he added. “Our money is available now…in some cases these are the low-hanging fruit of areas and states that are not served.”