US Treasury boosts broadband with $583M in Capital Projects Fund awards

Money finally began flowing to state governments from the $10 billion Capital Projects Fund more than a year after it was created as part of the American Rescue Plan Act (ARPA) in March 2021, as the U.S. Treasury Department approved an initial batch of funding requests from four states.

The awards for Louisiana, New Hampshire, Virginia and West Virginia total $582.8 million and will cover projects designed to deliver connectivity to 200,373 locations.

Virginia was approved to receive the entirety of its $219.8 million Capital Projects Fund allotment, which will allow it to deliver broadband to an estimated 76,873 locations. The money is set to be distributed through the state’s existing Virginia Telecommunication Initiative (VATI) grant program, which requires operators and local government entities to jointly apply for funding. VATI funding can be used to cover up to 80% of project costs. Previous VATI grant recipients include Charter Communications, Cox Communications, Centurylink and Breezeline (formerly Atlantic Broadband).

The Treasury Department also granted Louisiana its full $176.7 million Capital Projects allocation. This will be used to connect 88,500 locations currently unserved by speeds of 25 Mbps downstream and 3 Mbps upstream, or about a quarter of all locations in the state lacking access to high-speed internet. Grants will be awarded through the state’s new Granting Unserved Municipalities Broadband Opportunities (GUMBO) program.

West Virginia also got its hands on its entire $136.3 million Capital Projects Fund allotment, with the money earmarked for projects which will connect 20,000 locations lacking high-speed internet. This funding will flow through three separate grant programs: the last-mile focused Line Extension Advancement and Development (LEAD) program; a Major Broadband Projects Strategies program focused on large-scale projects; and a GigReady program which will provide local governments with matching grants for broadband projects.

Finally, New Hampshire was awarded $50 million, or 41% of its overall allocation. This will be used to serve 15,000 locations in rural and remote areas. It will be distributed through the state’s Broadband Contract Program, which will prioritize projects which serve the most locations at the lowest cost.

The money adds to more than 30 Capital Projects awards which have been made to Tribal governments in recent months, though not all of these were solely focused on broadband deployments.

States which have not already done so have until September 24, 2022 to submit their Capital Projects Fund plans to the Treasury Department for approval. Though the department has stated broadband infrastructure is a key priority for funding, the money can be used for other kinds of projects which enable work, education and health monitoring.

The ARPA and related Capital Projects Fund money predates the Infrastructure Investment and Jobs Act, which will unleash another $65 billion for broadband projects. National Telecommunications and Information Administration chief Alan Davidson said recently the agency expects IIJA money to begin flowing later this year, though funds from its largest grant program – the $42.5 billion Broadband Equity, Access and Deployment (BEAD) program – is contingent on new broadband coverage maps from the Federal Communications Commission.