COVID-19 relief efforts and the recent Infrastructure Investment and Jobs Act (IIJA) have directed significant funds to improving broadband access on tribal lands. The Tribal Broadband Connectivity Program has allocated $980 million to tribal governments for broadband deployment on tribal lands, as well as for tele-health, distance learning, broadband affordability, and digital inclusion. By the application deadline of September 2021, the National Telecommunications and Information Administration (NTIA) received 280 applications and over $5 billion in funding requests, underscoring the immense need for investment in broadband infrastructure in Indian Country. The IIJA added an additional $2 billion to the existing pool and the NTIA has announced a few initial awards for network planning to spur broadband adoption and use, but the overwhelming majority of the awards have been delayed.
In this piece, we take a step back from ongoing grant cycles and present an overview of the range of funding mechanisms that Native Nations have used to finance their broadband deployment efforts. Before this recent infusion of funds, tribes needed to be resourceful and dogged to secure financing for their telecommunications infrastructure. A 2018 review of broadband funding by the Government Accountability Office (GAO) found that despite disproportionate need, on a whole “very little has gone directly to tribes or to tribally owned broadband providers.”
Between 2010 and 2017, less than 1% of FCC funding and about 14% of RUS funding went directly to tribes or tribally owned providers. For that same time period, while total broadband funding was $34.6 billion, tribes and tribally owned providers received $235 million, or about 0.7 percent. Drawing on published reports and interviews with a diverse group of tribes, varying in size, geography, and economic base, we cover how Native Nations have used loans, different federal, state and private grants, and invested their own resources in order to build indigenous networks.
USDA’s Rural Utilities Service (RUS) has been the most prominent and longest running funder for broadband projects in Indian Country. Since 2009, the Department of Commerce’s National Telecommunications and Information Administration(NTIA) also began supporting broadband efforts.
USDA’S Community Connect Grant
Beginning with a pilot program in 2002, RUS began providing grants for the provision of broadband service in rural America. The Community Connect grants aimed at “community-oriented connectivity” for unserved rural areas and was the only vehicle for tribal broadband for several years. For instance, the Yurok Tribe in Northern California received a $700,000 Community Connect grant to build a tower network on their reservation. The total spending on these grants for projects in Indian Country is difficult to estimate for the first few years of the program, but between 2010 and 2017, four tribal entities received $13.5million, representing 11% of the grant recipients over that period(GAO 18-682).
Applying for federal grants can be cumbersome, complex and costly (GAO 18-682). For instance, the Community Connect program asked for technical information on network design that meant tribes needed to hire outside experts or consultants to perform technical studies. It also asked for “a financial forecast” and to show that a network would provide a return on investment in five years. Often investments infrastructures require much longer to yield their benefits. Perhaps most onerous, Community Connect had a cost-share requirement, mandating that tribes provide matching funds of at least 15 percent from non-federal sources, not counting any in-kind contributions of goods or services. Jessica Engle, Former CEO of Yurok Telecommunications Corporation, explained: With USDA, there’s a huge match requirement. Where were we ever going to get that ability to come up with that? Even a 2%match on a $2 million grant would be more than we could afford.
Stimulus Spending—Broadband Technology Opportunities Program (BTOP) & Broadband Initiatives Program (BIP)(CRS R44416)
Stimulus spending under The 2009 American Recovery and Reinvestment Act provided $7.2 billion for the expansion of rural broadband, including $4.4 billion under the National Telecommunications and Information Administration’s (NTIA) Broadband Technology Opportunities Program (BTOP) grants and $2.5 billion to the RUS/USDA Broadband Initiatives Program (BIP) for grants, loans and grant/loan combinations. BTOP was focused on “middle mile” infrastructure and BIP focused on “last-mile” projects, bringing broadband to homes and offices. None of this funding was specifically earmarked for tribal lands, but six tribal authorities received BTOP grants and$179.2 million of the $2.9 billion awarded for BIP, went to projects serving Tribal Lands, Tribal Organizations, American Indians, and Alaska Natives. For instance (GAO-18-682),
- The Saint Regis Mohawk Tribe in New York received a $10.5 million BIP grant.
- TheNez Perce Broadband in Idaho received a BTOP grant of $1.6 million.
In 2018, Congress appropriated $600 million to RUS to establish a new loan and grant pilot program, called ReConnect Program. The program provides loans, grants, and loan-grant combinations for projects in areas where 90% of the households to be served do not have sufficient access to broadband, defined as 100 Mbps downstream and 20 Mbps upstream. For the funding cycle that closes in March 2022, RUS will award$350 million in grants, with a maximum award amount of $ 35 million for projects serving tribal communities. Unlike the Community Connect grant, ReConnect does not have a matching requirement for projects in tribal communities.
COVID-19 Response & the Bipartisan Infrastructure Act:
In recognition of the essential need for broadband through the pandemic, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Consolidated Appropriations Act (CAA), 2021 and the American Rescue Plan Act (ARPA) of 2021 all allocated significant funds for broadband, including on tribal lands. Among them were:
- $10 billion Coronavirus Capital Projects Fund for critical capital projects. The governing body of any Indian or Alaska Native tribe, band, nation, pueblo, village, community, component band, or component reservation was eligible for support. The Yurok Tribe’s Tribal Council directed $2.145 million of this funding for upgrades to their tower networks.
- $1 billion for the Tribal Broadband Connectivity Program administered by the NTIA.
Building on the COVID response, the Infrastructure Investment and Jobs Act (IIJA) is the largest investment to build broadband infrastructure and includes:
- The $42.5 billion Broadband Equity, Access, and Deployment Program, administered by the NTIA will support projects to construct and deploy broadband networks.
- The $1 billion Middle Mile Grants Program.
- An additional $2 billion for the Tribal Broadband Connectivity program administered by the NTIA.
Noting the infusion of funds in this space, Linnea Jackson, of the Hoopa Valley Public Utilities District stresses the need for support for Native Nations navigating these various opportunities.
Tribes are going to need strong consultants that they trust, someone that’s going to be there, someone that is going to help identify issues and resources to build a successful network. Is the solution wireless? Is it fiber? Is it a combination of both like us? How are we going to get the bandwidth needed to service the network? Who are your available providers? And one other critical factor is knowing and assessing the financial projections, which is a whole different type of expertise and skillset that you’re going to need. I think if you know that upfront, you’re better prepared to request or go after that budget, but you need to know all of your upfront, maintenance and ongoing costs.
The Congressional Research Service’s March 2021 report outlined the Broadband Funding available for Tribes in response to the pandemic. The Congressional Research Service’s January 2019 report covers the federal investment directed to tribal broadband.
More broadly, Common Sense Media has a succinct guide to federal broadband funding opportunities under the Infrastructure Investment and Jobs Act (IIJA), The American Rescue Plan Act (ARPA) and the Consolidated Appropriations Act (CAA21).
Broadband USA’s NTIA Funding site allows users to search through current broadband opportunities, filtering by funding agency or department, types of recipients and the purpose of the funding (deployment, digital inclusion, planning, etc.)
In addition to federal funding, more and more states are working on expanding broadband access. Some states, such as California, Florida, and Maine, have established broadband taskforces or state agencies. Some, like New York, Massachusetts and Indiana have set up their own funding mechanisms focused on rural broadband. Native Nations have been able to use these mechanisms for their networks. The Fond du Lac Band of the Minnesota Ojibwe won a Border-to-Border Broadband Development Grant Program from the state of Minnesota. The Nez Perce tribe used an Idaho Gem Grant. In 2020, Hunter Communications received an $ 8.2 million grant from the California Advanced Services Fund for the Hoopa Valley Broadband Initiative. Hoopa Valley will be working with Hunter Communications to deploy their hybrid fiber and wireless middle-mile and last-mile infrastructure, pointing to another mechanism for seeking funding.
For more on state efforts on expanding broadband deployment, read Pew Charitable Trusts’ Broadband Access Initiative December 2021 issue brief.
To understand the impact of state policies, offices and funds on broadband deployment read this 2020 Telecommunications Policy article by Brian Whitacare and Roberto Gallardo.
If applying for grants is too cumbersome, Native Nations can also partner with providers. A 2018 GAO report found that under BIP and BTOP programs of the 2009 Recovery Act, some tribes partnered with private providers, community access network providers, electric co-operatives and a regional consortium. For instance, the Pine Telephone Company and Choctaw Nation partnered on a BTOP grant of $9.5 million to deploy broadband infrastructure to underserved areas of Southeastern Oklahoma, including Choctaw Nation lands.
Wilson warns that although there are clear benefits to working in a partnership, where much of the heavy lifting can be done by an outside entity that has specific expertise, it is also important to be aware of the terms of that relationship.
It always sounds really good to have somebody come in and say, we’ll do that for you. We’ll do all that for you. We’ll build it for you. We’ll install for you and in 20 years, turn it over to you. Well, that’s great. But what does it mean? What am I giving up in order to have you build that for me? And what in the end am I actually getting?
Wilson stresses that it is important to be aware of the fine printof that partnership, particularly terms around revenue sharing,ownership of assets, workforce development and customerservice. She wants to ensure that tribes remain in the driver’sseat of that relationship.
Native nations have limited options when it comes to borrowing for broadband. Because reservation lands are not considered an asset owned by the tribe but instead held in trust by the United States, they can not be collateralized for securing loans. As a result, tribally-owned providers must often rely on the federal government as a lender, specifically the U.S. Department of Agriculture’s Rural Utilities Service (RUS). Under the rural Broadband Loans, Loan/Grant Combinations, and Loan Guarantees program (also known as the Farm Bill Broadband Loan and Loan Guarantee Program), and the Telecommunications Infrastructure Loan and Loan Guarantee Program RUS has provided loans and loan guarantees to provide funds for the construction, acquisition or improvement of broadband infrastructure in rural areas that are also accessible to tribes. Between 2010 and 2017, RUS provided 25.3 million in loans under the Farm Bill broadband loans and $ 246.5 million under the Telecommunications Infrastructure loan program respectively. (CRS Report R44416).
Cheyenne River Sioux Tribe Telephone Authority (CRSTTA) and Gila River Telecommunications Inc. (GRTI) which are two of ten tribal telecoms, have borrowed from RUS as far back as the 1970s and 1980s respectively. Belinda Nelson from GRTI explained that RUS loan funding was their only real option for financing back when they were looking to improve their telephone services in the 1980s. Tribes have also been able to work with RUS to update their broadband infrastructure. In 2010, the CRSTTA received a$37.8 million loan from RUS to finance their FTTH build. General Manager Mona Thompson emphasized the longevity of their relationship with RUS.
We have had a relationship with the USDA Rural Development since the first loan in the 1970s and it has been a good relationship. Over the years, USDA Rural Development RUS has approved the funding necessary to help upgrade the services we provide to our subscribers on the Cheyenne River Sioux Tribe reservation, including the most recent Fiber to the Home project.
Now that tribes have grant funding options available, Nelson explained the calculus each tribe must employ in order to decide what route is best for them. When a tribe considers whether a loan is more advantageous than a grant, it all depends on where they’re located, what assets they have, what economic sources they have that they can feed off of.”
RUS loans require a “strong structured business plan” to show that borrowers can pay back the debt and Nelson underscores the importance of understanding the financial feasibility of tribal ISPs. For GRTI, the close proximity to a major city like Phoenix made their business more viable.
Other tribes are more hesitant about acquiring debt. DanaeWilson, former manager of the Department of Technology Services for the Nez Perce tribe, worried about the long commitment a loan required and instead considered grants as the safer and more prudent options. As she explained.
How do you put your tribe in debt and then have to worry about paying that note off? So Nez Perce chose not to do that. We relied on grants and built our network over a large number of years using grants, and any kind of federal private state grant that we could get, we got.
Subsidies-FCC’s High-Cost Program
While RUS has been the more consequential funder for indigenous networks, the FCC’s high-cost program with an annual budget of $4.5 billion represents a substantially larger pot of money earmarked for broadband deployment in unserved areas. Under the Connect America Fund, the FCC offers subsidies to Eligible Telecommunications Carriers (ETC) through incentive-based models and competitive bidding to offset the carriers’ higher costs of building networks. As of 2018, only 11 tribes had providers designated as ETCs meaning only 11 tribal entities were eligible for this funding. Between 2010 and 2017, nine tribally owned providers did receive high cost support funding totaling $218.1 million.
The 2019 Native Nations Communications Task Force report to the FCC argued that ETC requirements are costly and complex for tribal providers. They recommend that the FCC should allow tribal entities lacking voice services to be designated ETCs, or to eliminate the ETC designation as a requirement for receiving high-cost support altogether for tribal entities. Additionally, ETCs providing service on tribal lands are obligated to engage with tribes on an annual basis since 2011. But the task force also found that this consultation is frequently reduced to a pro forma“Dear Tribal Leader” letter in place of any meaningful engagement.
In addition to these major avenues that offer financing for indigenous networks, there are other pools of funding and opportunities available within the federal government. Under the American Rescue Plan Act (ARPA) 2021, the Economic Development Administration has grant opportunities for indigenous communities to build foundational economic infrastructure, including broadband. Thinking beyond grant support, Mohawk Networks not only secured federal and state funding, but also worked with the Small Business Administration to be certified as a small disadvantaged business that makes them more competitive when pursuing government contracts. For indigenous groups that are not federally-recognized tribe, many of the above sources of funding are not available to them. Instead, the Nation of Hawaii, in Waimanalo secured funding for their community network through partnerships with the Internet Society and equipment support from Baicells. Regardless of the funding mechanism, Native Nations that have built indigenous networks have been creative and resilient about securing funding and making their networks sustainable.
Funder in Focus: USDA’s Rural Utilities Services
Rural Utilities Service(RUS) was first the rural Electrification Administration (REA), established in the 1930s, first to subsidize power companies providing electricity in rural areas, and then expanded to cover telephone services in the 1940s. In 1994, the REA became the RUS and its mandate now included electricity, telecommunications and water. RUS also expanded its work on telecommunications to include broadband deployment, beginning with a pilot program on household broadband in 2000. Since then, RUS operates a combination of a loan and grant programs to address broadband provision in rural areas. Between 2010 and 2017, RUS invested a total of approximately $512 in telecommunications projects serving tribal lands, tribal organizations, American Indians, and Alaska Natives. (CRS Report R44416 Footnote).
For more on RUS’shistory of funding rural broadband, read this 2019 CRS Report here.
For more on RUS’shistory and role in shaping rural broadband policy read media policy scholar Chris Ali here.