RD564 - Report on Commonwealth Connect: Governor Northam’s 2021 Plan to Connect Virginia
A. The Vision of Universal Broadband
Governor Northam’s vision of universal broadband means that every Virginian will have access to reliable, high-speed internet regardless of their geographic location or household income no later than 2024. The work over the past 4 years have connected hundreds of thousands of households, supported projects that cut the digital divide by more than half, established a nationally recognized state broadband program, and set Virginia on a path to be one of the first large states in the country to achieve universal broadband.
To achieve this goal, the Commonwealth’s broadband infrastructure must extend to all Virginians to whom it can practically be extended. Additionally, it will require the creation of new policy structures and models of service delivery to support affordable access to the internet for those who cannot afford it via that infrastructure.(*1)
Since 2017, the Commonwealth has deployed approximately $124,000,000 in grant funding to connect more than 140,000 homes and businesses. When the Governor entered office, it was estimated that 500,000 connections were needed for unserved Virginians. Now, that number is down to at least 233,500.(*2) During this period the Office of Broadband was created at the Department of Housing and Community Development (DHCD) to administer broadband grants and assist localities when planning for universal broadband.
2021 saw many major broadband announcements. In March, the Governor signed legislation from the General Assembly to make permanent an innovative pilot program under which investor-owned electric utilities were able to provide broadband capacity to unserved areas of the Commonwealth. A few months later, Governor Northam and the General Assembly invested an additional $700 million in American Rescue Plan Funding to expedite deployment of last-mile broadband infrastructure across the state.
In response to this increased funding the Virginia Telecommunication Initiative (VATI), a program that funds public-private partnerships providing targeted financial assistance to extend broadband service to areas currently unserved by a provider, saw an unprecedented increase in requests. In September the VATI program received 57 applications from 84 localities, requesting $943 million in funding to connect over 250,000 Virginia homes and businesses.(*3) These applications leveraged $1.15 billion in private and local matching funds, continuing the program's efficient use of public funds and bringing the total for project costs to $2 billion.
Awards are expected to be announced in December and it is likely that the next administration will be able to have projects engineered, approved, funded, and under construction that will completely close the digital divide, making Virginia the first large state to do so. These once-in-a-lifetime investments will reduce the goal of closing the digital divide and achieving universal broadband coverage from 2028 to 2024.
B. How the program works
The Commonwealth broadband team will continue to work closely with local governments to identify gaps in coverage and develop plans to fill them. Internet service providers are and will continue to be critical partners in delivering service to unserved areas. Therefore, current providers are incentivized to share their coverage areas during this process in order to avoid overbuilding.
The team will utilize and oversee relevant grant programs to support the construction of new broadband infrastructure to fill current gaps in coverage while also taking into account federal, local, and private sector activity.
Finally, the broadband team will continue to work with the Governor to refine executive branch policies and procedures and the General Assembly on issues best-addressed by legislation aimed at eliminating barriers to broadband access, reducing the cost of deploying infrastructure, and bolstering support for low-income Virginians.
C. Where we are, progress so far, and the scope of the problem
Existing maps, including some mandated by the federal government, are not reliable to assess the extent of broadband coverage and gaps in that coverage. (*4) As previously mentioned, recent federal, state, and third party data collection efforts suggest that the most conservative estimate of necessary connections remaining is 233,500, less than half of the estimated 500,000 connections needed for unserved Virginians when Governor Northam first took office.(*5)
In each locality or region, the Commonwealth broadband team will act as advisors to local governments and groups of local governments to assist them in: 1) finding a partner ISP(s) with whom they can develop a deployment plan; 2) determining the likely costs for such a universal coverage plan; and 3) establishing and identifying those assets the community or communities may have to support and implement such a plan.
D. Investing in Virginia’s broadband effort
Virginia will need to maintain increased investment in broadband access to achieve functionally universal broadband coverage by 2024. Details related to scoping and how increased funding will be deployed can be found in on page 24.
1. Maintain VATI Funding at least $50 million for each succeeding year through FY25: the VATI program is the primary vehicle by which Virginia is incentivizing the creation of new broadband infrastructure in areas where it has not been previously economically efficient for the private sector to do so. These investments are essential to keeping Virginia on track for complete coverage.
2. Efficiently and Effectively Deploy $700 million American Rescue Plan funding: the Commonwealth must ensure that the ARPA funding is deployed in coordination with the central tenants of the VATI program: cost efficiency and universality. This funding will work side-by-side with state funds to achieve universal connectivity.
3. Support and Expand Upon the Digital Equity Program Pilot: Language in the 2021 Virginia Budget instructs the Department of Social Services, in coordination with the Chief Broadband Advisor, to design a program that provides a fixed reimbursement, which shall not exceed $15 monthly, for broadband service costs for select households currently participating in the Supplemental Nutrition Assistance Program (SNAP). Developing these program guidelines can help bolster existing federally-subsidized broadband assistance through the FCC Lifeline program. Doing so will also take advantage of low-cost plans offered by some private broadband providers. Once the program is designed, the Commonwealth should appropriate sufficient funding to bridge the gap between the $9.25 per month offered federally and the cost of broadband where they reside.
E. Summary of policy recommendations
Deployment of broadband in the aggressive fashion necessary to accomplish the Governor’s goal of universal coverage by 2024 will require:
Non-legislative policy changes:
1. Request and support local broadband plans: Localities should be required to adopt a granular plan for universal broadband coverage within 10 years, in order to access state funding support.
2. Continue to refine and improve the Commonwealth’s land-use: Currently, the Department of General Services (DGS) handles requests to cite telecommunications facilities on Commonwealth-owned land. Greater transparency and consistency is required throughout this process.
3. Ensure VDOT continues to improve access to rights of way: The Virginia Department of Transportation (VDOT) should expand its “dig once" policy to include more robust conduit installation and availability.
2021 Legislative changes:
1. Utility Leverage Program: HB2304/SB1413 made permanent the pilot program under which investor-owned electric utilities may provide broadband capacity to unserved areas of the Commonwealth. The bill provides that investor-owned electric utilities may recover costs of and revenue generated from providing broadband capacity that serves as an electric grid transformation project in areas unserved by broadband, as defined in the bill. It also consolidates the State Corporation Commission (SCC) petition approval process into one hearing and streamlines the process by which an area is determined eligible. Municipal broadband authorities are allowed to participate.
2. Create the Virginia Digital Equity Pilot Program: Budget language directs the Virginia Department of Social Services (DSS), in coordination with Chief Broadband Advisor, to design a program that provides a fixed reimbursement, which shall not exceed $15 monthly, for broadband service costs for select households currently participating in the Supplemental Nutrition Assistance Program (SNAP). DSS shall report on the program design and structure, administrative cost estimates, program guidelines, and other relevant information related to implementation to the Chairs of the House Appropriations and Senate Finance and Appropriations Committees by November 1, 2021.
3. Broadband Mapping: Budget language directs the Department of Housing and Community Development (DHCD) $424,000 to create a statewide broadband availability map with service territory data submitted by Virginia broadband providers. The published map will be anonymized, showing locations served and unserved by broadband without reference to any specific provider. DHCD will also establish a process to petition map inaccuracies.
4. Municipal Authorities and VATI: Budget language creates a VATI pilot program in which public broadband authorities may apply directly for Virginia Telecommunications Initiative funds without investment from the private sector. Awards shall not exceed 10 percent of total available VATI funds in FY22. This was a recommendation of the Broadband Advisory Council.