As the COVID-19 pandemic has laid bare inequities in everything from housing to health care, the need for adequate broadband internet coverage throughout rural and underserved communities in North Carolina has become a major issue.
With students learning virtually and many adults working from home, the need for reliable, high-speed internet has become much more than just a luxury for streaming and web surfing.
“One thing the pandemic has made clear to everyone is in today’s world, (broadband) is not an optional service,” said N.C. Rep. John Szoka, R-Cumberland, who has sponsored legislation to increase broadband options.
“It’s infrastructure, and COVID has brought people who didn’t believe that around to my way of thinking.”
The expansion of broadband in this state is a complicated arithmetic of government versus private investment, federal versus local standards, infrastructure capability and end-user affordability.
But after almost a year of virtual learning, working from home and telehealth doctor visits, the need to figure out that math has become a pressing concern for many in the state legislature.
“What’s interesting is, now that the General Assembly has come back, we have heard from almost every single county asking what’s going on in their communities or what grant opportunities are available,” said Jeff Sural, director of the N.C. Broadband Infrastructure Office.
“Every single county is experiencing an issue in connectivity — even in some of the most urban or populous counties, we’re dealing with issues of affordability.”
A major component of making broadband expansion happen in North Carolina’s rural communities is partnerships between private providers and government. Earlier this month, Charter Communications — the parent company of Spectrum — announced a multiyear, multibillion-dollar plan to bring gigabit high-speed internet service to more than 1 million underserved locations across 24 states, including North Carolina.
Charter said it plans to invest about $5 billion in the buildout initiative, offset by $1.2 billion in funds from the Federal Communications Commission’s Rural Digital Opportunity Fund auction.
The commission established the $20.4 billion fund in 2019 to bring high-speed fixed broadband service to rural homes and small businesses.
“Private providers come forward and say they have low-cost plan offerings, are expanding into areas to extend their service footprint even when it doesn’t make complete business sense,” Sural said. “They’re going after grant programs to reduce the capital cost to build out. And so far, the government involvement has been more about creating incentives to entice those private internet providers to build out in those areas.”
At the state level, the Growing Rural Economies with Access to Technology grant program, also called GREAT, offers $30 million in funds for grants to help offset the cost of bringing broadband to underserved areas.
“Our state rural grant program has enabled public and private partnership,” Sural said. “It requires a match from the private provider — 68% state dollars and 32% private investment — that’s a good way for the state to lead on this issue.”
But during the latest application period, the program received $64 million in eligible project applications. Until more funds are made available, Szoka said, some jurisdictions are negotiating their own deals with internet service providers. He cited an example from his district of this practice working successfully.
“What municipalities can do is what the city of Fayetteville did — basically make yourself attractive to a medium to small-sized company to come in and do their own fiber network,” Szoka said.
“Because the city of Fayetteville is willing to talk to them, they’re coming in and putting in their own fiber, and they’re going to have some of the fastest internet in the state.”
Sural said his office has encouraged counties and municipalities to put out requests for proposals for service providers to build broadband infrastructure.
“Counties do have the option to issue grants to internet service providers,” he said. “Those are somewhat limited, so folks have talked about opening that up and having some counties go out and build infrastructure where private business isn’t willing to go, and then lease that infrastructure to private providers.”
‘These are business decisions’
Both Sural and Szoka point to the issue of infrastructure cost compared to return on investment as a roadblock for some privately owned providers to expand into rural areas.
“If there aren’t enough people to make a good return on their investment of capital costs, they’re not going to do it,” said Sural. “These are business decisions, not necessarily made on the needs of the community, and that’s where you get the rub between the private sector and government.”
And some of the areas that aren’t attractive to private providers also run into trouble in earning federal funding for infrastructure because of the use of census blocks to determine coverage. Census blocks are groupings of residences and businesses in a certain area, and in rural communities, these blocks can cover large swaths of land, connecting homes and businesses that might not actually be close by.
“The FCC said if there’s any residence or business in a census block with high-speed internet connection, they consider the whole census block served,” Szoka said.
“So, you might have one house in the census block that might be huge, and that whole block gets blocked out for further investment. And since it’s been served by private companies, it’s not eligible for us to come in and offer grants because it’s seen as competition for government and private companies.”
And infrastructure isn’t the only hurdle keeping some North Carolinians from connecting to broadband service. For those in rural areas with only one provider looking to recoup its investment in infrastructure or even low-income areas of cities with fewer internet options, the cost of connecting is often prohibitive.
“There are market forces to create a competitive environment, but if you only have one choice, there’s not much you can do about it,” Sural said.
“In those situations, we’d like to see either subsidies that are available for those folks or a tax credit.”
Szoka said not only opening up access but also creating a marketplace where consumers have a choice and competitive rates is a priority for him going forward this year.
“This session, I’m focusing more on the counties where the GREAT grant program has not yet been applied for and looking for other ideas of how we can loosen up the structure to allow competition from smaller entities,” Szoka said.
“There are a lot of small companies that have unique ways of getting services out there. I’m in the process now of looking at what law prevents X-Y-Z company from coming in to set up their broadband service.”
While COVID has brought many challenges to providing broadband access in North Carolina, Sural said, the pandemic also has made it clear to most that this issue can no longer sit on the back burner.
“Now we’ve seen the conversation change to ‘this is more necessary than we thought,’” he said.
“This isn’t a luxury in addition to your telephone line or cable — it’s all those things, it’s the modern means of communication. And COVID certainly has brought to bear the fact that not only is it necessary, but it also needs to be affordable, and we need to find a way to help those who can’t pay for it.”