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Published in Economic Development
Hundreds of millions of dollars in state and federal funding to build out broadband infrastructure is expected to have a major effect on improving rural access in Michigan. Hundreds of millions of dollars in state and federal funding to build out broadband infrastructure is expected to have a major effect on improving rural access in Michigan.

State prepares for hundreds of millions in broadband infrastructure funding

BY Sunday, April 10, 2022 06:38pm

The $250 million that state officials plan to deploy through competitive grants to extend high-speed internet service represents the biggest push yet to address the digital divide in Michigan.

An even larger initiative is expected when Michigan receives additional federal funding under the $1.2 trillion Infrastructure Investment and Jobs act that President Joe Biden signed into law last November.

Connected Nation Michigan, an organization that advocates for greater broadband access, estimates Michigan next year will get $1.3 billion to $1.5 billion through the infrastructure law to extend high-speed internet service.

The federal infrastructure funding and the $250 million included in a $4.8 billion state infrastructure deal recently reached between state lawmakers and Gov. Gretchen Whitmer should create a considerable bridge to address the digital divide in the state, said Connected Nation Michigan Executive Director Eric Frederick.

The $250 million in the state spending package is more than 10 times the amount of previous allocations to expand broadband infrastructure, Frederick noted.

The state grant program, combined with the broader federal infrastructure funding, should “finally close our availability and digital divide in the state,” he said.

“It’s definitely going to make a huge impact,” Frederick said. “I believe there’s enough resources coming from the (federal ) infrastructure act to truly close our availability gap and connect every household in the state, if it’s done smartly and done efficiently. This funding that was passed (by the state Legislature) is the first stepping stone to getting that done.”

The bipartisan state infrastructure plan that Whitmer signed on March 30 directs the Michigan Department of Labor and Economic Opportunity to create a competitive grant program for public-private sector projects across the state that would extend high-speed internet service to underserved areas lacking access to 100 megabits per second download speeds.

The $250 million comes from the American Rescue Plan Act enacted last year. The first step is for the state Department of Labor and Economic Opportunity to apply to the U.S. Department of the Treasury for the funding by a fall deadline, Frederick said.

High demand

Once the state receives the money in the fall or winter, the state Department of Labor and Economic Opportunity can begin providing grants to projects that aim to extend broadband in local markets presently lacking access.

Frederick expects the state to see high demand for the broadband grants. Connected Nation Michigan estimates that 300,000 to 400,000 households across the state lack basic access to high-speed internet service.

Connected Nation Michigan estimates the $250 million state initiative should help to extend service to 50,000 to 60,000 households, Frederick said. Roughly one-third or more of Michigan’s 83 counties have some form of ongoing broadband initiative, he said.

“I’m expecting there to be a lot of interest in this program,” Frederick said. “This program will definitely receive more applications than it has funding for currently.”

The funding would enable internet service providers working with a public partner to build out broadband infrastructure in rural markets that lack the population density to justify the expense. The grant funding “will offset those market dynamics to make sure they can build out into the areas that are currently unserved,” Frederick said.

The state funding also supports and staffs the Michigan High-Speed Internet Office created last year through executive order that can coordinate local initiatives across the state and avoid redundant efforts.

The state grant program could benefit projects such as an ongoing broadband initiative in Ottawa County to extend service, although the state’s intent to direct funding to unserved areas may mean other markets get preference, said Paul Sachs, director of the Ottawa County’s Department of Strategic Impact.

“$250 million may not necessarily go far to address Michigan’s statewide broadband issues. Accordingly, the competition for these dollars will be fierce, and Ottawa, while it has known inequitable gaps in access among our residents, is not in as desperate a position as other more rural counties,” Sachs wrote in an email to MiBiz. “The key to accessing these dollars for Ottawa County is all dependent on the manner by which the state creates its grant eligibility and distribution criteria.”

Identifying gaps

Preliminary results from an Ottawa County survey of residents found that more than a quarter of households lack access to broadband speeds of 25 megabits per second downloading and 3 megabits per second uploading, which is the Federal Communications Commission’s minimum speed for broadband. More than eight out of 10 Ottawa County households lack access to 100 megabits per second download speeds, Sachs said.

To prepare for the new broadband funding, the Michigan Strategic Fund in February contracted with Connected Nation Michigan to lead a broadband infrastructure audit and validation project that over six months will identify and map existing infrastructure and service gaps along 65,000 miles of public right-of-way.

“You can’t solve a problem if you don’t know what the problem is. We need to be able to identify where there are opportunities for the commercial providers, where we’re going to have to ask them to step up and come together to make sure that there is greater reliability,” said Michigan Economic Development Corp. President and CEO Quentin Messer Jr. “But sometimes, they don’t know themselves. So this helps everyone become more informed on where are those gaps, where are those holes in coverage, where are we making it more challenging for there to be telehealth and virtual learning opportunities, for there to be remote work opportunities. If you don’t have reliable internet, all of that comes off the table.”

The mapping project should “result in a much more accurate picture of who’s connected and who’s not, which will then help support the planning for all of the Infrastructure Act funds that are coming, as well as the new program that was created by the Legislature,” Frederick said.

MiBiz Editor Joe Boomgaard contributed to this story.

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