The effects of the longest government shutdown in U.S. history are starting to be felt by an FCC program set up to support low-income Americans living in rural areas.
The FCC’s (CAF) was established to bring broadband internet access to some of the country’s most rural areas. Internet service providers were awarded millions of dollars in subsidies during an auction as part of the program. These ISPs, which often serve smaller markets, are saying that the government shutdown has halted the FCC’s ability to distribute these funds. The FCC has been effectively closed because of the shutdown.
“Unfortunately, since the shutdown, we’re at a standstill when it comes to funding for the project so that definitely does affect us there,” said United Electric Cooperative COO David Girvan in a phone call with Mashable.
Last year, the FCC awarded about $1.5 billion dollars in subsidies to internet service providers around the country in order to expand broadband access to people living and working in rural areas. The winning bidders in the will bring broadband to 713,176 new locations that are currently lacking the necessary infrastructure.
United will receive $20 million over a period of 10 years to bring high-speed broadband into parts of northwest Missouri.
“Before the shutdown, we’d been on calls with some government bodies,” said Girvan. “We would have thought we’d have been in line right now to receive our award but, obviously, that’s not going to happen and might not happen for a little bit longer now.”
Due to the company’s previous participation in other federal stimulus programs, Girvan explained that United may be in a unique position as the company was further along in the process than most ISPs. Each winning ISP has to take part in a multi-step approval process before finally receiving the funds.
However, other providers that took part in the CAF II auction also shared concerns about the delay in the process due to the shutdown.
“I’ve got to imagine we might be waiting a bit longer for the final approval from the FCC,” Wisper ISP CEO Nathan Stook told Mashable. His company was awarded more than $220 million over 10 years to provide broadband services to rural locations in a half dozen states.
“We have 80,000 locations across six states with the majority of them in Missouri, then Southern Illinois and a little bit in Indiana, Arkansas, Oklahoma, and Kansas,” said Stook. “These are people who have never really had broadband before, broadband as maybe you and I would know it coming from a more suburban or urban area. In many cases they didn’t even have that as an option.”
“We were expecting funding towards the end of March, maybe end of April” Stook said. “With the shutdown going for as long as it has, it maybe pushing that back further. With all these other things they’ll have to catch up on, it’s hard to predict from our side.”
The biggest winner of the CAF II auction, NextLink, was awarded $281 million over 10 years to bring broadband service to rural parts of Texas, Nebraska, Oklahoma, Kansas, Illinois and Iowa. When reached by email, a spokesperson also confirmed the effects of the government shutdown on CAF fund distribution. “It’s true. Funding can’t receive final approvals and be initiated if FCC is closed,” the statement said.
The FCC first created the back in 2011. The FCC 35 percent of Americans lacked broadband access and established the CAF in order to close the digital gap between rural America and the rest of the country. As a requirement of the CAF, ISPs must provide these locations with internet speeds of at least 25 Mbps downstream. In some locations, the minimum speed is even higher at 100 Mbps.
The U.S. federal government has now been partially shut down for over a month with no end in sight. The deadlock over the government’s spending budget has been caused by President Trump’s insistence that $5.7 billion be set aside for his border wall. It is now the longest government shutdown in U.S. history. Many of the areas that will benefit from the CAF funds voted for Trump in the 2016 presidential election.
It’s important to note how the shutdown’s sprawling effects can reach those miles away from Washington DC. However, with hundreds of thousands of federal employees working without pay, it’s also crucial to put the issue into perspective.
“The program is really important,” said Jonathan Chambers of Conexon, the organization which administers the Rural Electronic Cooperative Consortium, a group of rural ISPs that bid in the CAF auction collectively. “But, it’s not at all like a federal employee missing a check, it isn’t that kind of impact.”
Chambers points out that the ISPs will still eventually receive approvals for the funds, albeit delayed, and be awarded the full monetary amounts over the next decade. He also notes that the ISPs he works with are not planning to delay expanding broadband networks into rural areas due to the shutdown.
“I’m not downplaying the importance of the funds for providers, but nobody I work with has altered any of their activities due to the delay” says Chambers. “There might be a higher cost in using other funds, say, borrowing money or using a line of credit, but it’s not like the poor government workers who are living without a check week to week.”
“Even though we won $20 million in an auction, it’s a far greater cost to build and it’s never going to be a slam dunk so it does hurt us, you know, there’s no doubt about it,” said United’s Girvan, whose company bid as part of the Consortium.
“People are knocking on our door for service every day, so we’re going to keep on installing until, basically, we get the money.”