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State announces current round of internet expansion grants; big carriers get little to nothing

Frontier, Charter and TDS had asked for tens of millions in funding.

BY PETER CAMERON, The Badger Project

Local telecommunications companies, utilities and cooperatives were the big winners in the most recent, $100 million grant round of public funding for the expansion in Wisconsin of high-speed internet, also known as broadband.

National and statewide companies like Frontier, Charter, TDS and AT&T mostly saw their requests denied.

The state announced the grant recipients on Friday.

Some of the biggest winners were in the Driftless Area, where the rolling hills and forests can make wireless internet spotty. 24-7 Telcom, a telecommunications company, and Pierce Pepin Cooperative Services, an electric distribution cooperative, are both moving aggressively to partner with smaller municipalities to bury fiber-optic cable for high-speed internet in northwestern Wisconsin.

24-7 Telcom applied for more than $13 million and got about $10.5 million. Pierce Pepin received approval for all $6.7 million of its requests.

The Reedsburg Utility Commission, perhaps the only publicly-run internet provider in the state, applied for about $12 million and got more than $9 million to continue expanding its existing network.

Burying fiber-optic cable in the ground is one of the fastest and most consistent ways to deliver internet, because weather, topography and trees don’t interfere, experts say, but it’s also expensive to build the infrastructure. The return on that investment is lower in sparsely-populated rural areas with fewer customers, which has led big, publicly-traded companies to focus on more populous, and thus more profitable, urban areas.

State Sen. Jeff Smith, a Democrat from Eau Claire

The list of winners shows that Wisconsin “is serious about making sure rural areas have very high-quality internet service,” said Christopher Mitchell, director of the Community Broadband Networks Initiative, a Minnesota-based think tank that aids communities’ telecommunications efforts.

“These public dollars are going to local service providers that are committed to their communities rather than the biggest national monopolies that offer an efficiency mirage,” Mitchell said. “Big monopolies like AT&T and Frontier have received billions in public dollars over the years while delivering very little to rural residents and businesses. Now we will see what local companies, cooperatives, and local governments can do to provide better services with some help from the taxpayers.”

Frontier and TDS applied for about $35 million and $29 million, respectively, but got nothing in this round of grant funding.

Charter Communications, also known as Spectrum, applied for more than $39 million in grants. It got about $3.9 million for projects in the counties of Kenosha, Racine and Walworth and in the town of Janesville.

AT&T asked for $3.5 million, but was blanked.

From 2015 to 2020, Frontier and TDS received about $180 million and $80 million, respectively, from the federal programs for broadband expansion in Wisconsin. AT&T received more than $45 million in federal funds for projects in the state in that same time frame.

Experts say those federal programs were poorly targeted and poorly enforced. That led to big internet service providers doing things like putting the huge sums of federal cash into more profitable urban places. Rural areas were generally ignored, experts say.

This time, the federal funds were distributed by the state.

After Wisconsin got more than $2.5 billion in federal stimulus funding from the American Recovery Plan Act, passed by Democrats in March, Gov. Tony Evers set aside $100 million for what he called a “first round” of broadband expansion grants.

The Wisconsin Public Service Commission evaluates and distributes the grants. The PSC does the same for broadband expansion grants with money from the state budget.

State Sen. Jeff Smith, a Democrat from the Eau Claire area who has advocated for government to be more active in expanding high-speed internet in rural areas, said giving public funds to smaller providers was a “good approach.”

State Sen. Howard Marklein, a Republican from Spring Green

“If we are using taxpayer money for broadband expansion, it must continue going to these areas that are considered ‘not profitable’ by internet service providers,” he said in an email. “Hopefully, with Governor Evers’ leadership, we will continue seeing grants going to the areas that need it the most.”

State Sen. Howard Marklein, a Republican from Spring Green who has taken a more pro-business approach to rural broadband expansion, said the state is making progress in connecting places without coverage.

“Telecommunications companies are working hard to partner with local stakeholders to create projects that are reaching more and more people in every cycle,” he said in an email. “Combine Wisconsin’s grant programs with all of the federal investments statewide and we are connecting new homes, businesses and organizations every day.”

The PSC awards funding based on several criteria, including whether a project is in an area unserved or underserved by internet providers, scalability, impact, matching funds, applicant capacity and performance, service affordability, economic development and public-private partnership, PSC spokesman Jerel Ballard said.

Evers called the $100 million in federal funds he set aside in July a “first round” of broadband expansion, but has not yet announced additional rounds.

The PSC also has another $129 million in state funds budgeted for broadband expansion for the next two years. It has not yet announced when it will start accepting grant applications for the next round.

The Badger Project is a nonpartisan, citizen-supported journalism nonprofit in Wisconsin.

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