The infrastructure bill passed in November 2021 is a $1 trillion commitment to varying sectors, including transportation, utilities, and broadband.
It presents an excellent, low barrier opportunity for carriers looking to enter the infrastructure industry and broadband sector.
Housed within the infrastructure bill is the broadband benefits program, officially known as the Emergency Broadband Benefit Program (EBBP).
If you’re an MSP or telecom service provider interested in subsidy opportunities that the infrastructure bill presents, then keep reading!
What is the infrastructure bill?
Officially called the Bipartisan Infrastructure Bill, it is a commitment to invest in and improve a variety of sectors.
This includes (but is not limited to):
- Upgrades in power infrastructure and the network of electric vehicle charges
- Increased access to reliable high-speed internet
- Investments in roads, bridges, public transit, passenger rail, and airports
- Improvements in clean drinking water by eliminating lead pipies
- Support for +700,000 new American jobs
For those in the MSP and telecom industry, it’s worth noting that of the $1 trillion being committed to the infrastructure bill, $65 billion is going towards broadband benefits program.
The following section delves into the opportunity this presents for MSPs and telecom service providers.
Industry opportunities for MSPs and telecom providers
The federal government recognizes that telecommunications is evolving rapidly.
The COVID-19 pandemic also further revealed the digital divide between Americans with inadequate access to reliable internet and computers and those living in wealthy, urban communities.
To combat this divide and help underfunded groups, the federal government is investing in broadband and telecom infrastructure and consumer subsidies.
The government is looking to financially incentivize MSPs and telecom providers to lower internet prices, so there is a lot of opportunity for subsidies and funds.
Major Network Operators continue to promote competition creating new carriers and resellers.
Most of the major carriers and network operators are looking for resellers and other carriers to spread broadband and build infrastructure.
This is similar to when the major carriers started the Lifeline Market. It was looked at as an opportunity to increase their customer base with minimal effort. The heavy lifting was performed by resellers who competed against each other.
The infrastructure bill presents another opportunity for competition.
Telecommunication funding opportunities within the infrastructure bill
The Infrastructure Bill has allocated $65 billion towards 4 grants related to the telecommunications industry.
These areas are:
- Broadband Equity, Access, and Deployment Program(funding amount $42.5 billion)
- Middle Mile Grant Program (funding amount $1 billion)
- Digital Equity Act of 2021 (funding amount $2.75 billion)
- Affordability Connectivity Fund (funding amount $14.2 billion)
Let’s break down these categories even further:
Broadband Equity, Access, and Deployment Program – $42.5 billion
This program provides ~$100 million grant to each state to help expand broadband in underserved areas.
How it works: The state applies for money from the federal government, the Fed will send money to the state, and then the carrier has to apply to the state.
Why it’s being done this way: They want the States to manage where the broadband infrastructure is going to be put in place.
Note: States can award sub-grants for specific areas such as “Community Anchor Institutions” and reduced costs to eligible households
Middle Mile Broadband Grant Program – $1 billing
The goal of this program is to establish and expand networks to help reduce the cost and connectivity barriers that come with providing broadband access to underserved areas.
The federal government is looking for carriers to help other carriers get connected to networks.
Who is eligible for this grant: Telecommunications carriers, electric utilities, and utility co-ops
Digital Equity Act Programs – $2.75 Billion
Funds from this grant program are being allocated to provide infrastructure to areas or businesses that generally don’t have access.
According to the National Telecommunications and Information Administration, these programs have been established to,
“promote digital inclusion and equity to ensure that all individuals and communities have the skills, technology, and capacity needed to reap the full benefits of our digital economy”.
This extends to low-income households, nursing homes and aging populations, libraries, incarcerated individuals, veterans, individuals with disabilities, individuals with a language barrier, racial and ethnic minorities, and rural inhabitants.
Who can receive these grants: public and non-profit institutions
Affordable Connectivity Program (ACP) – $14 Billion
This fund has the easiest entry for MSPs and telecom service providers.
This works similarly to the Lifeline Program for voice.
The broadband affordability fund offers services and subsidies to provide broadband connectivity to low-income, underserved areas.
This fund is being administered by USAC, similar to the old Lifeline Program for voice.
The next section dives further into the ACP.
Unpacking the broadband benefits program
The first and easiest requirement to qualify for this fund is to have been a carrier providing service.
Essentially the new Affordable Connectivity Program (ACP) is an extension and reshaping of the Emergency Broadband Benefit Program (EBBP) which provided a discount for low income households and qualifying individuals struggling to stay connected to the internet.
The extension from EBBP to ACP won’t bring too many major changes to benefits though.
For example, there’s still a $30 per month subsidy for qualified households (done through NLAD).
Although the new ACP subsidy is $20 less than the EBBP subsidy, it allows for broader eligibility requirements. Which means more individuals below the poverty line can connect to broadband.
It’s worth noting that as a provider, there will be certain requirements on what to provide to consumers such as how much service to provide, how much data upload/download speeds and data loads providers are able to give customers.
Providers will also have to change some of the ways business is done with clients.
If you’re already providing broadband, there are going to be more requirements on advertising and how service is provided to a client.
The goal is to incentivize carriers and reduce their refusal to do business in lower-income areas so everyone can have access to affordable broadband.
More on the Emergency Broadband Benefit Program converting to the Affordable Connectivity Program
The original program ended December 31, 2021 and carriers who are already participating in the original EBB program have 60 days to transition (March 1, 2022).
An additional $14.2 billion has been added to the transition of the EBBP to the ACP.
The Affordable Connectivity Program includes:
- The benefit provides a discount of up to $30/month toward internet service for eligible households and up to $75/month for households on qualifying Tribal lands
- Eligible households can also receive a one-time discount of up to $100 to purchase a laptop, desktop computer, or tablet from participating providers if they contribute +$10 and <$50 toward the purchase price
- The ACP is limited to one monthly service discount and one device discount per household
For existing Lifeline providers, it’s a great opportunity because they can convert clients getting traditional wireless to Lifeline Wireless and the EBB program and consumers would get two subsidies at that point.
What to consider if you want to apply for these grants or funds
(1) The grant process can be time consuming
Be prepared to immerse yourself in the grant process if you’re looking to qualify for the first three grants (the broadband Equity, Access, and Deployment Program, Middle Mile Grant Program, Digital Equity Act of 2021, and Affordability Connectivity Fund).
This includes grant writing, application, and grant management.
(2) You’ll need to be vigilant about compliance
Another thing to consider is how to manage the compliance reporting
With most programs that involve money being received from the federal government, there’s often a lot of compliance to prove that you’re actually doing what you said you would do with the grant.
(3) Be prepared to potentially be audited
The third thing to consider is audits
The original Lifeline Program saw a lot of waste fraud, and abuse.
To counter this and ensure compliance, be prepared for the federal government to perform audits at least once a year
(4) Consider using NLAD
Lastly, use NLAD to claim reimbursements for Lifeline eligible customers
NLAD stands for the National Lifeline Accountability Database and confirms whether a consumer has qualified for the Lifeline program.
Service providers must enter their customers’ details into NLAD to receive reimbursements.
Consider reaching out to a tax and consulting firm who can help with the grant application process and ensure compliance so you stay in these programs.
Minimum requirements for a typical voice over IP resellers to qualify for funds
There are two paths to becoming a recipient of these funds and becoming an authorized provider, aka an ETC (eligible telecommunications carrier).
(1) Streamlined application
If you meet the following requirements you get to do a streamlined application at the Fed, which is a 30-day process:
- Already participating in a Lifeline program in a state that has a voice Lifeline service
- And you have an ETC already in the state
So you provide your application, along with a current ETC, and you automatically get to become an ETC at the Fed and start to sign up consumers for the Broadband Lifeline program,
(2) Non-streamlined application
This applies for voice over IP resellers who do not have, in any state, designation today, then you cannot go streamline.
Instead, you have to go to the Fed and apply for an ETC at the federal level, which requires a compliance plan which involves quite a bit of work and can get very complicated.
Who’s eligible for the Affordable Connectivity Program (ACP)?
A household is eligible if a member of the household meets at least one of the criteria:
- Has an income that is at or below 200% of the federal poverty guidelines; or
- Participates in certain assistance programs, such as SNAP, Medicaid, Federal Public Housing Assistance, SSI, WIC, or Lifeline;
- Participates in Tribal specific programs, such as Bureau of Indian Affairs General Assistance, Tribal TANF, or Food Distribution Program on Indian Reservations;
- Is approved to receive benefits under the free and reduced-price school lunch program or the school breakfast program, including through the USDA Community Eligibility Provision in the 2019-2020, 2020-2021, or 2021-2022 school year;
- Received a Federal Pell Grant during the current award year; or
- Meets the eligibility criteria for a participating provider’s existing low-income program.
*Provided by CLA
It’s becoming easier to qualify for opportunities like the broadband benefits program
The federal government has actually made it easier for a participating carrier to receive these funds rather than harder.
In this particular instance, consumers have a more streamlined process to go and get certificated reimbursements and they are actively seeking out carriers.
Telecom tax experts Matt LaHood and Joe Solana of CLA have observed that carriers in the EBBP program are beginning to add voice and other services because consumers are approaching them, demanding that they provide additional support or a grant that they’ve already received from the government.
Matt and Joe previously worked with a client in the telecommunications industry that was a service provider to MSPs providing sim-based tablets and data plans.
Their client was able to create a whole business model around this program and even became their own recipient of funds.
Their business has skyrocketed since because they leveraged their unique relationship to their marketspace and took advantage of the fund.
The new Infrastructure Bill is an excellent opportunity to take advantage of opportunities like the broadband benefits program that can benefit both service providers and their customers.
Consider a professional consulting firm that can guide you through the grant application process, prepare and manage ETC license process (Customer Subsidy), manage required compliance and reporting, manage audits for compliance/waste fraud and abuse, and aid with NLAD support.
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The information provided by Datagate is for general informational and educational purposes only and is not a substitute for professional advice. Accordingly, before taking any actions based upon such information, we encourage you to consult with the appropriate professionals.