Supply Chain Issues Shouldn't Alter Unserved Areas' Priority for IIJA Money: Fischer

“We have to target the IIJA money at “unserved areas first,” with underserved areas as a “second priority,” Fischer said. Congress “made very clear” in the statute that unserved areas “were the No. 1 priority” and that shouldn’t change because of supply chain issues. She’s aware many telecom companies are having those issues now, but “if you spend money elsewhere” now “it will be more difficult to get back to the unserved areas in the future.” Fischer sees fiber as generally the best option for providing broadband service but believes what will be optimal in any specific area of the U.S. will depend on local conditions.

NTIA Director-Broadband Equity, Access and Deployment Evan Feinman said he remains “very confident we’re going to get every single American the opportunity to get online” once the agency fully distributes its $48 billion pot of IIJA money, including $42.5 billion for NTIA’s BEAD program. “That said, there’s a long road between here and” when that buildout is complete, Feinman said. “I don’t want to undersell the complexity” of the coming deployments. NTIA is operating according to statute with the idea that unserved areas will get top priority for BEAD and other IIJA funds, he said. NTIA itself is “staffing up in a big way” to ensure effective distribution of the money, but it’s also advising state and territorial governments to be mindful of their own role in doling out the money. Feinman urged states to develop a broadband office with the “capacity to implement” IIJA funding and begin working with their stakeholder communities.

Fischer noted she’s a “big supporter” of improving the FCC’s broadband coverage map and sees it as an “extremely important” tool to ensure Congress can “do our job” in doing thorough oversight of IIJA spending “to make sure that we’re not seeing duplication” of existing services. Former FCC Chairman Ajit Pai, now an AEI visiting fellow who moderated the Monday event, said he’s hopeful the federal government will have the mapping update “soon.” Fischer and Sen. Catherine Cortez Masto, D-Nev., pressed the FCC and other federal agencies last month to update them on their progress in coordinating on an anticipated map update (see 2203240054). FCC Chairwoman Jessica Rosenworcel said last week she expects the FCC will have the map ready this fall (see 2203310060).

The revised FCC broadband map is “going to drive the allocation of these dollars,” but it’s “OK if that map’s not precisely perfect, provided we assume the error is effectively consistent across every state. Then it shouldn’t negatively affect the distribution of funds,” Feinman said. Entities will “take into account real-time changes on the ground” that diverge from what’s included in the “snapshot that the map reflects,” so funding won’t be distributed “purely based on what the FCC map shows.” George Mason University Mercatus Center senior research fellow Brent Skorup raised concerns that the map the FCC produces will be a “one-time static document” and that the challenge process and other work to update it “is going to be a mess.”

Policymakers will need to engage in “some nimble policymaking” on new concerns about whether entities receiving IIJA broadband money will be able to claim a tax exemption on those funds, said AEI nonresident senior fellow John Bailey. The Treasury Department is “working hard” to create some form of “safe harbor” to keep funded projects free from taxation, but absent such an exemption the IIJA funding’s impact will be muted. The problem appears to be an “unintentional” oversight as Congress drafted IIJA last year that compounded tweaks in tax law caused by the 2017 tax cut measure, he said.