Louisiana is in the first phase of a grant program to extend broadband internet service to rural communities across the state, but established companies in the industry have moved to limit competition in these underserved areas. . Going forward, it looks like some big telecom companies are backing out of this fight – and will be less likely to do so in the future.
The number of broadband expansion grants under protest fell from 26 to 16 after several telecommunications companies withdrew their challenges, according to the Louisiana Office of Broadband Development and Connectivity. Housed under the Administration Division, the office awarded 67 Granting Unserved Municipalities Broadband Opportunities (GUMBO) grants for rural broadband expansion in the first round of awards on July 25, totaling $130 million dollars funded by President Joe Biden’s American Rescue Plan Act.
Many grants went to smaller internet service providers (ISPs) and telecommunications startups, many of which are Louisiana-based companies, but almost immediately after the initial grant award announcement on July 25, Competing telecommunications companies have filed formal protests with the Office of Broadband and Connectivity Development, causing the state to suspend 26 of those grants in accordance with state law and the rules of the GUMBO grant program.
Since then, however, several of the challenges have been voluntarily removed, reducing the number to 16 as of September 8, according to Veneeth Iyengar, executive director of broadband development and connectivity.
One of 16 protests still under review halted a $4 million grant for a project in East Carroll Parish in rural northeast Louisiana. The protest made headlines last week as residents and community activists voiced their frustration with big cable companies and state laws that allow them to protest the granting of subsidies. so late in the process. Sparklight, a subsidiary of telecommunications giant Cable One, filed the protest even though the company never applied for the grant itself.
The grant was to go to Conexon Connect, a Missouri newcomer that partners with rural electric utility cooperatives to provide high-speed internet service to hard-to-reach communities. The Conexon project would bring affordable internet access to 851 locations in the Lake Providence area.
Telecom giant decides to stop broadband subsidy for northeast Louisiana
The Office of Broadband Development and Connectivity is still reviewing Sparklight’s protest, along with the 15 others, to see if they have merit. Iyengar could not say when the exam might be over. The bureau’s decision can still be appealed to the Division of Administration, after which companies can then take legal action, which could further delay projects.
Conexon executive Jonathan Chambers said his company would have completed or was close to completing the East Carroll project had Sparklight not filed the protest.
Contacted by email last week, Cable One spokeswoman Tammy Gabel said the company already serves the Lake Providence area and does not believe the area needs subsidies for broadband expansion. . Any ISP company can apply for GUMBO grants, and several have been awarded to major telecommunications companies such as AT&T and Cox Communications.
Sparklight and AT&T are the two main internet providers in East Carroll Parish, although several residents said the service from both companies was unreliable and slow to the point of making video streaming nearly impossible. Local advocacy group Delta Interfaith has spent the past two years conducting research and collecting speed test data from East Carroll customers and has found that current ISPs are charging for speeds that customers are not receiving. said organizer Nathaniel Willis.
In a sample of data Willis shared with the Illuminator, the majority of customers experienced download speeds well below 25 megabits per second, which the Office of Broadband Development and Connectivity uses as the minimum threshold for an Internet connection to be defined as broadband. That threshold will increase to 100 megabits per second next year, Iyengar said.
The GUMBO Subsidy Act has been amended to limit the protest period
Chambers said Louisiana’s broadband grant process is different from other states in that it allows protests after grants are awarded and does not have predetermined areas of grant eligibility. Many other states have maps showing counties or other areas eligible for broadband expansion, a feature Chambers said would have prevented many protests. He also pointed out that Louisiana is keeping protest materials confidential from the public.
“It’s a complete black box process,” Chambers said. “The lack of transparency is unusual.”
Iyengar said some states have pre-determined areas of eligibility while others require grant applicants to show if a certain area is in need. Regarding the protest period and the confidentiality of protest documents, Iyengar and Administration Division spokesperson Jacques Berry said the Louisiana Legislature included these parameters when it created bylaws for the GUMBO grant program.
“Believe me, ISPs are well represented in the legislature, and for them everyone got this legislation where they wanted it,” Berry said. “Our job, uniquely, is to carry out the will of the legislature.”
Lawmakers have since changed the protest statute so that the new Aug. 1 law only allows one protest period instead of two. Under the previous law, companies were allowed to protest a grant during the 60-day application period and during the seven-day period after the grants were awarded. Now, protests can only be filed for a single 30-day period after the grants are awarded, Berry said.
Protest documents are made public after a final decision is made, Berry said, adding that it’s no different than any other procurement process involving a company’s proprietary information, which is protected by the Louisiana Public Records Act. Specifically, companies often view their geo-mapping data as proprietary, Berry said.
The Office of Broadband Development and Connectivity, which has just three employees, traveled more than 3,000 miles across the state between November and January to share information about GUMBO grants with local authorities, businesses, members from the community and other interested people, Iyengar said.
“We went and spent a lot of time communicating this everywhere,” Iyengar said, adding that his office shared just about every detail of the grant process. “We contacted everyone who touched broadband in a tangential or indirect way.”
More grants to come
Most wave one projects to bring broadband service to rural areas will be completed within two years, with 11 taking less than six months and 14 requiring more than two years, according to a list provided by the Office of Broadband.
On August 31, the bureau announced the second round of awards, which included 14 projects for a total of approximately $38 million. None of the 14 grants were protested.
As of September 8, a total of 65 out of 81 or 80% of GUMBO grants are moving forward without protest. If the 81 grants go ahead, they will extend broadband connections to about 82,000 locations, of which about 90% are residential, Iyengar said, adding that the new internet services will cost less than what customers are currently paying.
“It’s really a wasted investment if we invest in all the capital expenditure for these projects and no one pays for it,” Iyengar said. “What’s the point of reliable, affordable broadband internet, which we reward, if it’s not affordable?”
The Office of Broadband Development and Connectivity plans to announce a third and final round of awards, conducted under the new protest rules, before the end of the year. Around this time next year, Louisiana will offer even more grants, about $1 billion, for broadband expansion thanks to federal funding from the bipartisan Infrastructure Investment Act, a said Iyengar.
“We think it’s appropriate for the legislature to make changes to GUMBO every year,” Berry said. “Things are going to change, we’re going to find better ways of doing things, speeds are going to change because of data usage and things like that. We expect that to continue, and we’ll continue to work with them to achieve it.”
The disputed projects as of September 1 included the parishes of Allen, Caddo, Ascension, Caldwell, DeSoto, East Carroll, East Feliciana, Franklin, Iberia, Iberville, Lafayette, Madison, Orleans, Pointe Coupee, Richland, St. Martin, Tangipahoa, Tensas, Washington and West Carroll.
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