First things first. We want to take a moment to celebrate and congratulate NDIA’s community – increasing digital literacy is recognized as such an important and essential component in closing the digital divide that it made its way into a major federal funding program, the American Rescue Plan’s Act of 2021. Hurray!
We all have questions about the Interim Final Rule the U.S. Department of Treasury released yesterday but here is a breakdown of what the funds are and our interpretation of them.
$350 billion is allocated in the American Rescue Plan Act of 2021 (ARPA) to state, local, territorial, and Tribal governments for the purpose of ‘laying the foundation for a strong and equitable recovery.’ Within ARPA, three funds may be used to support digital inclusion or broadband deployment activities: Sec. 602, the Coronavirus State Fiscal Recovery Fund, Sec. 603, the Coronavirus Local Fiscal Recovery Fund and Sec. 604, The Coronavirus Capital Projects Fund (CCPF). 602 and 603 are usually discussed together and guidance is provided in an Interim Final Rule. Guidance for Sec. 604 is forthcoming and expected to be similar to the 602 and 603 guidance.
On page 33 of the Sec 602 and 603 Interim Final Rule, “Assistance to Households’ is defined as the following:
“Assistance to households or populations facing negative economic impacts due to COVID-19 is also an eligible use. This includes: food assistance; rent, mortgage, or utility assistance; counseling and legal aid to prevent eviction or homelessness; cash assistance (discussed below); emergency assistance for burials, home repairs, weatherization, or other needs; internet access or digital literacy assistance; or job training to address negative economic or public health impacts experienced due to a worker’s occupation or level of training. As discussed above, in considering whether a potential use is eligible under this category, a recipient must consider whether, and the extent to which, the household has experienced a negative economic impact from the pandemic.”
The Interim Final Rule notes that for the ‘Assistance to households’ category, when applicants are “considering whether a potential use is eligible under this category, a recipient must consider whether, and the extent to which, the household has experienced a negative economic impact from the pandemic.” But the Interim Final Review goes on to say, “In assessing whether a household or population experienced economic harm as a result of the pandemic, a recipient may presume that a household or population that experienced unemployment or increased food or housing insecurity or is low- or moderate-income experienced negative economic impacts resulting from the pandemic.”
We interpret “internet access or digital literacy assistance” to include:
- Covering the cost of a household’s broadband service, including through bulk purchases
- Outreach for low-cost and subsidized broadband service
- Digital literacy training
- Digital navigation
- Purchasing devices for households
- Broadband infrastructure
Eligible use of the funds for investment in broadband infrastructure is outlined in much more detail (and spans pages 69-77) than the affordability and digital literacy section. However, in summary, the Interim Final Rule encourages funds to be invested to support projects that provide speeds of 100Mbps download and upload, defines unserved and underserved as areas that ‘lack access to a wireline connection capable of reliably delivering at least minimum speeds of 25 Mbps download and 3 Mbps upload, encourages recipients to consider ways to integrate affordability options into the program design, and to prioritize investments in ‘networks owned, operated by, or affiliated with local governments, non-profits, and co-operatives–providers with less pressure to turn profits and with a commitment to serving entire communities.’ The lack of 25/3 mbps limits usage of the fund for broadband infrastructure. Gap networks (built to address affordability in low income neighborhoods) are likely not eligible for the capital expense but the service itself would be eligible under “Assistance to Households”.
Given that the digital divide impacts every community, we encourage each locality to apply a portion of the funds to ‘internet access’ or ‘digital literacy assistance’. We recommend the following:
- If you’re a local community based organization, we recommend you contact your state or local officials to discuss how these funds could help close your community’s digital divide.
- If you’re a local or state government we recommend you identify the programs and organizations addressing internet access and digital literacy assistance, and leverage the funds to enhance and expand their work.
- If you work for or live in a community without any digital inclusion programs, reviewing and leveraging information from NDIA’s Digital Inclusion Startup Manual is a great place to start.
Sec. 604. The Coronavirus Capital Projects Fund (CCPF) is a separate, $10 billion fund which “allows for investment in high-quality broadband as well as other connectivity infrastructure, devices, and equipment.” The Treasury Department will begin to accept applications for review in the summer of 2021 and will issue guidance soon. Eligible applicants are required to submit a plan describing how they intend to use the funds and how they will be consistent with the Treasury guidance.
State, local, territorial, and Tribal governments do not have to submit plans for how they intend to use the funds for Sec. 602 or Sec. 603. They can now request the funding allocated to them based on the funding formulas from the Treasury. As the funds were intentionally structured to be flexible in use, we anticipate each local and state government to apply their funds differently to meet their community’s needs.
For more information on the Treasury funds and guidance, the Treasury Department posted a suite of documents providing guidance to state, local, territorial, and Tribal governments in determining eligible uses of the funds including how they will be allocated:
We will continue to update the NDIA community with additional information and recommendations in the coming weeks.