Eric Douglas Published

Governor Announces $1 Billion Broadband Plan

A technician installs broadband connectivity in a local home.

Gov. Jim Justice announced today a new $1 billion dollar broadband strategy for the state of West Virginia alongside state and federal officials including Sen. Joe Manchin, Congressman David McKinley and Congresswoman Carol Miller.

The state Broadband Office estimates this program will expand broadband availability to at least 200,000 new locations in West Virginia.

The plan combines $236 million from state broadband monies with $362 million dollars from the Federal Communications Commission. An additional $120 million of the funding comes from other state and federal sources for a total of $718 million. That money will be used to attract matching funds from private-sector and local government partners to reach $1 billion dollars.

According to FCC data, at least 30 percent of the state’s rural homes and businesses currently lack adequate broadband access, leaving West Virginia with one of the nation’s lowest broadband connectivity rates. Broadband expansion in West Virginia has been hindered by the cost of extending networks into mountainous rural areas.

“This is surely a landmark day for West Virginia,” Gov. Justice said. “We’ve been talking for years about how to fix the rural broadband problem. Now we’re finally going to do it.

According to a press release, the state has spent more than two years comprehensively mapping broadband access around the state, resulting in a detailed inventory of underserved locations that will allow pinpoint funding allocation.

The primary programs involved in the billion-dollar initiative are as follows:

(1) Rural Digital Opportunity Fund: The Federal Communications Commission’s (FCC) Rural Digital Opportunity Fund (RDOF) offers internet service providers (ISPs) funding to extend service to underserved areas. The program centers on a reverse auction in which ISPs compete for grants to connect underserved census tracts, with each tract awarded to the ISP that can connect it with the least amount of federal subsidization.

Each participating ISP must provide the FCC a letter of credit for a portion of its grant award to ensure that its work is completed. This financial requirement creates a major hurdle for smaller ISPs. In September 2020, however, Gov. Justice issued an executive order, EO 66-20, under which the state provides a financial backstop for ISPs that win RDOF awards, opening the door to vastly expanded RDOF participation in West Virginia.

West Virginia now has the highest per-capita rate of RDOF funding in the country at $202 per person, for a total of $362 million. This RDOF funding will be complemented by private investment from participating ISPs to create a minimum expected RDOF impact of $500 million. The program is expected to provide broadband availability to approximately 119,000 homes and businesses over five years.

(2) West Virginia State Broadband Initiative: The strategy’s second major component will be operated by the state Office of Broadband and Broadband Council, using American Rescue Plan Act (ARPA) and state-budget funding. ARPA’s Capital Projects Fund includes $136 million for broadband in West Virginia.

Justice also added an additional $90 million appropriation of ARPA State Fiscal Recovery funds for broadband projects, along with a $10 million appropriation of state general revenue funds for wireless broadband projects to the West Virginia Legislature’s Special Session. These sources will provide $236 million in combined funding for the state’s own competitive broadband projects initiative.

The state initiative comprises four award programs, each of which will allocate funds through a competitive application process:

(a) Line Extension Advancement and Development (LEAD): The LEAD program will award competitive grants to ISPs to expand existing fiber and cable networks. Applications will be accepted in multiple rounds from November 2021 through January 2022, with funding decisions made on a rolling basis through early 2022.

(b) GigReady Initiative: Local governments in West Virginia have been allocated more than $500 million from the ARPA Local Fiscal Recovery Fund, and many of them intend to invest that money in local broadband expansion. The GigReady Initiative will provide matching state funds for local governments that develop projects to pool their broadband investments. Applications will be submitted beginning November 2021 and funding decisions will be made on a rolling basis through early 2022.

(c) Major Broadband Project Strategies (MBPS): The MBPS program will focus on large-scale multicounty projects that require additional resources to achieve rapid implementation. Applications will be accepted and funding decisions made in multiple rounds from early 2022 through fall 2022.

(d) Wireless Internet Networks (WIN): The WIN program will use $10 million in state general revenue funds to expand and improve existing wireless internet networks. Wireless networks are a specialized solution useful in remote or sparsely populated areas that are difficult to reach with fiber optic cable. Funding decisions will be made through early 2022.

All four components of the state-based program will competitively score applications from prospective funding recipients and will award funds based on evaluations by independent national broadband experts. Evaluation criteria include matching-fund contributions, speed to market, technical feasibility, and digital equality (providing service to underserved areas and populations). Participating ISPs will be required to include a low-price service tier that is affordable for lower-income West Virginians.

LEAD program projects must be completed within 12 months of being awarded, and projects in other categories must be completed within 24 months of being awarded. All projects will be subject to continuous progress audits throughout their implementation to ensure early identification and correction of problems.

The Broadband Office projects that the first homes and businesses to be connected in the state-based program will gain broadband access by the end of 2021. The program’s matching-funds requirement is expected to generate at least $150 million in investment beyond the $236 million state contribution, for a total state-based program impact of at least $386 million.

(3) Other federal and state funding sources: Other existing funding sources, primarily federal, are expected to contribute at least $120 million to broadband development in West Virginia over the next five years. These include the Federal Communications Commission, the United States Department of Agriculture, the Appalachian Regional Commission, and the National Telecommunications and Information Administration. The state Office of Broadband and Broadband Council will coordinate with those programs to ensure that state funds are allocated efficiently and maximum broadband coverage is obtained.