No comments were made at a public hearing last week on the permanent changes involving a funding formula for broadband grants. The public comment period closed last Monday.
The new formula routes Arkansas Department of Commerce Broadband Office grants only to internet service providers that can cover 25% of the upfront costs of broadband extensions. The grants would cover the other 75%. Under the previous policy, the office awarded grants for full project costs.
The rule changes will ultimately have to be approved by the Arkansas Legislative Committee of the state Legislature. The ALC Executive Subcommittee in July approved an emergency rule proposed by the Commerce Department that contained the proposed changes.
Arkansas Commerce Secretary Mike Preston said in an email to Arkansas Business on Monday that the match element is required under federal law in order for states to receive money for broadband expansion from the federal infrastructure bill Congress approved last year. Arkansas is expected to receive at least $100 million for broadband from the bill.
A story about the broadband program in Monday’s Arkansas Business didn't say that the federal government requires at least a 25% match element to receive the federal funds.
“These federal funds represent the only funds we have available to do broadband; thus a match is something we must do to have a program,” Preston said.
In addition, the Broadband Development Group of Little Rock, an independent consultant, also recommended the 25% match. BDG’s plan was issued in April and discussed in legislative hearings, Preston said.
As Arkansas Business reported Monday, the new funding formula might keep Ritter Communications of Jonesboro out of some markets.
“The economics don’t work for us,” said Alan Morse, president and CEO of the privately held telecommunications provider. Since 2021, Ritter has received 14 grants worth about $67 million for connecting broadband in rural Arkansas. Connecting a remote house can cost up to $30,000, he said, picking an example. Ritter’s cost would be $7,500.