Ohio House budget has $190 million for rural ISP subsidies, but $0 to help fix cities’ broadband gaps

Last Wednesday the Ohio House of Representatives passed its version of the state’s 2022-2023 biennial operating budget, House Bill 110. It contains a clear message for urban communities of all sizes that hope for state help to reduce the barriers to home broadband faced by many of their citizens:

No help here. Go away.

The $74 billion in state spending authorized by the House includes $190 million for a proposed “Residential Broadband Expansion Grant Program” (RBEGP), which will subsidize internet service providers — but not municipal networks or nonprofits — to extend faster broadband infrastructure to areas where no provider now offers residential connections with speeds of at least 25 Mbps down and 3 Mbps up. That’s a 375% increase in funding for this proposed initiative, compared to last year’s House Bill 13 and this year’s House Bill 2.

None of these bills use the word “rural” to describe the RBEGP, but that’s what it is — Ohio’s long-awaited rural broadband investment program. Its basic eligibility threshold (no 25/3 Mbps service) prohibits investment in any area that already has mainstream cable modem service, which excludes pretty much all of the state’s urban neighborhoods, including smaller municipalities in non-metropolitan counties.

To casual observers, including the media, this may look like a good-faith effort to close the state’s digital divide. It isn’t. Here’s why:

1. As House leaders know, Ohio’s broadband gap isn’t just rural and it isn’t just an infrastructure problem. 

A year and a half ago, before COVID-19 lockdowns revealed the true extent of our digital divide, legislators and the media could still believe that Ohioans without home broadband all live in isolated rural townships and very small towns, where modern infrastructure hasn’t reached them because providers can’t justify the deployment costs.

In 2021, everyone knows better.

The pandemic forced political leaders at all levels to confront the reality that most Ohio households without broadband connections live in urban, not rural, areas; that hundreds of thousands of those households are in the state’s metropolitan central cities, where high speed broadband from at least one, if not two or three, providers is universally “available” for those who can afford it; and that lower-income households (rural as well as urban) are far less likely to be connected than their better-off neighbors. Community leaders quickly deduced that overcoming the broadband gap would require dealing not just with broadband’s availability, but also with its affordability — especially for low-income consumers.

House Members, especially the Republican leadership, know all this but have chosen to ignore it. While more than quadrupling House Bill 2’s proposed investment in rural construction subsidies (mostly for the same ISPs who are already pricing hundreds of thousand of Ohio consumers out of the market), HB 110 completely ignores the desperate need for affordable network alternatives and community  digital inclusion programs in the state’s cities, large and small.

2. The Governor’s budget asked for $50 million for BroadbandOhio to promote affordable urban and rural Internet options — and the House zeroed it out.

Governor DeWine’s February budget proposal to the General Assembly included $50 million “to help companies provide low cost internet by paying infrastructure costs, leveraging state assets, and matching funds to draw down federal dollars to make broadband more affordable in both urban and rural areas.” 

Presumably our Republican governor intended to support more modest, collaborative projects like those BroadbandOhio recently assisted in Logan County and East Cleveland.

But when HB 110 passed the House last week, that $50 million had been removed.

3. House leaders have shown no interest in promoting affordable or competitive Internet options for rural residents, either.

A recent CYC analysis of Census and FCC data shows that even in the most “unserved rural” areas of Ohio, households with incomes below $35,000 are much less likely to have wireline broadband service (cable, DSL or fiber) than households with incomes of $50,000 or more.

Will $190 million for the RBEGP do anything to create more affordable broadband options — at any speed — for those less prosperous rural households? No, because it’s not designed to.

During two years in the General Assembly’s sausage factory, the language of HB 2 — now incorporated word-for-word into HB 110, the budget bill — has been carefully crafted to protect incumbent ISPs and deter competition. Governmental entities including publicly-operated networks are excluded from receiving support. Incumbent providers can challenge and block proposals from potential competitors if the incumbents offer 10/1 Mbps service or plan to offer it in the future. Only providers themselves can initiate proposals… not cities or counties, not community organizations.

Together with the strict definition of an eligible “unserved area”, these anti-competitive provisions guarantee that most dollars granted by the new program will go for marginal infrastructure extensions and improvements by existing cable and DSL providers. For places these companies still just don’t want to go, SpaceX is waiting in the wings.

How many unconnected lower-income rural households will be able to pay for a newly available connection from Spectrum at $75/mo, or AT&T at $70/mo, or Windstream at $85/mo, or SpaceX at $100/mo?  How many will simply stay unconnected, like their urban counterparts?

Luckily, the passage of HB 110 by the House isn’t the last word on Ohio’s broadband policy. The Senate is now holding initial hearings on the Governor’s proposed biennial budget, and has until June to work out its own version. And beyond the state operating budget, DeWine will oversee a significant amount of American Rescue Act funding that can be used, in part, to support additional broadband investments.

So despite the unfortunate message sent by the Ohio House last week, this isn’t over. Both rural and urban communities can still hope for a genuine state commitment to help us address all aspects of Ohio’s broadband gap — exorbitant noncompetitive prices, digital illiteracy, the need for community digital inclusion resources, as well as the real gaps in broadband infrastructure.

What the House vote does tell us, loud and clear, is that such a commitment won’t happen by itself. It will happen only if community leaders and citizens across Ohio start telling our legislators, not to mention our Governor, that we need and expect it.

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