Expanding broadband in Wisconsin is good...and 5 years too late

5 ½ years after turning down $23 million from the Black man in the White House that would have helped rural Wisconsin get up to (adequate Internet) speed, it looks like our fair Governor is seeing the light.

The bill would add $13 million to the broadband expansion grant program that the [Public Service Commission] manages. That program currently has a $1.5 million annual spending limit each fiscal year, but the bill would eliminate that limit to move up the spending for projects.

It also would add $22.5 million to the Technology for Educational Achievement program, whose beneficiaries include eligible educational institutions and libraries that can then use the funds to improve their infrastructure and train teachers on technology.

The Wisconsin Technology Council hailed the proposal, saying broadband is "essential to the economic and cultural health of rural Wisconsin."

Tom Still, the group's president, noted connecting communities to reliable broadband "can help stem the loss of rural population and jobs." Among the benefits, he said, is helping small businesses increase their e-commerce offerings, increasing access to telemedicine, encouraging young workers to stick around in the area and improve education for kids who "otherwise lose their internet connections once they leave the school grounds."

I largely agree with Still’s analysis- the lack of high-quality broadband in many parts of Wisconsin has made us even more non-competitive economically, and if we can get more of this state wired and up to adequate speed, it’s a good thing, regardless of who is doing it.

But given that we already have combined budget deficits on the order of $1.5 billion, I was wondering where this money could be coming from. A look at the text of the bill Governor Walker was promoting indicates that the money is already there, but they’re using the money for a different reason.

The bill makes changes to funding for grants made by the PSC for constructing broadband infrastructure in underserved areas. Under current law, $6,000,000 was transferred from the universal service fund (USF) for making the grants, but current law also limits the total grants made in a fiscal year to $1,500,000. The bill eliminates that limit. The bill also provides additional funding for the grants by doing the following: 1) transferring an additional $6,000,000 from the USF; 2) transferring $5,000,000 from moneys received under a federal program for assisting schools and libraries in obtaining telecommunications services and Internet access, which is commonly known as the federal e-rate program; and 3) at the end of each fiscal year, transferring the unencumbered balances from other USF-funded appropriations. Also, beginning in fiscal year 2017-18, the bill allows the PSC to fund its administration of the broadband grant program from contributions made by telecommunications providers to the USF.

I’m not entirely sure if the state has the flexibility to take the money from that federal program for schools and libraries to a wider purpose like general broadband accessibility, but when has something like laws stopped these guys before?

As a 2015 audit of the USF noted, the money comes in by levying a fee on all telecommunications providers (which you eventually pay as part of your Internet/TV services)

Statutes require most telecommunications providers in Wisconsin to contribute to the USF. The PSC is responsible for designating the method by which contributions are calculated and collected. Each October, the PSC determines the rates that will be used to assess each telecommunications provider for its share of contributions. When setting these rates, the PSC should ensure that revenues collected in the current year and any unspent revenues collected in the prior year are sufficient to cover current year appropriations. However, the PSC did not consistently consider unspent revenues when establishing annual assessment rates. As a result, a cash balance accumulated in the USF.

The state’s Annual Fiscal Report indicates that USF cash balance keeps going up in recent years, going from $5.55 million at the end of FY 2014 to $8.50 million in FY2015 and $14.59 million at the end of FY2016. So Walker wants to use some of this extra money to expand broadband availability, as opposed to adding funding to other items that the USF pays for, like aid to Wisconsin’s public libraries or other telecommunications access programs. And that in itself may be OK, as a way to shift resources to places where they are most needed without having to raise taxes or find other places to cut money, and to illustrate a new direction in state policy.

The only problem I have with this is we should be immediately suspicious of who gets these new contracts, particularly given the GOP hacks that Walker has appointed to the PSC (see Huebsch, Mike and Nowak, Ellen), and the fact that Walker vetoed the ability of the Joint Finance Committee from having input on an appropriate level of funding for rural broadband, and preventing JFC from saying no to any rate changes that the PSC might want to put in (see item 2 in this Fiscal Bureau summary of the PSC’s budget).

As for the Technology for Educational Achievement program (TEACH), it basically extends the program and redirects the money into the rural broadband program.

Under current law, the TEACH program offers telecommunications access to school districts, private schools, cooperative educational service agencies, technical college districts, independent charter school authorizers, juvenile correctional facilities, private and tribal colleges, and public library boards at discounted rates and by subsidizing the cost of installing data lines and video links. As part of the TEACH program, DOA awards information technology block grants to school districts to improve information technology infrastructure. Under current law, the information technology block grant program ends on July 1, 2017.

This bill delays the sunset of the information technology block grant program until July 1, 2019. In addition, the bill authorizes DOA to award an additional round of information technology block grants before July 1, 2017. The eligibility for these grants is expanded to include school districts that have up to 26 pupils per square mile. These grants are in addition to any grants a school district may have already received under the program during the 2015-17 biennium and therefore do not count towards the maximum amount a school district may receive in a biennium. The bill also consolidates the appropriations for TEACH contracts into a single appropriation. Finally, in fiscal year 2016-17, the bill transfers $7,500,000 of moneys received under the federal e-rate program to the consolidated appropriation for TEACH contracts.

Again, I don’t see that shift as a big deal, because a kid getting broadband access at home certainly could benefit academically so I don’t have a problem with switching things. Except that I’m curious to know if this throws more burden back to the public schools to keep up their technological needs. That, and are the Walker folks going to be able to use the federal e-rate money this way (or will the new Trump Administration care)?

If this new effort ends up getting much of the rest of the state wired and economically up-to-speed, I’m happy with it. But let’s not forget one simple thing. THIS COULD HAVE BEEN DONE 5 YEARS AGO IF WALKER DIDN’T TEABAG BROADBAND EXPANSION WHEN HE TOOK OFFICE. Just like with the high-speed train issue and related rail maintenance, state taxpayers and rate payers are shelling out more in later years to get the same thing that would have been in place by now if Walker had just decided to govern properly. And you don’t get “backsies” for figuring it out after you realize your first choice of action was an economic and political failure.