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Montana weighs applications for $200M+ in broadband grants

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Posted at 7:09 AM, Aug 09, 2022

HELENA — State leaders are preparing to make their recommendations on how to distribute more than $200 million in funding to expand access to high-speed Internet in Montana. Now, the next question will be whether to tweak the criteria they’ll use to award the money.

Montana’s ARPA Communications Advisory Commission held a meeting Monday, where they took testimony on the initial rankings of dozens of proposed projects to improve or expand broadband service. Applicants praised the work that’s been done, but they had strong disagreements about the actual scoring.

“I recognize this is a Herculean-type effort to get to what you’ve done,” said Mark Grotbo, CEO and general manager of Ravalli Electric Co-Op.

Under the federal American Rescue Plan Act, or ARPA, Montana was allocated $266 million to upgrade broadband access in unserved and underserved areas. The state put together the ConnectMT grant program and invited companies to make proposals.

Last week, CTC Technology and Energy – a contractor working for the state – released its preliminary rankings for the 75 proposed projects. They graded each on a scoring system adopted by the advisory commission. Applicants could get points for offering higher Internet speeds, connecting more unserved customers, contributing higher percentages of matching funds and getting the work done faster. They could also score points for a variety of goals aimed at addressing “equity and affordability,” including serving areas with high numbers of low-income customers and providing new connections for unserved or underserved health care facilities. The scoring matrix did not give any preference to local Montana companies.

In the initial list, 46 projects scored high enough to be recommended for funding. 20 of those were proposed by a single company – Charter Communications, the nationwide company that runs Spectrum internet services. Charter was set to receive up to $126 million – nearly half of the available funding.

On Monday, a number of local telecom companies shared their frustrations with the scoring system. They believed the rankings had missed some of their project’s advantages and that they encouraged development in denser suburban areas near existing service, instead of in more remote areas.

“We’re favoring low-cost, high-density areas that are commercially viable, at the expense of rural, high-cost areas,” said Geoff Feiss, general manager of the Montana Telecommunications Association.

“If adjustments aren’t made prior to this award being made, we’ll have to acknowledge that there’s a strong likelihood that some in the state will never have fiber to the home,” said Grotbo.

At a meeting last week, the advisory commission considered adopting a “provider cap,” limiting each company to no more than 35% of the grant money. Bridger Mahlum, a state government affairs director with Charter, urged members to keep the ranking system as it is, saying it shouldn’t matter who the provider is as long as they’re accomplishing the goal of improving broadband service.

“When we look at the big picture, at least the way I see it on behalf of this company, it’s about serving unserved locations, whether that’s in Clancy, Montana, or Glendive, Montana,” he said. “We want to get to all of them at some point, but the person who’s in that house – whether it’s just outside a relatively populous area of the state versus somebody in rural Montana, they both can’t get internet in their house, and we’re trying to solve that.”

Committee members acknowledged concerns about the scoring system. Misty Ann Giles, director of the Montana Department of Administration, noted that just a few points made the difference between a top-ranked proposal and one that didn’t qualify.

“We do admit that the scoring was tight, that it did not give the spread, and there are some areas that we need to work on,” she said. “But this was adopted by the commission, there was a lot of fair debate about it in December, and this has kind of been the rules of the road, if you will, for the last few months and throughout the process.”

The commission opted not to make a final decision on Monday. They will consider possible options for implementing a provider cap and for expanding grants to a wider geographical area before holding another meeting Wednesday, Aug. 17.

“Let’s see if we can find some more solutions,” said Sen. Jason Ellsworth, R-Hamilton, the commission’s chair. “I don’t think the solutions are there today to make any decision.”

The broadband discussion won’t end after the ARPA funding is allocated. The state is already planning to apply for additional funding through the bipartisan infrastructure bill passed by Congress last year. Giles said, under that law, each state is entitled to at least $100 million for broadband improvements, with more available based on their plan and their demonstrated need. She said they’re hopeful Montana can qualify for $300 million to $550 million.