In October 2022, I wrote a blog about a bipartisan attempt to exempt broadband grant funding from being taxable income. Unfortunately, Congress has still not moved this legislation forward. Any company pursuing any federal and most state grants needs to be aware of the tax implications. In the past, the Internal Revenue Service (IRS) had the authority to excuse grants from being taxable, and the agency excused the taxes on grants made from the National Telecommunications and Information Administration's (NTIA) 2009 Broadband Technology Opportunities Program (BTOP) and Broadband Infrastructure Program (BIP) grants. But the IRS lost that authority in the 2018 Tax Cuts and Jobs Act. It now takes specific action from Congress to forgive tax on grant income. Fully taxing the infrastructure grant money and then also taxing the payrolls of the folks who build the grant-funded project feels like double taxation to me. We don’t tax corporations on gross sales. Corporations only pay taxes on profits, but most of the tax from sales to corporations comes from the taxes on the salaries paid to employees. An argument can be made that grant revenue used for infrastructure isn’t taxable – but it involves an understanding of accounting to understand this. But saying that broadband providers will eventually get the money back ignores the practical impact of making infrastructure grants taxable. Grant money is given to providers as they build the network. If it takes three years to build a grant-funded fiber route, then the corporation gets the grant award spread over those three years. In each of those years, the grant money is considered to be income. This extra taxation makes it a lot harder to justify taking a broadband grant. Providers consider grant projects because they add customers and increase economy of scale. But nobody wants to take on a grant project that is a cash loser.

Unlike many communities in Michigan, every resident in Holland is served by one of two incumbent internet service providers. However, available speeds, network quality, and provider options negatively impacted educational outcomes, work-from-home opportunities, and overall quality of life in the area, particularly during the pandemic. Today, Holland has taken a significant step forward by awarding a contract to develop and construct a publicly-owned open-access fiber network that will span across the entire city. Public fiber to every home in Holland by 2027 was furthered significantly by the dogged determination of an individual who sought to leave a lasting legacy of a united and well-connected community. This champion built upon the community’s history of promoting the common good while acknowledging and surmounting his own personal limitations. Pete Hofswell, Broadband Services Superintendent at the Holland Board of Public Works, has been a serious factor in getting Holland, Michigan, to commit to a publicly-owned, open-access, fiber network. By engaging with the community to understand the needs of residents, creating educational initiatives highlighting the advantages of dependable broadband, and prioritizing personal growth and leadership development, Pete’s efforts led to the successful approval of a millage, which funded the provision of public broadband for every household in the community.

[Dr. Pierrette Renee Dagg, Ph.D is a Benton Institute Digital Opportunity Fund Fellow, the Director of Technology Impact Research at Merit Network.]

The Vermont Community Broadband Board has approved amendments totaling approximately $20 million to increase broadband grant funding for two communications union districts (CUDs). CUDs are groups of towns in the state that work together to obtain broadband buildouts to unserved areas within the CUD. The decision to up the funding was made via vote of the VCBB on July 18, 2023. Maple Broadband will receive $2.1 million more for its buildouts and NEK Broadband will receive $17.9 million more for its buildouts. The funding came through the(American Rescue Plan Act - State Fiscal Recovery (ARPA-SFR) fund.

The Vermont Department of Public Service is seeking input from the public regarding the telecommunications facilities siting process (as established under 30 V.S.A. §248a). The goal is to conduct a study that ensures that the siting process is done in a manner that is transparent, fair, and responsive to the needs of the community, while also considering the development and expansion of telecommunications infrastructure in the state. The Department will seek input via multiple means and from various stakeholders. Public input sessions will be held to ensure those impacted by technological barriers are able to have their voices heard.