Iowa targets rural internet with $150 million broadband grants

DES MOINES — A nearly $150 million round of grants for rural broadband is expected to connect more than 12,000 Iowans to high-speed internet.

The Iowa Department of Management announced the projects funded in the latest round of the Empower Rural Iowa Broadband grant program last week. The funding focuses on “Broadband Intervention Zones” the state has identified as having the highest need for high-speed internet.

The $148.96 million in federal funding is split across 39 projects in 47 counties.

The money is coming from the Capital Projects Fund in the 2021 American Rescue Plan. The grants, ranging between $200,000 and $20 million, will cover up to 80 percent of the project costs.

Curtis Dean, the co-founder of the Community Broadband Action Network, said the funds will make a dent in the need for broadband in rural Iowa, but there are still tens of thousands of locations left to connect.

"It's going to take care of a pretty good chunk of the areas in Iowa that don't have adequate broadband today, but it's not a magic cure. It's not going to solve the problem," he said.

Projects will connect rural Iowans

In Plymouth County, Premier Communications, Inc., will receive $3 million to supply internet to more than 700 locations in the southwest portion of the county. Once the project is done, every resident will have high-speed internet, said Plymouth County Director of Information Technology Shawn Olson.

“If this gets done, there will be three or four counties in Northwest Iowa that will be completely fiber-to-the-home countywide, which is unheard of across the state of Iowa at this point,” he said.

Olson handled Plymouth County’s application for a Broadband intervention Zone and said the areas of the county still lacking high-speed internet have a hard time accessing basic necessities for business development and education.

“That technology is increasing so fast that having a fiber connection to a residence is a huge benefit for those residents to be able to have that reliable, high-speed internet,” he said.

The households being targeted for the government-assisted projects include those that are defined as "unserved," having access to less than 25 megabit download speed and 3 megabit upload, or "underserved," with less than 100 megabit download and 20 megabit upload. Many locations in rural Iowa have no wired internet and have to rely on spotty satellite or cellular coverage.

In rural Black Hawk County, more than 600 businesses and homes will get broadband infrastructure through three projects from Mediacom, La Porte City Telephone Company and Dunkerton Telephone Cooperative.

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Isaiah Corbin, director of development for the Iowa Northland Regional Council of Governments, said the projects will improve quality of life for Black Hawk County's rural residents and make the county a more attractive place to live.

"It's really going to improve the county's system and broadband and make us more attractive in terms of attracting people to live in these areas, to stay in these areas. And so it's a really big deal and a big investment for Black Hawk County."

While the funds covered 39 projects, more than 50 applications did not get approved. Dean said the demand for the grants illustrates a need for more public investments in broadband.

"They identified the need, the money just ran out before their project got approved," Dean said. " … The need is still there, and we've got to keep trying to roll that rock up the hill and solve these problems."

Grants make high-cost projects feasible

The grants cover up to 80 percent of the projects' costs with the aim of incentivizing providers to build to areas that would not be profitable otherwise.

The highest-value grant was $20.5 million given to Citizens Mutual Telephone Cooperative for a project across Wapello, Van Buren, Monroe and Appanoose counties. Mediacom received $19 million for a project that covers several locations in the state.

Providing government subsidies for broadband projects is important, Corbin said, because of the prohibitive cost of building in rural areas where there may only be a few houses for miles.

“A lot of these companies are either private or cooperatives, so they run on a tight margin,” he said. “And so without really that government boost into broadband investment, these individuals would remain the same in terms of their broadband coverage.”

More funding coming to Iowa

This will be the eighth round of broadband grants administered by the state, bringing the total amount spent on expanding access to more than $533 million. Most of that money has been federal funds from the American Rescue Plan and CARES Act.

Another tranche of federal dollars for broadband is coming Iowa’s way as a result of the bipartisan federal infrastructure law signed by President Joe Biden in 2021. Earlier this year, the White House announced Iowa would receive $415 million from the $42.5 broadband development portion of the law.

The money, which is expected to be available next year and will be targeted at the most high-cost areas in the state, will still not be enough to connect every Iowan to high-speed internet, Dean said.

Moving forward, Dean said Congress is not likely to pass more sprawling broadband programs like the ones found in the infrastructure law and COVID relief laws. Instead, funding may have to come from local and state governments.

"I believe it's going to take a combination of private capital and public capital," he said. "And it may be at the local level, it may be a community investing in broadband on their own or in partnership with a private partner to get that done. Because this is the last we'll see of the big blast of money from Congress."