Government Agencies Make Funding and Investing in Broadband Infrastructure Easier for Communities in Need

Schools, hospitals, libraries, and emergency services all have a few things in common — they are vital as anchors within a community and depend on high-speed Internet access to provide their services. Unfortunately, many low or moderate-income areas lack the broadband access that could help them revitalize their neighborhoods and be competitive in the digital age. Households in the U.S. making $25,000 or less have a broadband adoption rate of 47 percent, while those making more than $100,000 have an adoption rate of 92 percent.

The Federal Reserve Bank of Dallas recently released a report on the importance of broadband access for community development. The report identifies how broadband can be transformative for a community in many ways. Digital skills are increasingly important in the workforce, students need the Internet to do research and complete their homework, access to financial services are more readily available with online banking, and telemedicine improves the health of people who otherwise wouldn’t have access to healthcare. Broadband also is increasingly essential for small businesses who can find resources online along with tools to modernize everything from payroll to marketing.

Knowing how important broadband can be for communities, we’re excited to hear that the Federal Financial Institutions Examination Council (FFIEC) has redefined the guidelines for the Community Reinvestment Act (CRA) that will allow for loans towards broadband investments that can help bridge the digital divide. These new CRA guidelines will expand financing for the construction, expansion, improvement, maintenance or operation of essential infrastructure that help revitalize and modernize communities.

Local and national banks can provide the line of credit needed to provide groups like the rural West-Central Minnesota Fiber Optic Cooperative the money to build a $45 million telecommunications network when the incumbent providers were unwilling to invest in a fiber-to-the-home network. The network will provide high-speed fiber connectivity to the 10 municipalities and 17 townships that have provided support for this initiative.

The impacts on communities where fiber can deliver lightning fast connections, like those in rural Minnesota, are transformative. In places like the Rio Grande Valley of South Texas past attempts to increase broadband access had been siloed across different groups. The lack of communication and coordination lead to ineffective results. However, stakeholders throughout the Rio Grande Valley formed a partnership with the Federal Reserve Bank of Dallas to create a robust regional fiber-optic networks. Partners included city governments, school districts, and universities, who were able to work with local banks to fund this immense undertaking.

To guide communities through the process, the Federal Reserve Bank of Dallas’ report also provides advice and resources on how to navigate the CRA and ensures that your community projects get the funding that they need. Government institutions are working with nonprofits and local partners in order to provide all communities with the “infrastructure of opportunity” that will allow all Americans to succeed.

The need for these networks is obvious and the willingness for communities to build their own cooperatives to fill the void left by incumbents is inspiring. Government policies like the Community Reinvestment Act that make financing these projects possible is an important step forward to closing the digital divide and connecting the unconnected.