On Wednesday, Gov. Greg Gianforte Wednesday approved more than $300 million in grants for telecom companies to bring broadband to Montana’s underserved areas. It took more than a year of work by a bipartisan state commission to determine how the funds from a federal pandemic stimulus package would be distributed. Montana Free Press deputy editor Eric Dietrich has been following the commission’s work and joined MTPR’s Austin Amestoy to break down the latest developments.
Austin Amestoy: Okay, Eric, $309 million — where is all this money coming from?
Eric Dietrich: So this is federal money that was given to the state of Montana to spend through the American Rescue Plan Act, which passed in 2021. And it was initially intended to be a kind of a flexible pot of money to help the state patch its budget up if the pandemic created a budget shortfall. But, as it turned out, the budget was in fine shape, so the state had, essentially, a flexible pot of money here. And lawmakers last year chose to use a big chunk of it to try to expand rural broadband connectivity.
Austin Amestoy: Based on what Gov. Gianforte approved on Wednesday, what parts of the state are set to “go online,” so to speak?
Eric Dietrich: There are a lot of projects — there are more than 60 projects here, so that's a tricky question to answer in that way. But, in broad strokes, the projects are scattered across the state. But most of the money is going to broadband projects that are kind of on the outskirts of major cities. I did some math — it looks like about two-thirds of the money is going to the counties that are in the top-eight counties in the state by population. And then, to take one example, Ravalli County, south of Missoula, which has more people than Butte-Silver Bow [county] does now, nearly a quarter of the grant money is going to that county alone.
Austin Amestoy: Well, we know that a third of Montanans don't have access to broadband, according to the FCC. So how did the state figure out how to target those most underserved areas?
Eric Dietrich: What the state did is they tried to map where there isn't connectivity that meets, kind of, adopted speed standards, and then they map those areas and then they solicited proposals from private Internet companies for taking grant dollars to expand those companies’ networks to serve those areas. And so, the grants we're hearing about this week, those are grants to private companies to expand their network in a way that would let customers sign up through them that couldn't get service from them currently.
Austin Amestoy: Well, I can't imagine there being much precedent for the state doling out grant money in these huge amounts, right?
Eric Dietrich: Yeah, so there are two things that are really unprecedented for Montana here. One is the amount of money, and we'll talk about that. And the second is, this is really the first time the state has done a large broadband program. So it's not something that state officials have done before. They've acknowledged that it's a learning experience. And, you know, 'We had $300 million and we've learned some lessons as we've tried to give that money out.' But again, that sum of money, it's huge. You know, I have to use words I can use on the radio here. But this is a big pot of money. The state typically awards infrastructure grants a few million dollars at a time, and this is, like, 10 times that. For example, one company here, Charter Communications, which does business in Montana under the Spectrum brand, is getting $110 million from this program.
Austin Amestoy: Wow. That is a huge amount of money — for one company, especially, I imagine.
Eric Dietrich: That's like 100 bucks per Montana resident.
Austin Amestoy: So how did the other Montana-based telecom providers react to Charter getting that huge lump sum?
Eric Dietrich: So you have Charter, which is, of course, a large national company. You know, it provides broadband to a lot of people in Montana and it has a lot of capacity to build. And then you have smaller Montana companies that provide to smaller customer bases. And many of them also wanted a share the pie here, and were applying sometimes in competition to Charter. And generally, where they were in competition, the state prioritized the Charter awards and that created some consternation by the folks that were saying, you know, they think they can do a better job.
Austin Amestoy: So how did the state go about ranking these grant applications from all these companies trying to get some of this money?
Eric Dietrich: What they did is something that's pretty common when the state's giving out competitive grants. They created a scoring matrix to score particular applications, and then use that matrix to rank which projects they thought were better. There was, of course, a lot of debate about whether that scoring matrix was set up in the right way. But, you know, that's the way they did it. And then, of course, the people running the process say, 'Yeah, it might not have been perfect, but it was fair and transparent,' they say.
Austin Amestoy: If I remember correctly, though, republicans were largely against the American Rescue Plan Act when it passed Congress originally. And now we have a, you know, primarily Republican Legislature and administration, you know, figuring out how to spend these broadband funds. So how did that dynamic factor in?
Eric Dietrich: Right. Yeah. That, of course, is one of the central ironies here. You know, Governor Gianforte, who was a Republican, was initially opposed to the American Rescue Plan Act. He thought it was too much money, he thought it was a waste, that it would drive up inflation. But, of course, it's his job to spend that money, and he's going to spend that money. And if he does it effectively, he's going to take credit for it, because that's what politicians do. So there has been that dynamic at play here.
Austin Amestoy: The governor has approved these grants now, so what does the timeline look like from here? When may Montanans begin to see broadband rollout out in their communities?
Eric Dietrich: So technically, the companies have a couple of years to do this work. There's some discussion about whether they could potentially get an extension. What the action this week means is that money can start going out. Of course, we're in winter now and the ground is frozen, which makes it hard to dig, so we may not see construction start until next year.
Austin Amestoy: Once again, Montana Free Press deputy editor Eric Dietrich with a breakdown of new broadband grant dollars. Eric, thanks for sharing your reporting.
Eric Dietrich: Thanks for listening to me.
