Faster internet is a top priority for the legislature. But how can NC get there?

Drive west from the Triangle into the far reaches of Chatham County — where suburban communities give way to farmland — and the available internet speed slows to a crawl that makes working from home into a nightmare.

In neighborhoods between Siler City and Ramseur, speeds average around 5 megabits per second — well below the 25-megabit threshold for basic broadband and a far cry from the 1,000-megabit fiber internet offered in nearby cities.

According to a survey conducted by internet provider Randolph Communications, children there struggle to complete online assignments, while remote work is next to impossible.

And don’t even think about watching Netflix. “We do not even try to watch movies because of buffering,” Teresa Phillips wrote in the survey to Randolph Communications, which recently applied for a state broadband grant to build fiber lines along her rural road.

The program, known as Growing Rural Economies with Access to Technology, or GREAT, has been the legislature’s primary tool for expanding broadband access into rural areas. So far it’s helped private internet companies expand service to about 20,000 homes and businesses.

Because so many internet providers applied for the latest $30 million in grants, Randolph was among those that didn’t yet receive funding, although the company still plans to expand fiber internet service in Chatham County without state dollars.

But after a year in which the COVID-19 pandemic made the digital divide even deeper, state legislators want to do more this year to expand high-speed internet. Lawmakers from both parties and from across the state have listed it among their top priorities.

Rep. Dean Arp, a Union County Republican and a co-sponsor of the GREAT grant legislation, says more funding for grants is likely. The latest application period saw qualified projects seeking $64 million — well above the $30 million available, so he says that means $34 million of “shovel ready” projects are simply awaiting more action from the legislature.

So far, the grants have helped about 10% of the state’s 200,000 unserved or underserved households and businesses, Arp said. “It’s very specific about what it’s trying to accomplish, and we haven’t been able to accomplish all of that yet,” he said.

But lawmakers are considering other approaches that could solve other pieces of the broadband puzzle. Sen. Paul Newton, a Republican from Cabarrus County, said he’s working with the N.C. State Institute for Emerging Issues to create a stakeholder group to propose other policy solutions.

The group also includes the governor’s office, Arp, Rep. Brian Turner, D-Buncombe, Sen. Kirk deViere, R-Cumberland, Sen. Jay Chaudhuri, D-Wake, and Sen. Todd Johnson, R-Union.

“I think the industry is going to be coming to me with some ideas,” including a possible tax credit or incentives program. “We’ll put that in the mix with alternatives and ideas that we haven’t even thought of.”

Local government infrastructure leasing

Towns and cities will continue to push this year for an idea that so far hasn’t gained traction at the legislature: Leasing government-owned infrastructure so that private providers can use fiber lines and power poles to expand service areas.

The N.C. League of Municipalities has pushed for a bill in recent sessions, but the idea continues to face opposition from major telecom companies and some Republicans.

Cities like Washington in Beaufort County want to be able to use existing infrastructure to attract new providers, which could result in higher speeds and lower rates.

Washington Mayor Donald Sadler said internet service in his community isn’t bad enough to qualify for the GREAT grants, but he’s heard so many complaints about the city’s one provider — Suddenlink Communications — that he joined with other nearby mayors in asking Attorney General Josh Stein to investigate. Sadler says people are paying up to $250 per month for internet speeds well below what the company claims to provide.

With its waterfront location near the coast, Washington could attract new residents with work-from-home jobs, Sadler said, but slow internet would be a deterrent.

“We have a lot of natural resources to offer, but that could be a business person’s concerns that we don’t have the necessary services to provide.”

Legislators, however, aren’t convinced that local governments are the right solution. “There’s enough of a track record of failure and risk in that area that that’s not a smart thing to do,” Newton said.

He pointed to the example of Salisbury, which developed its own high-speed internet service but ultimately lost money and sold the network to a private company. Local governments aren’t seeking now to build and operate their own services, however, and Newton said that for infrastructure leasing, “if there are guardrails to it ... I wouldn’t rule out the possibility.”

Derek Kelly, a government affairs director for CenturyLink, said leasing government-owned infrastructure would lead to “overbuilding where there’s existing networks.”

“The unserved pockets of the state are not within city limits,” he said. He also noted that local governments are responsible for permitting broadband construction projects, so it could mean “having to go into competition with people who are approving your permit.”

Kelly said some localities are taking up to three months to approve permits, which is slowing broadband expansion efforts. That’s something the legislature might need to address, he added.

Scott Mooneyham, a spokesman for the N.C. League of Municipalities, dismisses the criticism of infrastructure leasing from companies like CenturyLink.

“If the big telecoms are going to rule the day, I don’t think people should waste their time on this anymore, and North Carolina can suffer the economic consequences,” he said. “The League has spent three years making the case for more solutions and all solutions that are practical.”

Grant money for rural broadband

CenturyLink wants to see more GREAT grants instead, which it has been using to expand its service. It received grants recently for Franklin, Johnston, Harnett, Pamlico and Pitt counties. In Johnston, the grant will expand gigabit fiber to hundreds of homes in the rural Hardee Crossroads area north of Benson that currently only receive low-speed DSL service from CenutryLink.

Kelly said it’s been helpful that the latest grants made the state’s wealthiest Tier 3 counties eligible, because internet access in Tier 3 counties like Johnston varies dramatically from inner suburbs to the more rural communities. He wants to see that eligibility continue in future grant rounds.

The state currently bases eligibility for grants on data from Census tracts, but that’s problematic because it misses Census tracts where high-speed service isn’t available in all areas.

Perry says he wants to “take this initiative to the address level,” because “Census tract analysis is a blunt instrument.”

Future broadband initiatives, he said, will also need to consider new low-earth satellite internet services such as SpaceX’s Starlink currently launching in Canada. He sees that as a potential solution for areas that don’t have multiple providers to choose from, such as Washington.

“You suddenly see a future where the competition is brought by the private sector,” he said.

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This story was originally published January 25, 2021 at 10:46 AM with the headline "Faster internet is a top priority for the legislature. But how can NC get there?."