Arkansas will need about $550 million to extend broadband access to households in the state still without high-speed internet, according to a commissioned report released Monday.
The report from Broadband Development Group was compiled after a six-month, statewide study to develop a master plan for addressing broadband service access in the state, which has consistently ranked near the bottom for high-speed internet access among U.S. states.
"I'm pleased to see the state broadband report and recommendations from Broadband Development Group," Gov. Asa Hutchinson said in a news release Monday. "We've already made significant progress with an aggressive approach to getting broadband deployed to rural areas of Arkansas. I'm appreciative of the thorough report and recommendations of BDG, and I am particularly grateful for the partnership with the Arkansas General Assembly in getting ahead of the curve with an early start to deploying rural broadband. I look forward to expedited progress as we put into operation the recommendations and continue our partnership."
Requests to speak directly to a representative for Broadband Development Group about the report were denied. Instead, Alisha Curtis, spokeswoman for the Arkansas Department of Commerce, answered questions through email.
"BDG conducted a six-month, statewide study in which they hosted a series of more than 300 community meetings in all 75 counties and received more than 18,000 surveys from residents across the state," Curtis said.
The 79-page "Arkansas State Broadband Plan" was completed in partnership with over 30 broadband providers as well as several organizations, including Arkansas Farm Bureau, Arkansas Municipal League, Arkansas State Chamber of Commerce, Arkansas Department of Education, Arkansas State Library Association, Association of Arkansas Counties and Arkansas Sheriffs' Association.
The study, which can be found at arkansasonline.com/419broadbandreport/, was commissioned to help direct millions of dollars of investment as state officials and internet providers deploy broadband to still-underserved areas of Arkansas.
"The broadband report recognizes the significant work we've done, and groundwork laid with the Arkansas Rural Connect grant program established by Governor Hutchinson in 2019," Secretary of Commerce Mike Preston said in the news release. "We now have a road map and a detailed plan to fill the remaining gaps of the underserved areas of our state. We look forward to continuing to partner with Internet Service Providers, electric cooperatives, the Legislature, and other key stakeholders, taking recommendations from this plan and updating the broadband rules."
The report assessed available broadband assets in the state, mapped where coverage gaps exist, calculated the costs to bridge the gaps and recommended improvements to the state's broadband strategy.
After reviewing Federal Communication Commission data, recent federal and state grants, provider network data and address-by-address service availability, the report concluded that Arkansas has 251,000 households lacking adequate broadband access, meaning those with internet speeds less than 100 megabits per second.
That means that less than 21.5% of the estimated 1.7 million Arkansas households have adequate internet access. (Household estimates are according to the U.S. Census Bureau.)
That number of households to target was whittled down to 110,000 by the consultants after:
• Subtracting 41,000 households mischaracterized by the FCC.
• Taking away another 100,000 households that the state is working on through various state and federal grant programs to create coverage. (Federal rules prohibit the state from granting funds to these areas covered by the federal Rural Digital Opportunity Fund.)
The expected cost for the effort to improve coverage for those 110,000 households is roughly $550 million, according to the report.
Hutchinson said in the release that the state anticipates future funding for broadband through the Coronavirus Capital Project Fund, Infrastructure Investment and Jobs Act and a second installment of Arkansas Rescue Plan Act funds this summer.
"Through the Arkansas Rural Connect grant program at the Arkansas Department of Commerce, we funded projects totaling $368M that deployed broadband to over 109,000 households in the state already," Curtis said. "After this, the report recognized that Arkansas now has 210,000 underserved households, 100,000 of those being RDOF territories that the state cannot fund grants to. This leaves 110,000 households that we can immediately focus on."
In the report, the group suggested that part of the $550 million price tag could be funded by tapping into federal funds in the range of $254 million to $358 million, reducing the remaining households down to about 10,000 underserved households within three years.
The final 10,000 homes represents less than 1% of Arkansas households, but would be the "toughest barrier to overcome" since many of the homes are in some of the most rural and sparsely populated areas of the state, Broadband Development Group said in the report.
The group estimated that it would take more than $200 million, or about 30-40% of the remaining additional federal funds, to get to zero, coming out to roughly $20,000 per household to get broadband access to those final 10,000 households.
The consultants suggested in the report that the state institute some modifications, including initiating competitive bidding to solicit multiple proposals for each project, recommend affordable rates at roughly $50 or less per month for internet service and "future proofing" the technology deployment.
"We know that fiber optics technology is the key in giving us the ability to ramp up speeds in the future," the group said in the report. "We don't want the state to fall behind again, and that's why future proofing with fiber optics is such a critical investment for the state."
Curtis said that digital equity and inclusion for those Arkansans who are unable to afford the monthly access costs is part of the funding through the Infrastructure Investment Jobs Act, "which we are seriously looking into."
"We will continue to have dialogue about how to best address this issue," Curtis said.
Conway Corp., the city-owned utility company for Conway, already works with the school district to offer services to students' families who needed service for remote learning, said chief marketing officer Crystal Kemp.
"We have been offering reliable, high-speed internet services to the Conway community for 25 years," Kemp said. "During that time, it has become an essential utility service and should definitely be available in all areas of the state."
AT&T Arkansas president Ronald Dedman said the company's Access from AT&T plan -- when combined with the federal Affordable Connectivity Program -- provides free home internet service for eligible households.
Dedman said he is encouraged by the work commissioned by Hutchinson's administration to give a comprehensive view on providing broadband to every person in Arkansas.
"AT&T agrees that a competitive process favoring fiber optic technology as the best long-term solution and encouraging affordable plans for low income households is a solid way forward," Dedman said. "Working towards accurate mapping in concert with ongoing work with the FCC will also help to get broadband into more homes and businesses of Arkansans. We look forward to studying the full results of the report and continuing our work to bridge the digital divide through effective public-private partnerships."
Broadband Development Group of Little Rock was hired in October by Hutchinson's administration and later endorsed by the Arkansas Legislature for $2.2 million -- despite being the highest bid among three submissions.
The company also scored the lowest on a technical basis compared with its two competitors.
State legislators said at the time that they liked the company's "boots on the ground" approach of holding town-hall-style meetings to gather public input and Broadband Development Group was an Arkansas-based company while the other two bidders were from Ohio and Texas.
Senate President Pro Tempore Jimmy Hickey, R-Texarkana, said in the release that the broadband initiative should make Arkansans "extremely proud in how their government" worked together.
"The Legislative Branch and the Executive Branch have worked together to provide an efficient avenue to provide service across a broad area of the entire state of Arkansas," he said.
Speaker of the House Matthew Shepherd, R-El Dorado, who was just elected to his third term leading the House, said it is a critical time for the state to close the digital divide.
"The Legislature invested in this report to develop a strategic plan moving forward," Shepherd said. "We want to see Arkansans not only connected but operating at speeds necessary for work and education in years to come."
The Arkansas Department of Commerce plans to hold a stakeholders' meeting in May to discuss the report and seek community feedback.
"In the next 12 months, our Broadband office will continue to work with stakeholders and members of the legislature with a focus of getting broadband out to 110,000 households currently without service," Curtis said. "We anticipate future funding for broadband projects by mid-summer."