Federal regulations prevent US bailout funds from being used to bridge the digital divide

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CLEVELAND, Ohio – Providing affordable internet to low-income families has become a priority in cities and counties across America, and yet the American Rescue Plan and its $ 1.9 trillion in pandemic-fueled funding are doing little to help.

This is of great concern to organizations like the Greater Cleveland Partnership, which is one of several organizations in northeast Ohio desperate to bridge the digital divide in one of the most disconnected regions in the country.

The problem lies in the U.S. Treasury Department’s interim rules governing the use of funds from the bailout bill, said Baiju Shah, CEO of the partnership.

One rule is that the money from the bailout bill cannot be used to expand broadband service while there is already a wired option nearby, Shah said, even if that option is not affordable.

A second rule makes expansion prohibitive because it requires that the money be spent on providing a premium level of service well above federal standards.

Cities and counties, including many in northeast Ohio, are counting on federal and state help to bridge the digital divide so families no longer struggle to remotely connect to their schools for telemedicine counseling or doing other aspects of daily life that are increasingly being used on the internet.

The inability to access federal funds is a double disappointment to these communities, as are Republicans in the Ohio Legislature Finding Eliminate $ 190 million in proposed government funding to expand the Internet and otherwise limit the ability of communities to run their own programs.

The Greater Cleveland Partnership is among other civil society organizations calling for the change to be repealed.

Shah said there could be multiple reasons for the Treasury Department’s rules, including pressure from the private sector, a focus on rural needs, or a desire for “future proof networks” to take longer to become obsolete.

However, Dorothy Baunach, executive director of DigitalC, a Cleveland-based nonprofit that seeks to connect low-income neighborhoods with affordable internet, believes the for-profit industry is behind federal regulations and the Ohio bill change.

“They are trying to block competition,” said Baunach. “… that worries me so much.”

AT&T spokesman Phil Hayes did not comment directly on federal regulations affecting broadband spending, but said cleveland.com and The Plain Dealer previously stated that AT&T did not propose or endorse the Ohio Legislative Amendment to the Budget Act.

Spectrum spokesman William Morand was not immediately available for comment, but previously said Spectrum had “no position” on the change that would abolish $ 190 million in Internet spending.

Shah said the Greater Cleveland Partnership had contacted senior officials in the Biden government and members of Congress to complain about the Treasury Department’s rules.

On the spot, Cleveland Mayor Frank Jackson and Armond Budish, Executive Director of Cuyahoga, said they would like to use public funds to connect families to the Internet.

Budish administration is working on a plan to expand affordable broadband services to areas with many disconnected residents.

In December, the county asked for ideas on how to do this and is expecting concrete proposals in July to expand affordable Internet access to census trails where more than 20% of the population are disconnected, said Catherine Tkachyk, chief innovation and performance officer for Cuyahoga County.

The county is part of the Greater Cleveland Digital Equity Coalition, which works with the Greater Cleveland Partnership and the Cleveland Foundation, among others.

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