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The NTIA just opened up applications for the first wave of $1.44 billion in Digital Equity Capacity Grants
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States and territories will use those funds to bring their digital equity plans to life, setting up programs to teach people how to use their internet service
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Proposals for the Capacity Grants are due in two months
The National Telecommunications and Information Administration (NTIA) just put $811 million in digital equity funding on the table to teach people how to use their internet service and the technology available to them.
This marks the first wave of funding available through the $1.44 billion Digital Equity Capacity Grant Program. The NTIA will now start receiving applications from all 56 states and territories, with additional support earmarked for Native entities, to provide the tools, skills and programs necessary for meaningful access to internet.
The Capacity Grants Program is the second of three initiatives outlined in the Digital Equity Act, which is collectively injecting $2.75 billion into closing the digital divide. Its first grant program, the State Digital Equity Planning Grant Program, kickstarted the process by allocating $60 million to states and territories in 2022.
That first program was strictly for planning purposes. States and territories used those funds to craft digital equity plans, including hiring consultants and engaging with local stakeholders to identify barriers to digital access. Since then, they have submitted their digital equity plans to the NTIA for approval.
Once they get the green light, they can apply for the Capacity Grants to put their plans into action.
Angela Siefer, executive director of the National Digital Inclusion Alliance (NDIA), said the Capacity Grant program is “a big deal for those of us who've been working on digital inclusion.”
“There's never been a grant program of this size,” Siefer told Fierce Telecom.
Some states have indicated that they’ll consider using funds from other broadband deployment programs, like BEAD, for digital equity initiatives. A representative for the Colorado Broadband Office told Fierce this week that depending on the state, “BEAD funds may be used for digital equity," but said the Colorado BEAD funding will not.
Siefer stressed that even for states with a digital equity piece in their BEAD plans, it would only be considered after they’ve built out broadband infrastructure where it's needed, if there’s any money left.
Proposals for the NTIA's Capacity Grants are due in two months. Once approved, states can open up subgrant applications from eligible entities such as community-based organizations, libraries and non-profit organizations. Importantly, ISPs are not eligible subgrant recipients.
For this round of the Digital Equity Capacity Grant Program, $760 million is available to 50 states, Washington, D.C. and Puerto Rico, with $45 million designated for Native entities and $8.4 million allocated to territories. California leads the NTIA's list of "tentative allocation amounts," at $70 million. Texas could get around $55 million, followed by Florida ($41 million) and New York (around $37 million).
More digital equity money coming soon
Soon, the NTIA will launch the Digital Equity Act’s third program, the Digital Equity Competitive Grant Program.
That program has a $1.25 billion pot that will be available to entities like political subdivisions of states, nonprofits and local educational agencies, among others. The competitive grant program will launch 30 days after NTIA makes its first Capacity Grant Program award.
Unlike the Capacity Grant Program, the Competitive Program will be a chance for organizations to form partnerships “based on something that's not state-focused,” Siefer said. For example, organizations that provide services to older adults across five different states might apply for the federal competitive grants together and create a program specifically focused on tech skills for older adults.
Not an ACP hero
It is a bit ironic that all these programs to teach people how to use internet service will start just as that very connectivity is in jeopardy.
The Affordable Connectivity Program (ACP), which subsidizes internet access for low-income Americans has less than $3 billion left in the bank, and over 23,000 households are currently on an enrollment freeze. Calls on Congress to pass legislation that would extend funding for ACP persist, though time is dwindling with the program expected to run out of money sometime in April.
Unfortunately, these digital equity grant programs will not be the answer.
In fact, the original idea was for ACP and Digital Equity Act money to work together.
"This is a bitter sweet moment considering it's taking place on the eve of the shutdown of the Affordable Connectivity Program," said Jake Varn, associate manager with Pew's broadband access initiative. These digital equity investments in infrastructure, devices and skills were "predicated on the continuation of ACP, and their effectiveness will be severely impacted if ACP is allowed to shutdown," Varn told Fierce in an email. "This should be the final wake up call Congress needs to extend its funding."
States should probably not try to use their money from the Capacity Grant Program to fill the ACP’s soon-to-be vacant role either, because there would be no money left for digital skills training, Siefer said. “They may want to do a couple of pilot projects to see what they might be able to get started. But if they tried to fully fill the ACP gap, there would be nothing left.”
“In a perfect world, we'd still have ACP, and then we would have these grants that are teaching people how to use the connectivity that they now have,” Siefer added.
Hopefully, the digital equity programs started with this new money will avoid the same fate as the ACP. To do so a large focus for states and other grantees should be on using the money to sustain these programs, Siefer continued. “Yes, we're excited about the money, but we're also figuring out how do we support them when this money is gone."