Biden announces $42B allocations to boost U.S. Internet access (updated)
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President Biden has announced details of a $42B federal investment in expanding Internet access for Americans, kicking off a new leg of a tour promoting benefits of the 2021 bipartisan infrastructure law he signed.
Those funds will be distributed to all 50 states, Washington, D.C., and U.S. territories, to help deliver high-speed Internet to areas including "Appalachia ... tribal lands from Alaska to the Dakotas, coastal towns from Hawaii to the Pacific Northwest," Biden said, as well as suburban communities where some residents are still depending on dial-up access.
As part of the funding, "we're going to be able to connect every person in America to reliable high-speed Internet by 2030," Biden said.
The funds come from the infrastructure law's BEAD program (Broadband Equity, Access and Deployment).
The allocation is being informed in large part by maps generated by the Federal Communications Commission pointing to gaps in Internet access. About 8.5M U.S. homes and businesses don't have access to basic Internet service, the administration says -- and online schooling during the COVID-19 pandemic threw those gaps into sharp relief.
According to the FCC's map, states with the highest percentage of unserved businesses and residences include Alaska (32% unserved), West Virginia (30.2%), Montana (21.7%), Mississippi (20.4%) and Wyoming (15%).
Funding will be released in stages, with initial plans coming later this year set to tap about 20% of the total funds. And states will need to first tackle unserved areas before filling out underserved areas with the funding.
The money should provide additional incentives for big broadband providers -- notably including Comcast (NASDAQ:CMCSA), Charter (NASDAQ:CHTR), AT&T (NYSE:T), Verizon (NYSE:VZ), and T-Mobile (TMUS) -- to extend more access to rural and underserved communities, which is an expensive proposition with a low uptake of subscribers.
In a mixed Communication Services sector Monday, stocks tied to broadband provision were largely higher following Biden's speech. Charter (CHTR) was +2.3% and Comcast (CMCSA) +1.3%; AT&T (T) +1%, Verizon (VZ) +1.4%, T-Mobile (TMUS) +1.4%; Lumen Technologies (LUMN) +6.9%; Altice USA (ATUS) +16.4%; WideOpenWest (WOW) +4.3%; CableOne (CABO) +2.1%; Consolidated Communications (CNSL) +4.8%; U.S. Cellular (USM) +3.9%; Telephone & Data Systems (TDS) +3.3%; Frontier Communications (FYBR) +1.8%; Liberty Broadband (LBRDA) +2.1%.
Updated: Texas receives the biggest amount in absolute dollars, with $3.31B headed to the Lone Star state. It's followed by California ($1.86B), Missouri ($1.74B), Michigan ($1.56B), North Carolina ($1.53B), Virginia ($1.48B), Alabama ($1.4B) and Louisiana ($1.36B).