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Can North Carolina Spend $30M on Broadband Before Year End?

Officials say the federal relief funds would help reduce the lack of adequate Internet connections in the far reaches of the state, but Republican lawmakers disagree with the governor that the funds can be used in time.

(TNS) — North Carolina has $30 million of federal money to spend on expanding broadband internet to the state's rural areas, but there's a chance it might not be spent.

The General Assembly included rural broadband expansion grants in a COVID-19 relief package that spent federal CARES Act money. The grants supplement the Growing Rural Economies through Access to Technology (GREAT) grant program and was part of a nearly $1 billion relief bill the legislature passed in September and Gov. Roy Cooper signed into law.

But the deadline for states to use that CARES Act money is Dec. 30. Some North Carolina Republican lawmakers disagree with the Democratic governor's office over whether it can be used in time under federal rules, potentially affecting dozens of projects across the state.

State Senate Republicans, including Senate leader Phil Berger, sent Cooper a letter Friday asking why the grants are stalled. Over the weekend, the Cooper administration responded in a letter to the senators to explain the holdup. The executive branch is concerned that federal guidance about spending the money doesn't allow the grant funding to provide the broadband service by the deadline.

There also are concerns the federal government would then take the money back.

Expanding high speed internet access is one of his priorities, Cooper said Monday, when asked about the grants during his weekly COVID-19 briefing.

"In fact, I think we should have a bond that would put a quarter of a billion dollars into this effort," he said.

The lack of adequate internet connections in the far reaches of the state has been exacerbated with the coronavirus pandemic forcing thousands of students to attend school virtually and others needing it for telehealth visits and working from home, The N&O previously reported.

Cooper said his administration wants to fund the GREAT grants program, but U.S. Treasury Department regulations on how to invest CARES Act money is "continuing to evolve and change."

The N.C. Department of Information Technology, which is part of the Cooper administration, does not think the extra grants will pass muster with the U.S. Treasury guidance for CARES Act money.

But that doesn't mean there won't be a solution.

"This money was halted for the time being because the interpretation was it violated Treasury [regulations]," Cooper said. "We're working closely with legislators, members of Congress, the U.S. Treasury — we want to get funding to rural broadband areas and I'm going to keep fighting for that, it's absolutely critical."

Cooper spokesperson Ford Porter told The News & Observer Monday in an email that the governor's office "continues to work to identify a solution in compliance with federal rules."

'Frustrating' Situation

Republican Sen. Jim Perry told The News & Observer in a phone interview Monday that they hope to have a solution within about a week. Perry signed the letter to Cooper, along with 14 other Senate Republicans.

"I think this is probably equally frustrating for all of us," said Perry, who represents Lenoir and Wayne counties.

"Frequently the governor gets mentioned, but I think it gives benefit of the doubt to everyone in his administration," he said. "You're talking about people, they're all trying to do their job right, and the directions on it, the guidance have been somewhat vague, and I think that's fair."

Lee Lilley, the legislative director for Cooper, told senators in a letter that the governor welcomes their "thoughts on how we might need to proceed to meet these commitments" to expand broadband under the state and federal laws.

Perry thinks the answer could be in documentation from broadband companies making it clear they can increase broadband capacity by the end of the year, which is the CARES Act spending deadline.

Perry said as a rural lawmaker representing two poor counties, broadband expansion is a big deal.

"I'm looking for someone to be as aggressive for people in rural areas as I would be," he said.

(c)2020 The News & Observer (Raleigh, N.C.) Distributed by Tribune Content Agency, LLC.

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