With respect to broadband infrastructure, do eligible uses of ARP funds include: (i) expenses related to making broadband affordable for residents; and (ii) providing residents with devices for accessing broadband internet (e.g., laptops)?

Expenses related to broadband affordability and devices necessary to access the internet are both eligible uses under the American Rescue Plan Act of 2021 (“ARP”) Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”).[1] The U.S. Department of the Treasury’s (“Treasury”) Final Rule addresses the “gap networks” as a term that refers not only to the affordability of broadband infrastructure but also equipment such as routers, repeaters, and access points. [2] There are instances where broadband is available but is not accessible to households in some areas due to cost. Treasury guidance suggests that Treasury intends that municipalities will discern how to best serve communities at the local level. Concerning internet access and digital literacy, Treasury has included a wide range of programs and services, including those providing equipment such as tablets, computers, and routers, that will subsidize costs to households.[3]

The Final Rule states that eligible investments in broadband are those designed to provide services meeting adequate speeds and provided to underserved households and businesses. Understanding that states, territories, localities, and Tribal governments have a wide range of varied broadband infrastructure needs, the Final Rule provides award recipients with the flexibility to identify the specific locations within their communities to be served and to otherwise design the project.[4]

Treasury’s Supplementary Information discussion regarding broadband affordability encourages recipients to consider ways to integrate affordability options into their programs and to prioritize delivery of physical broadband connections that achieve “last mile” connections.[5] The CSLFRF Frequently Asked Question (“FAQs”) #6.5 also establishes minimum upload and download speeds of eligible projects.[6] It should be noted that additional information may be provided when Treasury issues new FAQs specific to the Final Rule. However, the information provided in the FAQ referenced (FAQ #6.5 and FAQ #6.6) remains true under the Final Rule.

FAQ #6.6 provides additional guidance regarding eligibility and states that recipients may use funds to assist households facing negative economic impacts, including digital literacy training and other programs that promote access to the internet and/or modernize cybersecurity as part of the provision of government services up to the amount of revenue lost due to the negative impacts of COVID-19.[7]

In addition, Treasury issued guidance on August 9, 2021, that outlines reporting requirements for broadband expenditures and adds further detail to the general reporting expectations for CSLFRF recipients. The Treasury Reporting Plan Template specifically lists broadband expenses and assigns those to be reported under the “EC5” category.[8] Municipalities may also reference the Treasury Recipient Portal Reporting Guide, which specifies the tiers of how expenses track to eligible use.[9] Treasury also encourages municipalities to consider the guidance issued in the Statement Regarding Compliance with the Coronavirus State and Local Fiscal Recovery Funds Interim Final Rule and Final Rule.[10]

Last Updated: January 26, 2022