Michigan watchdog group, Citizens Against Government Waste, CAGW, says some of the state’s funds from the National Technology and Information Administration’s (NTIA) Broadband Equity Access and Deployment program (BEAD), are at risk of being misspent.
The Infrastructure Investment and Jobs Act allocated $42.45 billion in broadband funding for the U.S., which each state guaranteed $100 million. Last month, CAGW President Tom Schatz asked the Department of Labor and Economic Opportunity to amend the draft outlining how the BEAD money would be spent in the state.
NTIA allows individual states to define a community anchor institution, CAIs, which are supposed to enable greater connectivity in currently unserved communities, according to the CAGW’s Alec Mena.
“To correct the draft’s misplaced and wasteful funding designations and make more money available for unserved households and businesses throughout Michigan,” Schatz said in the letter.
The CAGW said the Michigan High-Speed Internet Office (MIHI) expands eligibility for BEAD funding to classify over “100 entities categorized as stadiums, zoos, aquariums, wildlife centers, and convention centers, many of which are privately owned, for-profit businesses” as CAIs. The group pointed out that in addition to libraries and community centers, the MIHI proposal also includes a trampoline park, a monster truck rally center, a “Hell-themed” paintball facility, and over a dozen NASCAR or drag-racing speedways.
“MIHI has developed a broad list of organizations that can be considered community anchor institutions because we believe that no matter where Michiganders are or what interests they have, the organizations that interest them and the places they meet to pursue those interests should be able to help them make use of online resources,” Eric Frederick, Michigan’s chief connectivity officer told Cord Cutters News via email.
Frederick said that by the time the state is “allocating funds to connect CAIs, connections to unserved and underserved locations will already be funded.” As a result, Frederick said there will be any “trade-off” or “need to re-route funds like the CAGW suggests there would be.”
The group argues that these entities shouldn’t be considered CAIs when BEAD guidance suggests that funds are intended for “[organizations] that facilitate greater use of broadband service by vulnerable populations, including low-income individuals, unemployed individuals, and aged individuals.”
“The misuse of public funds to subsidize private recreational facilities, private zoos, and stadiums amounts to little more than corporate welfare,” Mena said in a post on the CAGW’s website. “Michigan’s unserved communities have the most immediate need for expanded broadband access.”
Of the 24,000 institutions in Michigan listed in the MIHI’s proposal, Frederick said the Department of Labor and Economic Opportunity estimates two-thirds have access to fiber optic connectivity, and “that existing access is reflected” in the draft proposal.
“Only CAIs and the many rural unserved and underserved homes and businesses across the state will be eligible to be connected with BEAD funds,” Frederick said.
MIHI will open a State Challenge Process early next year to ensure that the department develops a “complete and accurate” list of locations eligible for BEAD funding. The process will also eliminate any closed or demolished institutions from the list.
The CAGW wasn’t immediately available for further comment.
Editor’s note: This article has been updated to reflect comments from Michigan’s Department of Labor and Economic Opportunity.