The Office of Regulatory Staff — which assembled a broadband map to determine where broadband is located and where it's lacking in the state amid the pandemic — estimates $610 million spent over five years of private and public investment would be needed to extend wired high-speed internet to every household in the state.
In a presentation Tuesday to Accelerate SC, Gov. Henry McMaster's committee tasked with making recommendations on how to spend federal COVID-19 relief money, ORS said more than 189,000 housing units in the state are without broadband access, even after investments made last year with CARES Act dollars.
The need for broadband service was brought to light by the COVID-19 pandemic as students were forced to learn remotely, people worked from home and doctors relied more on telehealth appointments in order to slow the spread of the coronavirus.
ORS estimates 401,185 South Carolinians don’t have access to broadband internet at speeds fast enough to have a telehealth appointment or stream a video for a class.
The office proposed the state invest $407 million with the private sector kicking in nearly $203 million to carry out broadband projects around South Carolina. Under the proposal, the state would kick in a higher percentage of costs for projects in rural areas.
ORS also proposed spending $28.9 million to help with digital literacy campaign.
The total of $639 million is down from the $800 million initially estimated last year by a broadband mapping expert who now runs ORS’ broadband office. The amount also follows the $50 million in broadband projects carried out since last year, and $30 million in planned investments to take place between now and October 2022 in rural counties.
The updated estimate comes as lawmakers this fall are expected to determine how to spend all or part of $2.5 billion in federal COVID relief money sent to the state through the American Rescue Plan Act. Among the eligible uses is expanding broadband.
Lawmakers have signaled they are prepared to use a portion of those federal dollars on broadband expansion.
“I believe it’s a high priority for everyone,” said state Sen. Thomas Alexander, R- Oconee, who will chair a state Senate Finance subcommittee on how to invest the COVID relief money. “To bring access to broadband cuts across everything from the mountains, to the midlands to the sea ... to me it’s part of our infrastructure. Knowing the past support for expanding broadband by the General Assembly, I’m confident it will continue to be a high priority for us going forward.”
In the 2021-22 budget, lawmakers included $10 million to finish out remaining broadband work started with CARES Act money last year. The General Assembly also allocated an additional $3 million to ORS to run a broadband office.
The work ahead
ORS Executive Director Nanette Edwards said she agreed state support for broadband projects should be distributed in tranches as additional pots of money could become available and to adjust changes in costs in labor and materials, especially as the rest of the country looks to expand broadband at the same time.
“We’re all working at the same time. That’s going to create such a market demand that it may make it difficult for our internet service providers, our broadband service providers to obtain fiber at the same price they did today,” Edwards said.
The $639 million estimate also balloons to $1.4 billion when including the cost of extending broadband to every structure and the cost of operating the service as well. Operating costs, however, would be collected by companies through fees from customers connecting to the service, said Jim Stritzinger, director of ORS’ Broadband Office, which will help coordinate broadband projects around the state.
“So that’s our job, is to get them over that threshold of building the infrastructure and then we’re counting on them to survive on monthly revenue that they would generate from an individual home,” Stritzinger said.
Last year, ORS used CARES Act dollars to help pay for $50 million worth of broadband projects through a 50% cost-share program with internet service providers.
The Federal Communications Commission has allocated $121 million to South Carolina to help internet providers expand broadband service in the state over 10 years.
ORS also recently approved spending $30 million on rural broadband projects, money which will be matched by internet providers. Those projects were awarded to 16 telephone co-operatives and cable and internet providers among other companies to complete work by October 2022 to bring access to more than 23,000 households in 22 counties, including Marion, Bamberg, Beaufort, Georgetown and Orangeburg counties.
“Orangeburg is a completely different place 18 months from now,” Stritzinger said.
© 2021 The State (Columbia, S.C.). Distributed by Tribune Content Agency, LLC.
