This report is intended to provide an update to the Legislative Finance Committee (LFC) 2019 evaluation "Funding, Oversight, and Coordination of Broadband Programs".
The Evaluation: The LFC 2019 Funding, Oversight, and Coordination of Broadband Programs evaluation analyzed state spending on broadband infrastructure and services and management, oversight, and planning functions. The study found a lack of coordination and oversight and piecemeal implementation had led to inconsistent outcomes and persistent obstacles to expanding broadband in the state. DoIT was identified as the likely lead agency to track funds, coordinate with stakeholders, and ensure accountability. Of the implementation action items highlighted here, DoIT and OBAE have completed two and are making progress on four more.
SUMMARY
During the Covid-19 pandemic, the Department of Information Technology (DoIT) and other entities faced a changing broadband landscape and increased need during closures of schools, government, businesses, and critical health and social service entities. Spurred by the pandemic, DoIT funded emergency connectivity and planning using a $10 million capital outlay appropriation for rural broadband. These projects, as well as the Public Education Department’s and the Public School Facilities Authority’s student connectivity efforts, successfully connected unserved and underserved users to new broadband services.
Further, the 2021 Legislature took action to create new broadband governance through the Broadband Access and Expansion and the Connect New Mexico acts, which created the Office of Broadband Access and Expansion (OBAE), the Connect New Mexico Council, and the connect New Mexico fund. In total, the state has seen an investment of nearly $300 million in state and federal funds for broadband expansion and planning efforts at state agencies, including $100 million appropriated into the connect New Mexico fund, though very little has been spent. Further, four out of five newly added positions for OBAE remain vacant, though hiring is reportedly in progress.
Although only partially staffed as of September 2022, OBAE has met deadlines to apply for some new federal broadband grant programs. Still lacking from OBAE is an overarching strategy and plan to spend existing broadband appropriations and coordinate the various public and private broadband expansion efforts undertaken across the state.
BACKGROUND
Recent investments in response to Covid-19 pandemic closures have significantly improved connectivity in some regions of the state, but New Mexico continues to lag behind the United States.
New Mexico still lags behind the United States in connectivity, with 96 percent of the nation reportedly served with broadband speeds of at least 25 megabits download and 3 megabits upload (25/3 Mbps), compared with just 89 percent of New Mexicans.
The Covid-19 pandemic highlighted the need for high-speed, reliable internet access to support employment, telehealth services, and education during pandemic-related closures.
As cited in LFC hearing briefs, a June 2020 strategic plan published by DoIT estimated between 126 thousand and 196 thousand New Mexico locations lacked access to broadband, or roughly 13 to 20 percent of all homes and businesses statewide.
As another example, pandemic-related school closures exacerbated the need for student devices and broadband access from home as classrooms moved online.
Estimates show roughly 131 thousand students in target districts lacked a device at the start of the pandemic, while over 21 thousand lacked a connection and 42.5 thousand lacked both.
The 2019 LFC broadband evaluation pointed out the need for coordination, oversight, and strategies to aggregate demand to meet statewide access goals.
Of the recommendations highlighted in the 2019 evaluation, DoIT and OBAE have completed actions addressing two recommendations and are making progress on four more
FINDINGS
Actions by the Legislature and DoIT Show Promise to Accelerate Broadband Expansion
New governance structures and a recurring funding source should address the lack of oversight and accountability identified by previous LFC reports.
Of five authorized positions for the Office of Broadband Access and Expansion, the director position was only filled in July 2022 and additional hires were made in September 2022.
New Mexico’s labor shortages in critical areas, such as IT network administration and broadband installation and permitting, are being addressed on an ad hoc basis.
Broadband Funding is Ample but Agencies are Slow to Spend
In total, the state has seen nearly $300 million appropriated for broadband among state agencies, including $100 million in the connect New Mexico fund, and more federal funds are expected.
Currently, the connect New Mexico fund has $100 million available to support broadband in New Mexico, a majority of which is still unspent.
In addition to the existing allocations, federal funding continues to play a significant role in broadband planning and expansion across the state.
For FY24, OBAE requested additional personnel to support the operations of the office, including an additional six staff for an increase of $500 thousand.
Since 2018, the amount of monies requested from the state rural universal service broadband program quadrupled.
Funding restrictions on use and eligibility requirements present barriers to local matches and other gap funding.
Federal funding allocated to private entities is difficult to track and progress on those projects is not reported to the OBAE or the Legislature.
Despite Improved Mapping, the State Lacks an Overarching Strategy to Expand Broadband
Lack of a comprehensive statewide broadband plan could result in noncompliance with state legislation, and a misalignment with federal planning requirements may further delay implementation.
New Mexico has paid for two broadband plans since 2019 and will need to develop two more to meet existing state and new federal requirements for broadband and digital equity funding.
New Mexico’s baseline connectivity data, primarily from the June 2020 strategic plan, is being updated by DoIT and OBAE to develop improved maps on statewide broadband access.
New Mexico’s broadband mapping has been ongoing for over 10 years and includes fieldwork to verify connectivity data provided by the FCC, which is not commonly done.
Proposed OBAE performance measures do not follow statutory mandates or LFC recommendations.
Demand aggregation and public-private partnerships remain promising strategies for high-cost areas, leveraging existing infrastructure, and building new middle-mile networks.
Until now, DoIT and other agencies have focused on pricing and purchasing as broadband deployment strategies.
Regional aggregation and collocation hubs are key elements of a robust broadband ecosystem and are critical for middle-mile networks, but few exist in New Mexico.
The statewide education network (SEN) being developed by the Public School Facilities Authority (PSFA) and other entities will operate as an open-access middle-mile network to meet state broadband priorities.
STATUS OF SELECT EVALUATION RECOMMENDATIONS
Authors: Jessica Hitzman, Kathleen Gygi
To read the full evaluation report, visit: https://www.nmlegis.gov/Entity/LFC/Documents/Program_Evaluation_Reports/2022%20Broadband%20Progress%20Report.pdf
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