State of States Focuses on Digital Infrastructure Funding

By Tamara Lowin
Senior Municipal Research Analyst
Van Eck Associates Corporation

As the country prepares for gubernatorial elections this fall, states are demanding access to sustainable broadband solutions.

With 36 gubernatorial elections in the fall of 2022, this year’s State of the State Addresses are particularly influential. Voters want to see that the party in power meets their current needs. This year we have seen that in addition to routine messaging around budgets and jobs, many governors have focused on topics newly prioritized by the pandemic, primarily the need for reliable and affordable broadband service, which appears to be a bipartisan platform.

The nation began to recognize the importance of home internet access at the start of the COVID-19 pandemic when more than 10 million K-12 students were unable to attend distance learning (this number does not include students who could not attend due to a device deficit)1. As the pandemic continued, additional demands for technology arose.

In addition to education, working from home revealed that without sufficient speed, Internet access was unreliable, especially when multiple users were logging on simultaneously. 2020 has also seen internet hackers increase their activity as more services move online. States and local municipalities have seen a significant increase in data breaches, resulting in approximately $18.88 billion in recovery costs and downtime in 2020 alone.2 highlighting the critical need to address cybersecurity. Finally, the increased demand for telecare remains high, especially for remote patients and less mobile patients.

In response to digital infrastructure needs, the federal government has included $65 billion in its infrastructure bill for this company and many governors have highlighted the steps they are taking to spend the sizable subsidy wisely in their speeches. on the state of the state.3 Meeting these needs will not happen quickly. The planning stage involves creating and staffing new departments and planning how to deploy funds. Multiple stakeholders need to agree, including governments, the health insurance industry, internet service providers and municipal bondholders. The execution phase will also be long, as the physical construction of the necessary infrastructure will take time.

While not every state spent time discussing broadband access this year, its importance in every state, regardless of party affiliation, is remarkable. We believe this will increase the likelihood of near-term progress and, importantly, continued momentum regardless of the election results. As an effort that is expected to take years in many states, the likelihood of success is positive for the nation.

Stay tuned as we continue to explore cyber infrastructure and capital developments.

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Originally published by VanEck on April 11, 2022.

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Disclosures

1 Education Week.

2 Comparitech.

3 Federal Department of Commerce.

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