Nevada takes back $52 million for rural broadband amid fears of missed spending deadline

Nevada has pulled $52 million in pandemic relief funds aimed at improving broadband access in rural areas as a federal deadline looms, a blow to efforts to install high-speed internet statewide.

There are about three months left until the state must spend its $2.7 billion in pandemic relief funds, and Stimulus Inc., a contractor working on the broadband expansion, determined it would be unable to complete certain connections in the Pahrump area by that deadline, state lawmakers were told Thursday.

It means that parts of the Pahrump area will not be part of the ongoing buildout of broadband. Additionally, Stimulus was planning for the Pahrump project to serve as a hub to build broadband out elsewhere, so that effort is also in doubt.

The state does not yet know the exact locations that will be considered “unserved,” though northern Pahrump is expected to be particularly impacted.

“This was a decision that was a challenging decision to make,” said Britta Appel, the director of the Governor’s Office of Science, Information and Technology (OSIT), the agency overseeing the project. “It was really based on the totality of the circumstances.”

All pandemic relief funds must be spent by the end of the year — a requirement from the federal government to ensure the money is used — and state officials previously expressed confidence that the broadband dollars would be spent in full.

The pulled funds represent more than a quarter of the more than $200 million in pandemic relief dollars originally designated for broadband expansion. The $52 million has been redirected to multiple programs including supporting mental health care in jails, a state program to combat food insecurity and the state’s efforts to increase multifamily housing development.

Rural areas in Nevada (and across the country ) have long struggled with high-speed internet access, lagging behind urban centers.

Nevada has engaged in a yearslong effort to right the ship, but it has been tumultuous. A significant portion of the funding is coming from the 2021 Biden-era Broadband Equity, Access, and Deployment (BEAD) program. The Trump administration earlier this year significantly reduced Nevada’s slice of the project.

Because of the complicated nature of the state’s efforts — which relies on multiple funding sources and has faced bumps in the road, such as sudden federal rescissions of funds — Appel said it’s unclear when and how these areas might see broadband buildout.

However, state officials have long expressed confidence that the broadband dollars would be spent on time.

“Are we going to be able to get these projects done by Dec. 31, 2026? The answer is yes,” then-OSIT Director Brian Mitchell said last October. In April, Appel told lawmakers that “I have confidence in this, as far as its ability to get done.”

At Thursday’s meeting of the state’s Interim Finance Committee — a panel of lawmakers that makes funding decisions when the Legislature is not in session — Assm. Howard Watts (D-Las Vegas) criticized that change in tune from state leadership.

“Part of this frustration is aimed at OSIT, and particularly at previous leadership that I think downplayed the risks of us ending up in this exact situation,” he said.

But warning signs were flashing a few months ago.

During the committee’s August meeting, Nathan Whittacre, the CEO of Stimulus, hinted that some parts of the project would not finish in time. There had been delays in securing utility poles because of fires in Washington, and a new requirement for a franchise agreement delayed the project for about one month.

Stimulus had also bid for certain BEAD funding with the understanding that the Pahrump project would serve as a hub to expand broadband to nearby rural areas. The company is in the process of reviewing those bids, Appel said.

There is also an opportunity for the Pahrump region to receive money as part of a second round of BEAD funding allocations, Appel said, but there’s no guarantee that this will happen.

“This has been clear as mud,” Watts said. “It’s again very frustrating because we know that there’s going to be impacts to broadband access to our communities, but we don’t know what they are or when.”

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This story was originally published by The Nevada Independent and distributed through a partnership with The Associated Press.