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Why Puerto Ricans are still struggling to get online

Internet connectivity remains a weak link for the disaster-wracked U.S. territory Puerto Rico, and some experts fear a new tranche of Federal Communications Commission subsidies set aside just for the island might not help the people most in need of a broadband connection.

Why it matters: Puerto Rico is locked out of most federal funding available to U.S. states to help expand internet service. The island risks being left behind as carriers expand and upgrade high-speed internet networks elsewhere, even as infrastructure-damaging tropical storms come faster and harder and the pandemic makes broadband even more of a must-have.

Driving the news: President Trump Friday announced a plan for $12 billion in aid to the island to rebuild its power systems and lay the foundation for a revival of its once-thriving pharmaceutical manufacturing business. But Puerto Rico has broader infrastructure needs.

Where it stands: The FCC is in the process of reviewing applications from companies vying for some $505 million in subsidies to be used over the next decade to build out broadband service in Puerto Rico, in a program called Uniendo a Puerto Rico.

  • Puerto Rico's communications networks, already spotty in many areas, sustained major damage from Hurricane Maria in 2017.
  • Telecom providers have worked to shore up infrastructure since, and networks proved more resilient against a series of earthquakes this year, facing less widespread outages and going down for a shorter period than they did after Maria, Sandra Torres López, president of the Puerto Rico Telecommunications Regulatory Board, told Axios.
  • But many people in Puerto Rico still have limited or no internet access, and building out networks is a challenge on the mountainous island.

The coronavirus pandemic has drawn Puerto Rico's connectivity woes in sharper relief, limiting possibilities for remote work, learning and medical care.

  • "My wife is a teacher and she has 22 students in her classroom. Only 12 children have [internet] service; the other 10 don't have access," Ernesto Irizarry Salvá, mayor of the town of Utuado, told Axios. "And those kids live in Caguana ... one of the neighborhoods with more access to the internet. These are American children that do not have access to anything in this pandemic."

The catch: Other parts of the U.S. can tap federal funds to close the connectivity gap, and the Trump administration has placed special emphasis on getting more of rural America online.

  • Yet Puerto Rico, despite much of the island being heavily rural, is either disadvantaged in or outright excluded from most federal rural broadband subsidy programs.
  • One reason: Puerto Rico's small size means most areas are too close to the capital city of San Juan to qualify as rural under the programs.

The FCC's Uniendo a Puerto Rico fund, established in the wake of Hurricane Maria, is an exception. (Funding also comes to Puerto Rico via the Departments of Agriculture and Housing and Urban Development, but would-be recipients tell Axios the USDA funds are hard to qualify for, while HUD grants can take ages to be approved and disbursed.)

Yes, but: Some parties worry the end result will be more subsidies for major providers that have operated in Puerto Rico for years without delivering the reliable, fast, widely available and resilient networks that are badly needed on the island.

  • Blackburn, a Puerto Rico-based firm that sells wholesale network access and other telecom services in Latin America, is one party pitching the FCC on an alternative route.
  • It was initially deemed ineligible to compete for Uniendo a Puerto Rico funds because, the company says, it didn't have an existing form on file with the FCC detailing consumer broadband coverage.
  • Blackburn says that with FCC funding, it could build a network delivering 110 Mbps broadband to Puerto Rican consumers via fixed wireless connections. Its petition for the FCC to reconsider its eligibility is currently pending alongside other companies' applications to vie for subsidies.

What's next: The FCC will select winning bidders for the Uniendo a Puerto Rico funds through an auction process. Then it will be tasked with making sure the money is put to its best use.

  • "The rules we adopted last year for the Uniendo a Puerto Rico fund contain oversight, reporting, and accountability measures designed to make sure providers who benefit from the Fund live up to their public interest obligations," FCC Commissioner Geoffrey Starks, a Democrat who hosted a field hearing in February on connectivity challenges in Puerto Rico, told Axios via email.
  • "But we have to actually enforce those rules and impose real consequences for violations — something this commission has not always done. I’ll be carefully monitoring that oversight process to make sure these badly needed funds are spent effectively and efficiently."

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