Rural Alaska's internet funding is changing hands as an old federal program ends

The federal money that keeps phones ringing and internet flowing in some of Alaska's most remote places is changing hands — and the checks posted last week are among the last of their kind.

Three Alaska telephone cooperatives drew a combined $14.86 million in federal support on Friday: $9.7 million to Matanuska Telecom Association in Palmer, $3.3 million to Copper Valley Telephone in Valdez, and $1.8 million to Cordova Telecom. None of it has to be paid back. The money comes from a decades-old program that subsidizes phone and internet service in rural communities the market alone can't afford to wire — places too spread out, too far from everything, for a company to profit by serving them.

But the program paying these co-ops, called the Alaska Plan, is ending this year. It's being replaced by a bigger one: the Alaska Connect Fund, which starts in 2029 and will put $107.6 million a year toward rural broadband through 2034. The shift is meant to push faster internet deeper into the state — though the FCC has acknowledged that its target speeds may not be reachable everywhere in Alaska, and says it will fund slower networks where they aren't.

The need is stark. By the FCC's own count, about a fifth of Alaska's homes and businesses still lack basic broadband, and an estimated 51,000 Alaskans are stuck on 3G service or worse. The agency also credited the old Alaska Plan with a real gain, though — expanding 4G coverage in the areas it supported from around 33,000 Alaskans in 2017 to 98,000 today.

The three co-ops are also sitting on about $59.9 million in recent U.S. Department of Agriculture broadband grants, led by $25 million to Cordova. One of them has had trouble with the outgoing program: last November, federal regulators ordered Copper Valley to return about $1.5 million in support over how it had accounted for network services bought from an affiliated company.