The Shapiro administration confirmed Wednesday that the federal government has backed away from a threat to withhold more than $700 million in broadband expansion funding, ending a standoff over Pennsylvania’s labor law that had put the project’s future in doubt.
A spokesperson for the state’s Department of Community and Economic Development said the delay was “unfortunate” but added that the administration refused to abandon its commitment to worker protections. “The Shapiro administration insisted on standing up for workers,” the spokesperson said, without detailing the specific labor-law provisions that federal officials had challenged.
The resolution means Pennsylvania now enters a six-month window to finalize contracts with the internet service providers that will receive the funding. Those companies, once under contract, have four years to deliver broadband to roughly 130,000 homes and businesses that remain unconnected.
The scope of the current gap in Pennsylvania’s broadband coverage is significant. The locations targeted by the funding represent some of the last addresses in the state without access to high-speed internet. Most of the new connections will use fiber-optic cable, a technology analysts consider the fastest and most reliable method of delivering broadband.
The dispute had centered on whether Pennsylvania’s prevailing-wage requirements for publicly funded construction projects applied to the broadband buildout — a question that pitted the Shapiro administration’s labor stance against federal officials’ interpretation of the program’s rules. The specific terms of the resolution were not disclosed, and the DCED spokesperson did not say whether the state agreed to any adjustments or whether the federal government simply dropped its objection.
The reversal returns Pennsylvania’s broadband program to the trajectory of other states that have moved forward with similar federally funded expansions. The funding is part of a broader federal effort to close the digital divide in rural America, where the economics of running fiber to widely spaced homes have historically made private investment unviable without public subsidy.
The Associated Press contributed reporting.