Pennsylvania can move ahead with spending more than $700 million to expand high-speed internet in rural areas after federal officials backed away from a threat to withhold the money over a dispute about how workers should be classified under Pennsylvania’s prevailing wage law, according to the Associated Press report. The reversal removes what officials and advocates described as a potential roadblock to connecting roughly 130,000 Pennsylvania homes and businesses that still cannot get broadband.
The timing matters because the state has a six-month window to sign contracts with the companies and other organizations that will receive funding, and those providers must deliver service within four years, the report said. A spokesperson for the Pennsylvania Department of Community and Economic Development described the federal delay as “unfortunate” while saying the Shapiro administration insisted on “standing up for workers,” according to the statement cited by the AP.
The broadband program’s design relies largely on fiber-optic upgrades, which are widely considered the fastest and most reliable internet technology, the report said. However, the federal program includes satellite as an alternative: as a result of changes linked to the Trump administration, almost one-quarter of eligible locations are expected to receive satellite service, which is cheaper to install but often more expensive to subscribe to, the report said. The report added that satellite service may also face limits in meeting future demands for faster speeds as technology evolves.
The funding uncertainty began after Pennsylvania submitted its final spending plan to the federal government last September, the AP report said. A long-running dispute over prevailing-wage rules for broadband construction kept the grant status in limbo, because the state’s labor department held that workers installing fiber-optic cable should be classified as “electric lineman,” the report said.
Verizon and the Broadband Communications Association of Pennsylvania, an industry group representing internet service providers, sought for years to reverse that classification, arguing in court that it did not accurately reflect the work and unnecessarily drove up costs, according to the AP report. In a December email, the report said a federal official told Brandon Carson—executive director of the state Broadband Development Authority—that the federal agency wanted “assurances” that Pennsylvania would apply “appropriate” worker classifications, based on documents obtained by Spotlight PA under Pennsylvania’s Right-to-Know law.
The report said a grant amendment in early 2026 reflected the same concern by providing that funding would not be released until the federal government deemed the worker classifications “reasonable.” But in late April, the report said, the federal government removed the “requirement for accurate wage and worker classifications” from Pennsylvania’s funding agreement, and the National Telecommunications and Information Administration did not respond to questions about why the condition was removed.
With the prevailing wage issue resolved, Pennsylvania can move to the next stage—contracting with the grant recipients—after which they have four years to make service available, the AP report said. Still, the rollout could face other friction points, including the pace of permitting at the state and local levels, the report said.
A memo obtained by the Benton Institute for Broadband & Society, a public-interest group, indicated continuing federal concern that permitting could slow broadband deployment, the report said. The memo said states must ensure that broadband-related permits are processed within 90 days, but the report noted that states may not control decisions made by local governments.
In Pennsylvania, the Broadband Development Authority is working with a special unit in the governor’s office to create a system to manage permits for the program, the report said. The unit was created by Gov. Josh Shapiro through an executive order in 2023 and has worked to fast-track permits for major economic development projects, according to the AP report.
The report also said it was unclear how Pennsylvania would spend about $400 million in leftover funding tied to Trump administration cost-cutting measures and a reduction in the number of eligible locations. After rescinding Biden-era guidance on how states could use that money, federal officials said they would release updated rules in March, but the report said the agency missed the deadline and later said it needed more time to finalize its approach.