Montana on January 8, 2024, joined a small list of states that have kicked off their broadband challenge process.The state joins Louisiana, Virginia, Kansas and Colorado as this first group of five states that have also already started the process under the Broadband Equity, Access and Deployment grant program for broadband infrastructure.States are able to kick off the process after approval, by the National Telecommunications and Information Administration, of the state’s Volume 1 initial proposal. That <a href="https://ready.net/blog/congratulations-to-delaware-and-montana-for-ntia-approval" target="_blank" rel="noopener noreferrer">was announced on January 2</a>.The eligibility rules for the challenge are determined by the National Telecommunications and Information Administration’s BEAD program, and Montana’s state challenge process is designed to provide stakeholders with the opportunity to challenge the eligibility of locations for funding.Challengers can dispute the data sourced from the National Broadband Map by using relevant and allowable evidence.Here is the timeline that Montana said it is following for the challenge process:<ul><li>January 8, 2024- <a href="https://connectmt.mt.gov/" target="_blank" rel="noopener noreferrer">Post challenge materials</a>, including deduplicated list of locations</li><li>January 12, 2024- Host Deep Dive Challenge Process Webinar</li><li>January 15, 2024- Officially open Portal</li><li>January 26, 2024- Challenge Process Office Hours</li><li>February 14, 2024- Challenge Phase Closes</li></ul>Montana was allocated $628 million in June 2023 as part of the NTIA’s allocation of $42.5 billion in BEAD funds.&nbsp;

The big sky state joins a small list of eligible entities that have kicked off their broadband challenge process.

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Montana begins broadband challenge process

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Applicants seeking a speedy 90-day guide to receiving your BEAD funding should beware: this is not that guide.As far as BEAD is concerned, 90 days just won’t cut it, and such a timeline would expose applicants to two elements that are usually avoided at all costs:&nbsp;enormous cost and&nbsp;enormous risk.&nbsp;These elements exist as a result of several factors, including guidelines and timelines that vary state by state based on requirements set by the&nbsp;<a href="https://broadband.money/broadband-grant-terms/national-telecommunications-and-information-administration">NTIA</a>.&nbsp;That’s according to Lori Adams, vice president of broadband policy and funding strategy for Nokia, who has written a three-part series diving into building&nbsp;<a href="https://www.telecompetitor.com/partnering-for-bead-success/">effective partnerships for BEAD success</a>,&nbsp;<a href="https://www.telecompetitor.com/moving-up-the-timeline-for-procurements-for-bead/">navigating procurement timelines</a> and&nbsp;<a href="https://www.telecompetitor.com/understanding-the-complexities-of-buy-american-vs-build-america-buy-america/">Buy America, Build America</a>.&nbsp;Her advice to applicants is plain and simple: “If you’re going to wait until the state’s application is made public, you’re going to be toast.”&nbsp;“BEAD is unlike any other federal program for broadband that has ever existed,” Adams said. “It’s the enormous costs for each component of the application and time consuming activities required before the application is even submitted.”<figure class="image"><img src="https://storage.googleapis.com/bbm-public-bucket/Diagram_15cc1cf873/Diagram_15cc1cf873.png"></figure>As states are undergoing their processes for defining their project areas, applicants can get ahead by taking the following steps:&nbsp;<h2>Discover your state’s application requirements as set out in Volume I and II initial proposals&nbsp;</h2>Applicants should be sure to familiarize themselves with the Volume I and II initial proposals submitted by their state broadband offices. This, more specifically, means becoming familiar with the application requirements that each state has set in these proposals.&nbsp;Colorado, for example, has five pages of pre-qualification requirements for BEAD applicants,&nbsp;<a href="https://drive.google.com/file/d/1Um_uLrR7IjTcdMbsOdW3QvrNxsskLxnl/view">as outlined in its Volume II initial proposal</a>. Louisiana, for instance,&nbsp;<a href="https://connect.la.gov/media/3gylvrgc/bead-vol-2-final.pdf">has established an extensive pre-qualification process</a> that applicants must complete before even being eligible for the full application process.“There’s commonalities, like each state has a scoring criteria and a process for pre-qualification, but the nuances of each of these vary dramatically state-by-state,” Adams said.&nbsp;<h2>Build relationships with a certified PE, or Professional Engineer, and CPA, or Certified Public Accountant&nbsp;</h2>Applicants will be required to hire both PEs and CPAs, in order to complete the BEAD process, which adds to overall costs but will add additional time to the process.BEAD requires that applicants submit financial audits completed by CPAs to ensure that financial obligations of undertaking the project can be met. PEs, additionally, will be required to submit certification that proposed designs are structurally sound and within budget.&nbsp;It’s also a great time to familiarize yourself with alternative sources of funding, such as&nbsp;<a href="https://broadband.money/blog/everything-broadband-pros-need-to-know-about-performance-bonds">performance bonds</a>.&nbsp; “The PE requirement alone is going to be a barrier to people and they’re not going to realize it,” Adams said. “Most times, you don’t need a PE certification until after the award and this will be a challenge because PEs traditionally don’t sign off on projects until after they’ve developed it.”&nbsp;As a result, applicants are going to need to build a relationship with a PE who can familiarize themselves with the design process enough to be willing to sign off on it.&nbsp;“You’re looking at a one to two-month process for the PE component alone,” Adams said.<figure class="image"><img src="https://storage.googleapis.com/bbm-public-bucket/Quote_1_d98c216408/Quote_1_d98c216408.png"></figure><h2>Begin your local stakeholder engagement journey&nbsp;</h2>Applicants, much like state broadband offices, have specific requirements for&nbsp;<a href="https://ready.net/blog/a-fool-proof-recipe-for-stakeholder-engagement">stakeholder engagement</a>. These include gathering letters of support and gathering insights from ongoing challenge processes to see how states are defining project areas, such as by county or census block.&nbsp;This is incredibly crucial as states seek input about the current providers from local communities to ensure that the applicant that best serves the communities’ needs can be competitive in the process.&nbsp;“If you’ve been going through the challenge process, you have a pretty strong sense of how these areas are defined and can perform some guesstimation to figure out your next steps,” Adams said.&nbsp;Taking this steps solidifies the enormous opportunity that applicants have ahead of them to shape the course of America’s history with broadband as crucial players in the country’s largest (and likely, last) major broadband infrastructure investment. It’s too much risk to allow it to pass by.

If you're waiting for your state's application, you'll be too late.

Discover your state’s application requirements as set out in Volume I and II initial proposals and build relationships with a certified PE, or Professional Engineer, and a CPA, or Certified Public Accountant.

How to complete your BEAD application quickly? You can’t.

Waiting could mean missing out on millions

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The best time to start your BEAD applications is today

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Think you can complete your BEAD application in 90 days? Think again.

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Starting November 1, broadband industry leaders, especially providers, are breathing a collective sigh of relief as NTIA officials have provided a <a href="https://broadbandbreakfast.com/2023/11/ntia-will-allow-alternatives-to-letter-of-credit-for-bead-funding-in-new-guidance/" target="_blank" rel="noopener noreferrer">programmatic waiver</a> providing states and territories with more options to ensure the financial reliability of BEAD grants.BEAD grant recipients, under previous rules, were required to produce a <a href="http://Letter of Credit" target="_blank" rel="noopener noreferrer">Letter of Credit</a> for a 25% of the total award amount from an FDIC-insured bank with a Weiss rating of B- or better, unless specified by BEAD rules. This required putting substantial sums of cash as collateral which often prevented smaller and minority-owned providers from participating.NTIA’s waiver provides numerous changes to the Letter of Credit requirements that aim to enhance access to funding, including allowing states to utilize a <a href="https://broadband.money/broadband-grant-terms/performance-bonds-for-bead-grants" target="_blank" rel="noopener noreferrer">performance bond</a> for the full award amount.Performance bonds are a new chapter for the broadband sector with their full adoption pending the results of a national working group led by the <a href="https://www.nasbp.org/home" target="_blank" rel="noopener noreferrer">National Association of Surety Bond Producers,</a> or NASPB, and <a href="https://surety.org/" target="_blank" rel="noopener noreferrer">Surety and Fidelity Association of America</a>, or SFAA.The working group is expected to release its results in either the first or second quarter of 2024.<div class="raw-html-embed"><img src="https://storage.googleapis.com/bbm-public-bucket/Lo_C_Performance_Bond_4d7bb4ad13/Lo_C_Performance_Bond_4d7bb4ad13.svg" alt="Performance Bonds"></div><h2>What are performance bonds?</h2>Performance bonds are surety bonds issued by an insurance company or bank that guarantees successful completion of a project. Performance bonds are most commonly used in the construction industry, legal sectors in the form of appeal bonds and some licensed occupations.Performance bonds allow the principal, such as an <a href="https://broadband.money/broadband-grant-terms/isp-or-provider" target="_blank" rel="noopener noreferrer">internet service provider</a>, &nbsp;to be protected for the full cost of the project by the surety, or financial institution, that is providing the performance bond. The obligee, or entity requesting the work such as a municipality or state broadband office, in return, can file a claim against the bond to recover losses from uncompleted work.<h2>What’s the application process for a performance bond?</h2>Providers should first be sure to build relationships with surety providers prior to the application period. Read: This is not the time to procrastinate.Your first step should be to ask your company’s insurance provider to connect you with a surety agent that is familiar with the broadband sector. Having an agent with sector knowledge allows for productive conversations, accurate assessment of the application and its risks and, ultimately, the most beneficial terms for everyone involved.Be sure to take advantage of online resources such as <a href="https://broadband.money/start-broadband-grant-application" target="_blank" rel="noopener noreferrer">Broadband.money</a> and <a href="https://www.beadbonding.com/" target="_blank" rel="noopener noreferrer">BEADbonding.com</a> which contain valuable resources on establishing BEAD-compliant contracts and performance bonds.Applicants will be expected during the submission process to provide business credit information and financial documents for an understanding of the applicant’s financial position. Sureties will also want information about the applicant’s progress on related projects, project schedule and work capacity.Some sureties might expect a pledge of collateral or cash funds depending on the size of the bond and the company’s track record with past projects.Surety agents will guide applicants through the entire underwriting process with bond costs ranging from 2%-6% of the total project cost or, in the case of BEAD, award amount.Approval timelines vary on a case-by-case basis. Smaller bonds, usually under $1 million, can be approved in a matter of hours, especially if the applicant has strong credit and is in a strong financial position. Larger bonds of up to $10 million can take up to two weeks.<h2>How are performance bonds being used in broadband?</h2>The national working group led by the NASPB and SFAA are working with the NTIA, states, ISPs, &nbsp;and other government entities to tailor guidelines for how performance bonds can be utilized with the BEAD program.Among the biggest challenges are reaching a middle ground between what language is acceptable to the NTIA for bonding purposes but also ensuring that bonds are able to still provide value to both applicants and grantors.<h2>What comes next?</h2>Grantors must become aware of their responsibilities surrounding performance bonds, such as awareness of project progress and ensuring that projects are completed in a timely manner. Failure to fill these responsibilities could potentially result in a bond being unable to be called upon.Applicants must become familiar with performance bonds and take preliminary steps to take advantage of them as soon as they are available. This includes being aware of their benefits, such as greater access to capital and diversity among applicants, and also a stronger assurance that the work will be done.Applicants should be sure to tap into numerous resources available from the broadband community, such as <a href="https://broadband.money/" target="_blank" rel="noopener noreferrer">Broadband.money</a> and <a href="http://broadband.io" target="_blank" rel="noopener noreferrer">Broadband.io</a>.

A crash course on performance bonds for America’s leading broadband pros

Here’s what you need to know about performance bonds today.

Everything broadband pros need to know about performance bonds

Everything you need to know today about performance bonds

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Performance bonds 101 for Broadband Pros

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What Every Broadband Pro Should Know about Performance Bonds

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Recapping the 2023 broadband year in review centers on the Broadband Equity, Access and Deployment program, the $42.5 billion last-mile broadband program under the Infrastructure Investment and Jobs Act.Among the topics that will be discussed in the broadband community in the <a href="https://www.broadband.io/c/broadband-grant-events/2023-broadband-year-in-review">end-of-year bash</a> on Friday, December 15, 2023, at 1 p.m. ET include the following:1. Broadband Maps and the Evolution to the Data-Driven State Broadband OfficeState broadband offices across the U.S. are now currently finalizing their initial proposals, after nearly a year of back-and-forth with first the Federal Communications Commission and then the National Telecommunications and Information Administration over data about broadband serviceable locations.&nbsp;As part of the BEAD program, state broadband offices need to ensure that maps identify all unserved locations (those that do not receive 25 Mbps down by 3 Mbps up) as well as all underserved locations, or those that do not receive 100 Mbps by 20 Mbps.Particularly in the early months of 2023, state broadband offices began shifting from a narrow focus on mapping to a more wholistic approach where smart, data-driven states found the need to ingest, analyze and process far more information than merely broadband locations on a map from the FCC.&nbsp;2. Allocation Awards to State Broadband OfficesMidway through the year, in a White House ceremony on June 26, 2023, President Joe Biden <a href="https://ready.net/state-broadband-office-resources/list-ntia-bead-broadband-grant-allocations">announced the award amount to states</a> under the BEAD program. Texas and California received the largest awards, with $3.3 billion and $1.8 billion, respectively, but 19 states received more than $1 billion each, including Alabama, Georgia, Louisiana, Michigan, Missouri, North Carolina, Texas, Virginia, and Washington.By late November, all 56 states and territories had released their proposals for public comment in their states, a necessary step before being officially submitted to the NTIA by December 27.&nbsp;Louisiana and Virginia were two states whose initial proposals (volume 1) have already been approved by NTIA.&nbsp;In general, Volume 1 details how states will ground-truth broadband coverage data, and approval of the volume by NTIA kicks off the challenge process on states’ broadband availability. Volume 2 outlines states’ plans for administering grant programs with their BEAD funds. That includes provisions like how grant applications will be scored,&nbsp;<a href="https://broadbandbreakfast.com/2023/11/ntia-will-allow-alternatives-to-letter-of-credit-for-bead-funding-in-new-guidance/">financing requirements</a>, and the price at which states will start to consider technology other than the fiber-optic cable favored by the program.States are able to submit volume 1 before volume 2, an effort by the NTIA to get challenge processes started and expedite the program’s process.&nbsp;This is&nbsp;driven by a sense of urgency: State broadband offices have only 365 days to award funds to broadband providers after their post-challenge process proposals are approved by NTIA.3. Middle Mile AwardsOn June 16, NTIA&nbsp;announced $930 million in funding for middle-mile broadband, nearly all of the $1 billion available for such projects under the bipartisan infrastructure law.In all, 35 projects were announced by the Commerce Departments, and these projects will cover 350 counties in 35 states and Puerto Rico. The states receiving the largest funds for these middle mile projects are Alaska, California, Texas, Michigan, New Mexico, Nevada and Kansas.Grants ranged from&nbsp;$2.7 million to $88.8 million, and are expected to deploy more than 12,000 miles of new fiber. Because of what turned out to be a 93 percent match component, awardees contributed an extra $848 million in outside funding to these projects.4. Buy America Rules in Broadband InfrastructureIn August 22, 2023, the U.S. Department of Commerce issued a limited draft waiver for some parts of the "Buy America" rules for BEAD. More significantly, the more worrisome aspects of the rules were resolved by private investment onshore. For example, analysts expressed optimism that Nokia’s announcement of an extensive fiber electronics manufacturing facility in the United States would alleviate concerns about current Buy America requirements for federal investment.As part of the IIJA as passed in November 2021, projects receiving federal funding needed to obtain at least 55 percent of their component by cost in the United States. The proposed waiver preserves that cost requirement for fiber optic cables, but removes the requirements for all electronics equipment used in fiber-optic technologies with the exception of four specific categories of fiber-optic equipment. But for industry onshore announcement, that would have been a concern for broadband builders under BEAD.&nbsp;5. Letter of Credit and Performance BondAfter considerable criticism by industry stakeholders, the NTIA on November 1 released alternatives to the letter of credit requirement for BEAD. Program rules had required that broadband providers produce a letter of credit from a bank for 25 percent of the amount they are awarded. That involved putting the cash up as collateral, which critics have said could prevent small broadband providers from participating.With the NTIA’s new “<a href="https://broadbandusa.ntia.gov/funding-programs/policies-waivers/BEAD-Letter-of-Credit-Waiver">conditional programmatic waiver</a>,” states and territories will have other options to ensure the financial reliability of BEAD grants. Those include requiring a&nbsp;<a href="https://broadband.money/broadband-grant-terms/performance-bonds-for-bead-grants">performance bond</a>&nbsp;for the full award, which the awardee only pays out if they fail to meet their build out requirements.&nbsp;The waiver allows states and territories to use completion milestones to lower letter of credit amounts over time, meaning the LOC could decrease from 25 percent of the grant as infrastructure is deployed, freeing up money for grant recipients to use in their BEAD projects. That option can also apply to performance bonds.The agency is also doing away with the 25 percent starting point, allowing the letter to be as low as 10 percent under certain circumstances, as well as accepting letters of credit from credit unions.6. Digital Discrimination and Broadband AffordabilityOne important aspect of the dialogue around BEAD over the past year concerns the importance of digital equity, and the prevention of digital discrimination. In November 2023, the FCC adopted new rules to prevent and eliminate digital discrimination. Following the urging of the NTIA, the FCC adopted a definition of digital discrimination that includes both disparate treatment (intentional discrimination) and disparate impact (unintentional disparities resulting from a company's policies and practices) on protected groups.How will this impact BEAD? It’s not 100 percent certain. But it’s plausible that the rules may enhance participation in BEAD.That’s because of an NTIA clarification that actions in compliance with the requirements of the BEAD Program or other similar federally-funded programs should be considered presumptively lawful under the digital discrimination rules. This means that ISPs are presumed to be in compliance with the new digital discrimination rules as long as they adhere to the program's guidelines.What other broadband issue do you think should be highlighted from 2023?

Recapping the 2023 broadband year in review centers on the Broadband Equity, Access and Deployment program, the $42.5 billion last-mile broadband program under the Infrastructure Investment and Jobs Act.

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The biggest broadband news of 2023? Hint: It's all about BEAD

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Identifying sources of matching funds is a critical component of the Broadband Equity, Access and Deployment process. Over the past 12 months, the Fiber Broadband Association “Where’s The Funding?” series has been designed to equip applicants with the tools and information they need to satisfy BEAD’s matching contribution requirements under the signature National Telecommunications and Information Administration broadband funding program.BEAD matching – JanuaryReady CEO&nbsp;Jase Wilson and Chief Operating Officer&nbsp;Mike Faloon gave an introduction to the BEAD financing requirements. The program requires applicants to match 25% of their project costs, either with their own capital or outside loans or investments. Crucially, those have to be secured before an application is submitted.“It’s going to be the hardest part of your grant journey,” Wilson said.BEAD matching – FebruaryThe BEAD program requires 25% matching funds, but applicants that secure more will have better chances of winning grants, said&nbsp;Evan Feinman, director of the BEAD program at NTIA.Those matching funds can come from municipalities with remaining money from other federal programs like the American Rescue Plan Act and the Treasury Department’s Capital Projects Fund.Another source of matching funds the NTIA will accept are in-kind donations, he said. That can include rights of way, pole access, and labor, among other things.Sources of capital – MarchDavid Hartin, president of the telecom investor ITC Holding Company, highlighted mezzanine debt and issuing convertible notes as potential ways of securing match funding for broadband grant applicants.Mezzanine debt offers repayment plans tailored to the borrower’s revenue. Convertible notes are a type of bond that can function like both debt and equity, as they can be converted into stock in the issuing company or cash of equal value.More sources of capital – AprilNonprofits have more flexibility when providing funds than banks or government offices, said&nbsp;Brian Vo, Chief Investment Officer at Connect Humanity, a nonprofit that finances digital equity projects. He has worked with providers to finance projects with revenue-based repayment plans, for example, in which loan payments are linked purely to how much money the network brings in after being constructed.Impact-focused nonprofits like Connect Humanity can help smaller providers especially, but he noted that even nonprofits will want a partner to be familiar with their financial condition.Navigating the previous Letter of Credit requirement – MayUntil the NTIA issued a waiver for its 25% letter of credit requirement in November 2023, many in the broadband community were worried about this rule. Many of the individuals campaigning for a change to this requirement spoke about this in a special Ask Me Anything session on<a href="https://www.broadband.io/c/broadband-grant-events/ntia-letter-of-credit-discussion">&nbsp;November 9, 2023</a>. The updated guidance allows states to use performance bonds, which providers only pay out if the project fails, and milestone-based repayment plans to ensure the financial viability of a project.In May, WTF guest&nbsp;Elizabeth Bowles, president of Aristotle ISP, flagged the restrictive nature of the original rules. A 25% letter of credit would tie up too much cash up front for smaller companies to compete, she said.&nbsp;Getting matching funds – JuneChris Perlitz, managing director at Municipal Capital Markets Group, has been contemplating using grant anticipation notes from local banks to help finance BEAD projects. That’s short-term financing issued to borrowers expecting to receive a government grant.The funds can be placed in a trust account and used as collateral for letter of credit requirements, he said.Municipal bonds – JulyMunicipal bonds are debt issued by a city or town. Investors in such bonds are exempt from federal taxes and from most state taxes. They provide a low capital cost and can help grant-funded projects get off the ground, Perlitz said in his second WTF appearance.It will be important for providers to start building partnerships with municipalities early in the grant process, he said.Matching for rural electric co-ops – AugustLocal governments can assist BEAD applicants by putting up other federal money as matching funds, said&nbsp;Darren Farnan, CEO Missouri-based electric co-op United Fiber. County officials helped his co-op secure other state broadband grants by signing on to United Fiber’s applications and providing ARPA money toward the matching requirement.For co-ops specifically, the nonprofit model can allow networks in more densely populated areas to help subsidize the most remote places that for-profit companies won’t build to, he said.Challenges of matching funds – SeptemberConnect Humanity founder&nbsp;Jochai Ben-Avie discussed some of the challenges for rural providers looking to get matching funds. The high cost of serving rural areas is a significant barrier to getting that capital, he said, but small providers can work with electric co-ops to get pole access as an in-kind donation toward the 25% requirement.The NTIA also left open the possibility of waiving the match down to zero in high-cost areas, which a number of states are attempting to take the agency up on in theory initial proposals.Opportunities from securing matching grants – OctoberIn October,&nbsp;Jack Lawrence, chief financial officer of Amperage Infrastructure Corporation, spoke to the issue of how matching funds unlocks major broadband grants. Prior to Amperage, Jack was vice president at Priority Technology Holdings and oversaw the Priority Technology Ventures portfolio. Prior to joining Priority, he was CFO and CAO of Finxera, Inc., which was acquired by Priority.Tribal matching funds – NovemberTribal Ready CFO&nbsp;Joe Valandra and American Indian law practitioner&nbsp;Jennifer Weddle discussed some of the specific barriers and opportunities Tribal communities face in getting funding for BEAD projects.The BEAD matching requirement can be waived for Tribal projects, and Tribes need to be assertive about requesting those waivers from States, Weddle said.Tribes can also use any ARPA funds they have yet to spend if matches are necessary. &nbsp;

Highlights and takeaways from Fiber Broadband Association’s Where’s the Funding (WTF) series exploring sources of matching funds for NTIA's BEAD

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Here are some of the best WTF highlights!

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Jake Neenan

There are more than 7 million Americans who are members of either an American Indian or Alaska Native tribe. These members, like countless other Americans across the country, cannot ethically – or indeed legally – be overlooked in states’ efforts to expand access to affordable, quality Internet.During a recent appearance on <a href="https://www.broadband.io/c/broadband-grant-events/ask-me-anything-with-adam-geisler" target="_blank" rel="noopener noreferrer">Ask Me Anything</a>, <a href="https://ready.net/blog/ntias-tribal-division-chief-adam-geisler-joins-native-owned-tribal-ready" target="_blank" rel="noopener noreferrer">Adam Geisler</a>, president and chief operating officer of Tribal Ready and a member of the La Jolla Band of Luiseno Indians, explained that his professional career has placed him at the intersection of Tribes and the federal government, including at the National Telecommunications Information Administration (NTIA) and U.S. Department of Commerce.“We see ourselves as members of our traditional homelands, peoples, and nations but we’re also absolutely Americans and care about the success of this country, our neighbors and people around us,” Geisler said. “It’s important to not lose sight that Native American history is not a one-size-fits all and, as a result, the way that folks are seen by the federal government is different because of that region, history, interactions and that tribe’s past.”Geisler offered some valuable insights for partnering with Tribes that have been compiled into simple do’s and don’ts of building tribal partnerships.Do: Remember that if you’ve met one tribe, you’ve only met one tribeNative Americans are not a monolith. There’s a wide array of differences among Tribes, much like among U.S. states, that encompass areas, such as politics, culture, socioeconomic status and interactions with non-Native organizations.Everyone from California, for instance, will have their own unique experience of being a Californian. A person from Northern or Central California will have a different experience than someone who lives in Southern California.On a more granular level, this would mean that someone from the San Fernando Valley would have a different experience from someone from San Diego. All of these people and their experiences are meanwhile uniquely Californian.Don’t: Attempt to over-relate or make assumptionsIf you have to ask, it’s not appropriate to ask if they’re familiar with the mythical Native ancestor that someone swore you had and don’t try to compare your family’s origin story.Don’t assume that because one tribe operates in a certain manner that others will do the same.Be normal and keep the focus on what’s important: getting families and communities connected to broadband.Do: Break bread and ask plenty of questions about a tribe’s history and backgroundWhatever you do, don’t just start by jumping straight into work. Get to know the person on the other side of the table as a person, share a meal, ask about their families and what they’re passionate about.A great starting point can be the simple question, such as: What do you refer to yourselves as? Some communities prefer Native, Tribal, Native American, Indian or something entirely different. It will vary by each group, but all will appreciate your curiosity and respect by asking.Tribes are often eager to share about their unique culture, history and background. This commonly takes place early in the conversation as these discussions can provide crucial context for both parties seeking an effective understanding and partnership.<a href="https://tribalready.com/our-team/" target="_blank" rel="noopener noreferrer">Joe Valandra</a>, CEO of Tribal Ready, is known to spend a considerable amount of time providing historical background and answering questions about his tribe, Sicangua Lakota, and broader Native history.Don’t: Ask about their federal or state recognition statusAt the time of writing this article, there are 574 federally-recognized Tribes, but this number is expected to grow. Tribes, nonetheless, operate under tribal sovereignty, or the ability to govern people, land and processes in a manner that best serves their nations and tribal governments."The list of federally recognized Tribes continues to grow as time, policy and politics evolves on this issue,” Geisler said. “Don’t ask if they’re federally or state recognized because there’s nuances between each tribe’s relationship to the federal government varying by numerous factors, including treaty rights and other past agreements.”Do: Recognize the importance of tribal and data sovereignty and challenges faced by Native communitiesTribes are considered sovereign nations within the borders of the United States and, as a result, possess the right to govern their communities and data. Both of these issues remain incredibly important to Tribes after years of both of these concepts being neglected by the U.S. federal government throughout history.“Tribal Ready is helping Tribes evaluate those solutions, manage data and ensure that people aren’t monetizing or taking info away from these communities without their knowledge, permission or, in many instances, compensation,” Geisler said.Tribes, much like states and local communities, face similar challenges with deploying broadband whether it’s lack of accurate data or decades of underinvestment. Much like in other communities across the United States, many tribal leaders were thrust into the sector as their communities lacked adequate internet speeds to access educational and healthcare opportunities online.Geisler notes that Tribes are considering numerous approaches to close their digital divide. “Some want to fully own, build and operate ISPs, others want to look for someone other than their Tier One providers and are willing to build and others want to continue to work with their Tier One and subsidize, build and pay for the service,” Geisler said.Lastly, it’s important to remember that this article should be the beginning of your journey exploring tribal partnerships, not the end, and as such, aims to reach the broad points of this topic.&nbsp;

Interested in collaborating with Tribes? Here’s the place to start.

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Some Dos and Don'ts of Tribal Partnerships 

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There’s big changes coming for BEAD applicants after recent announcements from the National Telecommunications and Information Administration (NTIA) on its controversial Letter of Credit requirement.&nbsp;Applicants, under new NTIA guidelines, will be eligible for a&nbsp;<a href="https://broadbandusa.ntia.gov/funding-programs/policies-waivers/BEAD-Letter-of-Credit-Waiver?_gl=1*usoi1u*_ga*MTUwNjEwMjY0OS4xNjk4ODQ4NDY3*_ga_H50FXLW992*MTY5ODg1NzU3MS4zLjEuMTY5ODg1NzczMy4wLjAuMA..*_ga_55V70TEFYT*MTY5ODg1NzU3MS4zLjEuMTY5ODg1NzczMy4wLjAuMA..&amp;_ga=2.210884693.1559733915.1698848467-1506102649.1698848467">Letter of Credit Waiver&nbsp;</a>and other sources of funding, such as <a href="http://performance bonds." target="_blank" rel="noopener noreferrer">performance bonds</a>. Credit unions are also now able to provide letters of credit according to the new guidelines.&nbsp;“Applicants can waive their letter of credit requirement entirely if their state issues funding on a reimbursable basis,” John Windhausen, president of SHLB Coalition and a member of the Letter of Credit (LOC) Coalition who ushered the change, said. “This, in turn, minimizes the risk to the federal government of losing money, allows applicants to take full advantage of greater flexibility provided by some states and allows for greater competition.”&nbsp;NTIA’s decision to allow credit unions to provide Letters of Credits gives greater flexibility to applicants with limited access to financial institutions. “Credit unions are usually the best equipped and knowledgeable about these small communities,” attorney Phil Macres, who is also a member of the LOC Coalition, said.The Letter of Credit Coalition, a broad coalition of industry experts and organizations, was responsible for pressuring the NTIA to modify the requirement.&nbsp;These experts will be conducting a&nbsp;<a href="https://www.broadband.io/c/broadband-grant-events/ntia-letter-of-credit-discussion">Letter of Credit Discussion&nbsp;</a>&nbsp;on the broadband community on Thursday, November 9 at 12 p.m. ET.&nbsp;<h2>Why’s this important?&nbsp;</h2>Under previous guidelines, applicants were required to obtain a Letter of Credit valued at 25% of the total grant amount from a bank with a Weiss rating of B- or higher. This not only excluded other financial institutions, most notably credit unions, but also tied up enormous amounts of capital limiting opportunity to a smaller pool of applicants.&nbsp;Connect Humanity&nbsp;<a href="https://connecthumanity.fund/why-the-letter-of-credit-requirement-could-sink-bead/">provides a clear example of the requirement’s cost</a>. An applicant seeking to apply for&nbsp; a $7.5 million grant would need to have $4.6 million, or 61 cents per dollar, set aside at all times in order to be approved.&nbsp;“This presented an enormous burden to smaller applicants, minority-owned applicants, women-owned applicants and made many financially prohibited from participation,” Macres said. “It was even a hurdle for some bigger companies who couldn’t afford to just have so much cash on hand.”&nbsp;<h2>What’s next?&nbsp;</h2>Letter of Credit Coalition members are optimistic that modifications to the requirement will spur competition and allow for a larger pool of applicants. This, in turn, means a greater number of projects slated for completion.&nbsp;Windhausen told us that he believes this would allow non-profits and others to be able to qualify for projects serving anchor institutions which are usually less attractive to bigger players.&nbsp;As the financial services sector faces uncertainty, there remains growing concern of the requirement that financial institutions maintain a Weiss credit rating of B- or higher. This especially as some of the country’s largest banks, notably Wells Fargo and Bank of America, fail to meet the standard.&nbsp;To learn more, please be sure to RSVP and attend our Letter of Credit discussion&nbsp;<a href="https://www.broadband.io/c/broadband-grant-events/ntia-letter-of-credit-discussion">here</a>.&nbsp;

There’s big changes coming for BEAD applicants after recent announcements from the National Telecommunications and Information Administration (NTIA) on its controversial Letter of Credit requirement. 

Applicants, under new NTIA guidelines, will be eligible for a Letter of Credit Waiver and other sources of funding, such as performance bonds. Credit unions are also now able to provide letters of credit according to the new guidelines. 

Learn More about BEAD’s Letter of Credit Requirement Changes

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Want to Learn More about BEAD’s Letter of Credit Requirement Changes? Read this. 

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Leonard Robinson

 Communications Manager

Twelve states – Delaware, Kansas, Louisiana, Montana, Nebraska, Ohio, Pennsylvania, Tennessee, Utah, Vermont, Virginia, and Wyoming – have released volume one of their BEAD initial proposals to the National Telecommunications and Information Administration.Five – Nebraska, Pennsylvania, Tennessee, Utah, and Wyoming – are still open for public comment.The NTIA requires states to submit their initial proposals in two volumes. Both volumes are due to the NTIA by December 27, 2023, 180 days after the formal allocation of BEAD funds on June 30.&nbsp;The first volume must include four pieces of information: existing broadband funding efforts, unserved and underserved locations, anchor institution definitions, and the state’s challenge process.The challenge process requirement calls for states to detail how they will accept and process challenges to location classifications and, crucially, data on broadband coverage. These state challenge processes are separate from the ongoing challenge process to the FCC’s broadband map and are mandatory for the disbursement of BEAD funds.States have access to the NTIA’s model challenge process to help them in this effort, and the agency encourages states to adopt the model process in full. All 12 states that have submitted volume one are heavily basing their challenge processes on the model.The model process outlines in detail a 90-day process with four phases. The NTIA allows this process to span up to 120 days, but states have not elected so far to take that extra time.<h3>Process begins with state broadband offices publishing a list of locations deemed eligible</h3>The process begins with state broadband offices publishing locations deemed eligible for BEAD funding by existing map data. These locations also have to be provided in volume one of the initial proposal.Challenge and rebuttal phases follow, in which challengers – limited to nonprofits, local and tribal governments, and service providers – submit challenges to the state on that eligibility, and service providers have a chance to rebut that challenge and prove their coverage is correctly recorded. In the final phase, broadband offices make final determinations on eligibility by sustaining or rejecting the challenges they’ve received.Acceptable challenge and rebuttal evidence include rigorous speed tests documenting low speeds or high latency and written documents from service providers informing customers that a specific service is not available in their area. The full scope of evidentiary standards for each challenge type can be found in the text of the model process, available for download&nbsp;<a href="https://www.internet4all.gov/bead-challenge-process-policy">here</a>.The model process outlines two optional provisions on how states can interpret FCC map data and make eligibility changes ahead of their challenge process.Most states are adopting at least one, electing to either consider locations the FCC marks as “served” – having broadband in excess of 100 Mbps upload and 20 Mbps download – as being “underserved” if the only technology available is DSL or to check coverage data against speed tests ahead of accepting official challenges.<h3>Vermont, Delaware and Ohio have added additional modifications to their proposals</h3>Only three are adding additional modifications: Vermont, Delaware and Ohio.&nbsp;All three states are modifying the model process to treat locations the FCC marks as served as being underserved if the only technology available in the area is fixed wireless cellular service. They cite the fact that cell speeds drop significantly with distance from a tower and can be throttled when networks are congested.Vermont is also adding a provision to treat served locations on the FCC map as “unserved” if there is evidence that providers in the area impose an “unreasonable capacity allowance (‘data cap’) on the consumer.” The state did not specify its threshold for determining unreasonableness.The model process also includes optional challenge types: MDU (multiple dwelling unit) and area challenges. These require providers to prove service for entire buildings or geographic areas if a certain number of challenges within that building or area are submitted.These modules are also popular with states who have released volume one, with all states except Montana and Utah explicitly adopting them.The existing broadband funding requirement calls for states to identify other existing broadband subsidy efforts within their borders. This includes both federal efforts like the Rural Digital Opportunity Fund and state-funded initiatives.Meeting the community anchor institutions requirement involves identifying anchor institutions currently receiving less than 1 Gbps upload and download service. It also asks states to classify which organizations will get anchor institution status. This typically includes schools, libraries, and healthcare centers, but states can add other entities if they provide justification in their proposals.Five-year action plans are due 270 after states received initial planning grants. When states received these grants varies, but the last allocation was made on December 23, 2022.

Delaware, Kansas, Louisiana, Montana, Nebraska, Ohio, Pennsylvania, Tennessee, Utah, Vermont, Virginia, and Wyoming have released their initial proposals.

Which states have released volume I of their Bead initial proposals

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12 States Have Filed Volume 1 of BEAD Initial Proposals 

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State broadband offices are beginning to prepare in earnest for the challenge process under the Broadband Equity, Access and Deployment program. Now that guidance for the process has been provided by the federal government, states are now seeking to iron out the complexities of this process.As they do so, these state broadband offices should be aware of the opportunity to conduct an “area challenge” of service provider availability.&nbsp;Under the National Telecommunications and Information Administration’s&nbsp;<a href="https://www.internet4all.gov/bead-challenge-process-policy">model challenge process</a> – published on June 28, 2023, as a template for states – if six or more locations in a census block group allege the same technology from the same provider is not available or slower than state data indicates, an “area challenge” is initiated. This designates the entire block group as challenged.Normally, the challenger must provide evidence that their service is not available or worse than advertised in order to successfully change their location’s status in the state’s data. But under area challenges – for those states that make use of it – once the challenger provides sufficient evidence, the burden of proof switches to the provider, who must prove that it provides the reported service to the entire census block group.<h4>Detailed guidance on permissible challengers and allowable challenges</h4>The NTIA made clear in its June 28 guidance that challenges will be accepted from permissible challengers, which is limited to units of local and tribal government, nonprofit organizations and broadband service providers, to the state through a state-maintained online portal. The guidance includes the “BEAD Challenge Process Policy Notice” as well as the “BEAD Model Challenge Process”Those challenges that meet a minimum level of evidence must be rebutted within the rebuttal period or they will be considered sustained.&nbsp;The NTIA guidance provides a list of allowable challenges, which include identification of community anchor institutions, location eligibility determination, planned service, and enforceable commitments.&nbsp;Additionally, states must detail an approach that “ensures that sufficient opportunity and time is given to all relevant parties to initiate, rebut, and substantiate challenges.” They must also ensure their challenge process is transparent and detail in their plans to, at a minimum, publicly post documentation explaining the challenge process, publicly post all submitted challenges and rebuttals, and host a public-facing website featuring all the documentation.&nbsp;States are required to use the national broadband map as a starting point to identify all eligible locations within the state prior to conducting the challenge process. They may modify locations to reflect data not present in the national broadband map upon NTIA approval. They will not be allowed to add or remove broadband serviceable locations or change the definitions of unserved and underserved from those set in the national broadband map.&nbsp;<h4>Changes from April version of the NTIA guidance</h4>In April, the NTIA released a&nbsp;<a href="https://broadbandbreakfast.com/2023/05/louisiana-works-on-map-challenge-process-as-it-prepares-digital-equity-plan-for-next-week/">proposed BEAD Challenge Process Model</a> which outlined similar guidance with a shorter challenge process window of 90 days. The new guidance provides more detail into the requirements under each step of the challenge process.In particular, among the changes to the April guidance are that states “may rely on CAIs to identify their unmet broadband need. Where SBO capacity is limited, Eligible Entities should focus their efforts on enumerating those CAIs that are currently not served by gigabit broadband.” Additionally, the NTIA added this line: “If a provider claims gigabit service availability for a [community anchor institution] or a unit of local government disputes the CAI status of a location, the CAI may rebut” the challenge.Additionally, the NTIA makes clear that individual broadband users may be able to “submit challenges through their unit of local government or a nonprofit, preferably via a web portal. This unit of local government or nonprofit will then upload the challenges to the state challenge portal, which in turn notifies the broadband provider of the challenge.”Challenge processes must be completed within 120 days of commencement and allow challenges and rebuttals to be submitted for a minimum of 14 days.&nbsp;Upon completion of the challenge process, states must submit to NTIA for review the proposed final classifications of each unserved, underserved, and community anchor institution location.&nbsp;Federal Communications Commission’s “Fabric”The NTIA relies upon the FCC’s National Broadband Map for the allocation of $42.5 billion in federal funds for expanding broadband infrastructure from the Broadband Equity, Access and Deployment Program. The money is being distributed to states based on the coverage available to their residents as recorded in the second version of the FCC map.For states looking to allocate their BEAD funds, a challenge process of their own is not only beneficial, but required by the NTIA.Challenges submitted to states will be used to create state-specific maps which each will use to plan BEAD projects. States have until December 27, 2023, to submit the first volume of their initial proposals, which must detail this challenge process.States have the opportunity to create their own challenge processesStates can create their own process from scratch or adopt the NTIA’s model challenge process. Several states have already released their volume one proposals.The area challenge mentioned above is an optional provision in the NTIA’s process that could significantly ease the burden on consumers and states looking to create the most accurate possible broadband maps.Under normal challenge rules, the challenger must provide proof that their service is different – usually worse – than state data suggests. This can involve a number of things, depending on what specifically is being challenged. For example, the service availability, speed, latency, and technology offered at a location, among other things, can all be challenged.A challenger might have to submit screenshots of denied service requests, speed tests, excerpts of their service agreements – again, among other things – to back up their claim. But even if that evidence is enough to uphold the challenge, it only changes the designation of their specific location.But what if an entire swathe of land is incorrectly categorized?&nbsp; By the typical challenge rules, everyone in that area would have to submit their own challenges and prove they were getting worse service than state records show.That’s where the area challenge comes in. As the NTIA notes in the BEAD Challenge Process Policy Notice, “If the challenger determines that an area served by a provider within a census block group should be reclassified as unserved or underserved in step (1), the Eligible Entity may issue an area challenge (i.e., may declare all locations by that provider within the area to be similarly unserved or underserved). All locations in that area enter the “challenged” state. Providers may rebut area challenges for some or all locations within the area.In the “BEAD Model Challenge Process,” the NTIA elucidates that “the broadband office will administer area … challenges…. An area challenge reverses the burden of proof for availability, speed, latency, data caps and technology if a defined number of challenges for a particular category, across all challengers, have been submitted for a provider. Thus, the provider receiving an area challenge… must demonstrate that they are indeed meeting the availability, speed, latency, data cap and technology requirement, respectively, for all (served) locations within the area or all units within an MDU.”This area challenge is optional and states are not required to use it. But for states that do implement the area challenge, it gives states the opportunity to reverse this burden of proof from the challenger to the internet service provider.Under the area challenge rule, if six locations in a census block group submit the same kind of challenge to the same technology from the same provider – six locations challenge DSL speed from one provider, for example, then the&nbsp;provider must prove that they serve the entire census block group as recorded in state data.This would prevent states and communities from having to crowdsource hundreds of challenges in a block group and reverses the burden of proof onto providers, who have the infrastructure to provide network diagrams and conduct performance tests across large areas with network management systems.The Challenge Process CoordinatorOne important tool in managing the challenge process is Ready.net’s&nbsp;<a href="https://ready.net/products/challenge-process-coordinator">Challenge Process Coordinator</a>, which sets the evidentiary standard for NTIA-acceptable and customizable data collection. The Challenge Process Coordinator is customizable for every challenge type, and only allows permissible challengers to create an account and submit challenges.&nbsp;Further, the&nbsp;CPC contains features that enable challengers to submit high quality challenges that meet the NTIA's standard and are easy to adjudicate automatically. This is because the data is not only completely customizable (and deduplicated), but also because gating is automatically applied to only permit locations that are appropriate for the challenge. For example, if provider A's cable is challenged, only locations receiving provider A's cable can be selected for that challenge - not provider B's cable or provider A's fiber.Additionally, the Challenge Process Coordinator breaks down the language into a series of simple questions that easily break down the complex guidance for challengers. This enables them to submit evidence that meets the challenge’s needs without any confusion. The tool also allows for integrated messaging, allowing the state broadband office to meet the messaging requirements for notifying providers when challenged.After the challenge window closes, the data is automatically extracted in the NTIA defined format to submit for final approval. This takes away an otherwise tedious process for the state broadband office. Upon approval from the NTIA, changes are automatically populated to the internal and public facing maps through the synchronized maps deployed for the office.

A guide to the evidentiary standard of the BEAD Challenge Process with an emphasis on the area challenge module for State Broadband Offices.

Piecing the evidence need for the BEAD Challenge Process

An Evidence-Based Challenge Process for State Broadband Offices

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Half-way through the Fiber Broadband Association’s 12-part monthly webinar series, listeners have learned some but not all of the information they need to know about seeking capital for the matching requirement in the $42.5 billion Broadband Equity Access and Deployment program.&nbsp;Director of the BEAD program at the National Telecommunications and Information Administration Evan Feinman <a href="https://broadband.money/events/bead-matching-funds-deep-dive-with-bead-director-evan-feinman">told the broadband community</a> that the program emphasizes a “bottom-up approach” where state, local, regional, and tribal governments work in partnership with the federal government to expand broadband networks.According to Feinman, the requirement serves as a gatekeeping and scoring criteria for infrastructure projects and digital equity programs.&nbsp;He also discussed how allocations were based on the second version of the Federal Communications Commission’s national broadband map, which has faced criticism from stakeholders across the country. But Feinman said that the map was continuously improving and would help assess general broadband needs and will allow states to submit further in-depth proposals.“It will create gatekeeping criteria for who is bringing a project properly before them the, and then scoring criteria for both deployment activities, which is to, say, infrastructure, and non-deployment activities, which is digital equity programming,” said Feinman.David Hartin, president of private equity firm with holdings in telecommunications and technology ITC Holding, s<a href="https://broadband.money/events/episode-3-intro-to-the-capital-stack-how-will-you-structure-the-capital-invested-in-your-company">uggested that internet service providers start</a> by knowing their business.“We [as a private equity firm] are looking at you to know your business better than we do so just make sure that you know the number of subscribers, your annual revenue, monthly revenue,” said Hartin. He urged providers to ensure their valuation expectations are correct and applicable.Connect Humanity Chief Investment Officer <a href="https://broadband.money/events/where-s-the-funding-episode-4-partnerships-alternative-sources-and-pathways">Brian Vo, added</a> that financing “starts with a conversation on how you want to optimize your capital.” A provider with 10,000 subscribers might be interested in more of a project or revenue-based financing where small providers may want to avoid banks completely due to recessionary and inflation pressure, he said.Non-profit organizations often have greater flexibility in providing funding compared to government agencies and banking institutions, said Vo, whose Connect Humanity in a non-profit that works for community financing. But non-profit applicants still must be knowledgeable about their financial abilities, market conditions, potential partnerships, risks and threats, he said.&nbsp;Jase Wilson and Mike Faloon, co-founders of Ready.net, <a href="https://broadband.money/events/where-s-the-funding">urged ISPs to start</a> the matching process early by researching funding options and building capital stack and resources to finance their projects.&nbsp;Principal of Klein Law Group Phillip Macres and CEO of internet service provider Aristotle Elizabeth Bowles <a href="https://broadband.money/events/where-s-the-funding-episode-5-navigating-the-letter-of-credit">warned ISPs that they will also have to prepare for the letter of credit</a> requirement. The letter of credit, a bank note that guarantees payment of 25 percent of grant awards in event of a default, adds to the 25 percent project cost match requirement. The money associated with the letter of credit is held in a frozen account during that time and can have significantly detrimental affects on providers.During <a href="https://broadband.money/events/where-s-the-funding-episode-6-securing-matching-funds-efficiently" target="_blank" rel="noopener noreferrer">Episode 6</a> and <a href="https://broadband.money/events/where-s-the-funding-episode-7-tapping-municipal-markets" target="_blank" rel="noopener noreferrer">Episode 7</a>, Chris Perlitz, managing director with Municipal Capital Markets Group, told the community that municipal bonds are a great source of capital. Municipal bonds offer tax-exempt benefits for investors and are often among the most affordable means of raising capital, he said.&nbsp;All past and future episodes can be accessed on Broadband.Money/WTF. Join us on August 16 for the next episode, Matching Funds for Rural Electric Cooperatives, that will examine the financing options available for rural electric co-ops to expand their footprints.

What listeners have learned (and what they need to know) about the matching requirement in the $42.5 billion Broadband Equity Access and Deployment program. 

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