Imagine a world where everyone in the U.S., regardless of geographic location or economic circumstance has access to the incredible equalizing power that broadband can bring. That’s the promise of the historic Infrastructure Investment and Jobs Act (IIJA), also referred to as the Broadband Infrastructure Program.
Join Telecompetitor and Broadband.Money for this important webinar, where Scott Woods, former NTIA executive with firsthand knowledge of the BEAD program process will share his perspective on the most important details of the BEAD NOFO.
Bernie Arnason: Good afternoon, everyone, and welcome to today's webinar. I'm Bernie Arnason with Telecompetitor and Pivot. I wanna thank you for taking time outta your busy schedule today, to join us, to discuss what might be the hottest topic in broadband today, and that's the $43 billion BEAD Program. Now, anytime you have two digits before a billion, you tend to get some attention. I don't know about one digit these days, maybe not so much, but definitely two digits. We greatly appreciate you joining us, and I hope you're enjoying the start of summer. Both today's speaker Scott Woods, and I, are in the DC area where we've had a great stretch in the last week or so weather-wise, anyway, hope you had the same. And it is indeed a busy time in broadband, and it's about to get a lot busier, thanks in part to the topic we're gonna be discussing today.
Bernie: Now, before we jump in, I'd like to recognize and thank our exclusive sponsor broadband.money. Broadband.money is the fastest way to discover and win broadband grants in your territory. You can apply to many programs at once, get expert help and counsel, line up matching capital and team up with community partners and much, much more. Broadband.money is one of the many platforms developed and managed by Ready.net, whose mission is to help service providers grow their business and connect more subscribers with better internet services. You can check both of them out with the website URLs listed on the screen here.
Bernie: Our goals for today are to discuss and outline key factors from the NTIA, BEAD, Notice of Funding Opportunity or NOFO, as we have come to call it, we wanna understand important implications for the Telecompetitor community. Now, it's important to understand and recognize the BEAD, NOFO is a 98-page document, a length by the way, that NTIA is quite proud of for its brevity. That being said, there's no way we could discuss everything covered by the NOFO today, so we've picked what we believe are some of the most pressing issues, and we'll be talking through those.
Bernie: And we're lucky to have with us today, a true insider, someone who had a front-row seat throughout this process, and that would be Scott Woods. Scott is the former inaugural Director of the Office of Minority Broadband Initiatives in NTIAs, Office of Internet Connectivity and Growth, or OIGC. There, he served as the principal liaison between OIGC and key strategic partners, including representatives from state and local governments, from telecommunications companies and carriers, from colleges and universities, and a bunch of other stakeholders. Scott is a broadband funding implementation and stakeholder engagement expert, and he served as a key member of the NTIA leadership team responsible for the launch and implementation of this historic $65 billion broadband funding program, which was authorized or is a part of the Infrastructure Act.
Bernie: Scott's NTIA involvement also include the Broadband Technology Opportunities Program or BTOP, the BroadbandUSA Technical Assistance Program, and many other programs there at NTIA. He specializes in building community-based broadband coalitions. Now, in his new role as the Vice President for Community Engagement & Strategic Partnerships at Ready.net, Scott will facilitate and develop key public-private partnerships formed via the broadband.money and other Ready.net platforms, as well as engaged local communities and other industry partnerships to advance and support community-based broadband education, digital equity and advocacy initiatives. Scott is going to spend a few minutes outlining some of those key topics that we talked about with a few slides and then he, and I will have a moderated discussion about some of those key points, at which time we will invite the audience to participate as well. So as you're listening, if you have questions, feel free to jot those down or just go ahead and enter them directly in the question toolbar there on your screen. So super excited to have you here with us today, Scott, and go ahead and take it away.
Scott Woods: Thank you, Bernie. And good afternoon or good morning everyone, depending on where you are. It's my pleasure to be here with you on this afternoon, a sunny afternoon here in Washington, DC I'm gonna set the stage of framework really quickly before we begin and dive into the NOFO. Again, I apologize in advance, there is a lot of narrative text in these few slides, but it's very important that we dive into the language of the NOFO, and that language and words have meaning and they're interpreted very differently. And so, again, I'm not gonna read off all of the narrative texts from the slides, but I have it here, so that again, you will have key sections to go back to, key things to look at. And again, this is from my experience, these are my opinions. Again, I welcome thoughtful disagreement, I welcome thoughtful discussion, but more than anything else, it's just my pleasure to be here with you to talk to you about these things that will impact hopefully the successful implementation and execution of the BEAD Program Digital Equity and all of the broadband programs currently at NTIA and under the Infrastructure Investment and Jobs Act.
Scott: So we're gonna begin. When I do begin, I'm gonna go off-camera and I'll come back a bit later. I do want to acknowledge that the slides will be available, Telecompetitor will send them out. They are also available on broadband.money. So if you go and register on broadband.money, you can get access to these slides and the materials right now. So...
Scott: Sit back, relax and take a few minutes. We're gonna walk through some key concepts and then Bernie and I will come back and have hopefully a lively discussion. And I look forward to taking any questions you may have. And again, it is my pleasure to be with you on today. So I'm gonna go off-camera here and then we are gonna start.
Scott: So the first thing I wanna talk about and bring to your attention, is the BEAD and digital equity coordination requirement. It is specific language in the BEAD NOFO that eligible entities and for brevity sake as we move forward, I'm just gonna say states, right 'cause we know the money is gonna flow through the states. Right. So states should view this BEAD NOFO And the state digital equity planning grant as a holistic, complimentary effort aimed at addressing the digital divide in this country. Key core concept in this requirement is that that five-year action plan that states will sign up for again after the letter of intent, that they indicate that they want the planning funds, they have to submit the five-year action plan. It has to be in close coordination with the Digital Equity Act program and strategy. So again, we're looking through this, we're looking at it. That five-year action plan sets forth that vision for digital equity. But there are specific things that the NOFO and NTIA is going to ask for and request to see in that plan, right?
Scott: Needs assessment for underrepresented communities, asset inventories of ongoing digital equity activities, holistic strategies around affordability devices, skills, digital navigators, etcetera. My key observation from this coordination requirement is there has to be a ton of capacity building to ensure effective coordination at the state and local level. And so my initial question is, how many states currently have both broadband strategic plans and state digital equity plans right now? The answer is probably not a lot. So there's a lot that will have to be done in that planning session, in that planning period, when the BEAD money, the BEAD planning money is received prior to the submission of that initial plan. So in both the BEAD and the digital equity, there has to be close coordination. And again, NTIA hopefully will ensure and check that they made this a key requirement in the BEAD NOFO. Again, planning activities has to be based on actionable data and information. You'll see that theme all throughout the BEAD provisions. But my question is, who has access to this data and information and how will it be utilized? Are there standards or standard approaches or will each state attack and address these requirements differently?
Scott: Another concept that jumped out to me are key definitions so I wanna go through just a few of the key definitions because they set the framework for the stakeholders that will be impacted by the BEAD NOFO and the BEAD implementation. Number one is the non-traditional broadband provider. So we heard a lot when I was at NTIA and we were out in the community, a lot of stakeholders were concerned that the BEAD money would just go to service providers and that's it. But there's a key definition in the BEAD NOFO that expands the sub-grantees or those who are available to get money under the BEAD through non-traditional broadband providers. Now you can take issue that electric co-ops or nonprofits or any of these entities that are listed here are non-traditional broadband providers. But again, that is what is defined in the NOFO. And I wanna point out the key concept here. It's not just that they have to provide the definition, specifically states that these entities can currently provide or will provide broadband services. So again, that's a key component, a key phrase in that definition, you do not have to be... The entities do not have to currently be a broadband provider. But in fact, they will provide or indicate that they will provide broadband services to be classified as that non-traditional broadband provider or a sub-grantee under the BEAD NOFO under the state plan that moves forward.
Scott: Another expansive definition is the definition of community anchor institution. And again, this was defined in the Infrastructure Investment and Jobs Act. And historically, we have defined community anchor institutions as schools, hospitals and libraries. But in fact, the IIJA and the BEAD NOFO expands that to include public safety, institutions of higher education, public housing, community support organizations that facilitate greater use of broadband service by vulnerable populations. And then another key phrase in the community anchor institution definition is not just limited to the definition that's provided in the BEAD NOFO. Surprisingly, it states specifically that an eligible entity in this case the state may propose to NTIA that additional types of institutions should qualify as community anchor institutions within that entity's territory or service area or jurisdiction. So that means we're not just limited to the requirement of gigabit connectivity to community anchor institutions as defined in the NOFO. States have an opportunity to further that based on various criteria that the states will develop for the definition or will support the concept of community anchor institution.
Scott: The third one is a little controversial, it creates tension between fiber providers and wireless or fixed wireless providers, and that is how the statute or the NOFO has defined what a priority broadband project is, and that means a project that will provision service via end-to-end fiber optic facilities to each user, to each end-user premise, excuse me, I'm sorry about that. And then there's a footnote to the definition of priority broadband project that specifically states that there is a reliance on fiber optic technology as a component, as a caveat, as a spark if you will, for future deployment, future scalability into 5G, into success or wireless technologies and other advanced services, so again, this has created somewhat of a tension between the priority or importance of fiber broadband projects versus wireless, now, we all know that there are business cases where wireless totally makes sense. But again, I'm just giving you key concepts, key definitions that I see in this NOFO that obviously will need greater attention and detail.
Scott: And then finally, the concept of digital equity is specifically defined as the condition, excuse me, in which individuals and communities have the information and technology needed for full participation in the United States economy. This is way more expansive than when we started in BTOP with the idea of digital inclusion and adoption being devices, provision of services, you give them a device and they will automatically... Vulnerable populations will automatically use the internet, but the concept of digital equity includes training for end-users, specific training, job training, other types of training specific to that category, cyber security training, telemedicine, telehealth, workforce and economic development activity, so that the concept of digital equity includes digital inclusion, but it is way more expansive, much more expansive now under the IIJA and the BEAD NOFO than before. So let's move forward to the, excuse me, key requirements of the five-year action plan. The first thing that jumps out is the reliance, excuse me, on data, data, data, data, now if we look specifically in BEAD NOFO section 4, particularly B3.
Scott: Excuse me one second. And it calls for eligible entities to identify broadband access, affordability, equity and adoption strategies, and at a minimum, that five-year plan must address 13 core items or elements that are outlined in Section B3, section 4B3, and I just highlighted three that I wanted to bring to your attention, so that five-year plan must include an asset inventory that catalogs broadband adoption, affordability, equity, access and deployment initiatives. It must incorporate any and all available federal data, local broadband and availability and adoption data. It must identify local and regional broadband service needs and gaps, including specifically for those prioritized areas or communities that we talked about in the NOFO, un-served and underserved locations and community anchors without gigabit service. Now, this is just three of the 13 core elements that this plan must entail, and so again, this all goes back to the capacity of the state entity, the eligible entity, do they have the capacity, do they have access to the data that they need to effectuate and file and submit a qualified report under the BEAD NOFO. And the next, the local coordination requirement and outreach documentation that we can't miss under Section 4C1C.
Scott: Again, tying that action plan to specific local and tribal coordination requirements and specific documented outreach steps, and we'll talk about that a little bit more, so what I see here, my key observations, utilization of community organizations, especially the faith-based community, when you're working in un-served and underserved communities across the country, now we're not talking about non-denominational, you must engage with your faith-based communities. We cannot go into underserved areas and do not think that you can engage with the local clergy, the churches, the synagogues, the mosques, they have the pulse of the people, particularly during and coming out of the pandemic, so you have to involve local organizations in this local outreach requirement and documentation requirement, especially and including our faith-based community and our faith-based leaders. And then all stakeholders must be at this table for pre-planning and planning activities, otherwise, you can't document what you've done and how you've done it, so this is going to be a very key requirement, and if you look at that NOFO in Section 4C1C, it tells you all of the requirements, the inputs that the plan must document, and we'll talk about that in a few slides.
Scott: So next we come to, I guess, the more [chuckle] controversial parts if you will, the challenge process. So again, I'm not regurgitating, there's a lot of information out there on various other sites, NTIA has done a really good job with their engagement and outreach, talking about elements of the IIJA and the BEAD and Digital Equity NOFOs as well as Middle Mile and Tribal as well, but again, the key component of the challenge process is after submission of the initial proposal, but before allocating the BEAD funds, the state or the eligible entity, I'm just gonna summarize it as the state, must effectuate a challenge process, where a particular location, community anchor institution within that jurisdiction is either eligible for grant funds, whether that particular location is un-served or underserved, and then that successful challenge that does move forward, again, must go to NTIA for review and approval, so that state entity is not the last step where that challenge process moves forward, so my key observation...
Scott: Observations from this challenge process is only ISPs, non-profits, and local governments can challenge those fundings... Those findings, excuse me. That's the key. That's actually in the actual NOFO. There is a significant reliance on empirical data. As we know right now, some states have granular mapping activities and sites that are up. And they're collecting data and information, some states do not.
Scott: How does that reliance on that state's empirical data... So how is that gonna impact the challenge process? Again, the FCC data maps aren't out yet, so I know this is a little prescriptive, it's hypothetical. But again, this is very important, the reliance on empirical data in that challenge process is going to be key. Another key observation, states must adopt clear, transparent and evidence-based challenge processes. Right now, there's no guidance on the uniformity of the approach. What will be the parameters? What are the timelines? What are the requirements for successful challenges? And again, going back to the capacity, do the states have the capacity right now to develop a transparent challenge-based process? And if they don't and they get the BEAD money and they get the $5 million to do planning and capacity building, what's the time frame upon which to develop such transparency... Such transparent processes? So that is worth noting and definitely worth coming back to review and evaluate. Next, we have the utilization of the most recently published version of the FCC's broadband data maps at the time of the challenge process. So that tells me that the FCC will have more bites at the apple, if you will, to release versions of that data map.
Scott: So we've gotta make sure, again, that we are operating from the same frame of reference with respect to that FCC data map. And making sure that the challenge processes and the challenges that proceed are pursuant to the most recently... Most appropriate FCC data map. And then finally, what are the provisions with NTIA's review and approval process? What is that gonna be based on? What are the timelines for approval? Is there an appeal process? What data will they use or rely on? And the NTIA has the National Broadband availability map. What role will that program play in determining whether these challenges will in fact be successful or not? So again, a lot of information into the challenge process. It's going be a very key provision that will ultimately impact whether the BEAD implementation will be successful or not.
Scott: So the next concept that I highlighted is the state's failure to participate. So I think I checked, I think as of this morning, we still only had 35 or 36 states that have filed letters of intent. I could be wrong, that number could be up, but I'd last checked it was about 35 or 36 that had submitted that letter of intent. But the NOFO specifically states that if that state or eligible entity fails to submit a covered application, now that means the Letter of Intent or the initial proposal or the final proposal by the NTIA's mandated applicable deadline or any re-submission deadlines, if revisions are required, a political subdivision, local government, or consortium of political subdivisions of that state may submit the application type in place of the eligible entity. That's a big fail safe, if you will, that will ensure that these funds will go to, again, ensure un-served and underserved communities.
Scott: But it still leaves a ton of questions. So my key observations here are, how are we coordinating with the state broadband offices? All stakeholders must be involved. All service providers, local government, philanthropic organizations and community organizations. We must be coordinated with the state broadband offices now, because we know that their various states have various maturity levels of their office. Some states have had broadband offices for several years. Some don't even have them yet. Some just stood them up. So again, not knowing what the state is ultimately going to do, we still need that coordination in that office between all of the relevant stakeholders.
Scott: My next observation is the capacity of that political subdivision or local government or a consortium of local governments to provide "A comprehensive proposal." What does that mean? Can those planning funds be used to facilitate those local activities? Right now, the planning funds we use for the state to build capacity, the state can subgrant that out. But we have to think about how that will impact local governments and local communities and local activities, in case that state does not submit that letter of intent. And then third, I think this is highly unlikely. It's highly unlikely, in my opinion, that a state will opt out, not submit the letter of intent, given the stakes that are involved, particularly with COVID.
Scott: Coming out of the pandemic, if some of you believe we're coming out, we're still in it, the provision of robust broadband services, broadband networks, infrastructure, digital access, equity, it's still very important. But this opt-out, this failure to participate clause, this fail-safe, is there. And it does protect against politics, against bureaucracy, against mistakes or incompetence. So it is there. And I think it's a good provision that we all can rely on, but we still... It still begets questions regarding what the local government, the political subdivision, will be able to do if that deadline or those deadlines are met. So we'll stay tuned and we'll continue to track those as well.
Scott: So Michael Jordan once famously said, "The floor is the ceiling." [laughter] I don't know what the hell he meant by that. But in this particular case, we're talking about matching funds. 25% is the floor, not the ceiling. It's not the cap on matching funds. It's actually the bare minimum in this program. I have some issues with matching funds. This is higher than what was done under BTOP and some of the other subsequent grant programs. Again, as you are all well aware, the federal government will cover a certain percentage of the project cost. So on the 25% match model, the government will cover 75% of the project cost. And they're asking in this case for 25% minimum as the match. But I'll also wanna highlight a couple of things that jumped out to me. Specifically, it stated that, other federal programs, other federal funds that were enacted the last couple of years could be used for matching funds, that there's a clause in there that jumped out at me and it says, "To the extent permitted by those laws." So we have to understand and ensure whether Coronavirus Funds, CARES Act, CARES Act money, the Consolidated Appropriations Act, the American Rescue Plan. Any of those monies, do they have restrictive language in them that will prevent them from being used as a match in this program? If they don't, then this obviously clearly allows for those funds to be used as match.
Scott: I also wanna highlight sort of the impact on small and non-traditional providers, particularly minority-owned providers. The BEAD NOFO specifically had language that said, No, though a match requirement could... I scratched out "could" and put "WILL" in capitalized 'cause we know the match requirement does deter participation in grant programs by small and non-traditional providers. So particularly, those in marginalized or low income communities. So this was a little bit of a red herring for me. NTIA knows that this match requirement will in fact deter participation. So using cold language, in my opinion, was not correct. But anyway, moving forward in those cases, the state can seek a match waiver. So if that match threshold is too much or a particular class or section of providers can't meet the match, it can be waived or reduced. There's language in the NOFO that will allow the assistant secretary, I.e. NTIA, to reduce or waive the match. So keep a note in that because I'm gonna come back to this in a second.
Scott: Also, matching contributions may come from any project partner involved with the sub-grantee. So it could be the state, any unit of government, utility company, the cooperative, non-profit, philanthropic organization, for profit, regional planning. The list goes on and on so any project partner can contribute match and you all know match doesn't have to just be cash, it can be in-kind. And there's a number of different mixes and matches you can contribute that would effectuate match in a federal grant program. So staying on this theme again, and I think this is one of the ironies that's in the language of the NOFO. NTIA's stated preference is for maximum sub-grantee contribution and minimal BEAD subsidy. I'm gonna say that again NTIA stated preference in the BEAD NOFO is for maximum sub grantee contribution I.e. Beyond the 25% or more and minimal BEAD subsidy grant. We understand why they did it. They wanna ensure that the BEAD funds will have enough funds to go into all of the unserved and underserved areas and community anchor institutions. They wanna maximize the use of those funds.
Scott: But again, this is problematic for me because NTIA specifically advises states to require incentivized matches of greater than 25% from sub-grantees wherever feasible. But then they say especially where expected operational costs and revenues are likely to justify greater investment. So that especially is what triggered my view is because it doesn't say specifically where operational costs and revenues are likely to justify greater investment, they're saying especially so that is an additional case. So where we came up with the concept, where I came up with the concept of 25% is not the floor, it's the ceiling, it's not the floor, not the ceiling. It is under this concept here. Incentivizing matches of greater than 25%, giving us specific directions to states to again give special treatment, give additional scoring, give scoring criteria to those sub-grantees that can raise more than 25% match.
Scott: Again, key observations. This will have a negative impact on small, non-traditional, disadvantaged and minority owned service providers unless that match is waived but not penalized for requesting the waiver. And we all know there are other areas that states that high cost areas may be an exception, that we're not talking about that right now. Again, negative impact. Negative impact on this. This is huge. And then projects and sub-grantees that directly contribute greater than 25% match are indeed encouraged to receive extra credit consideration. We're gonna put a flag in this and see that scoring prioritization for last mile in just a few minutes. Almost finished, I know this is a lot, but I just wanted to highlight some key concepts here. Another one that stands out to me is the letter of credit requirement. And we know this has a detrimental impact on a lot of small carriers, service providers, particularly those that are led by women, those are led by people of color, right?
S1: So it says, "They're following the model of the RDOF." Don't get me started on that. That's for another time. So during this application process, sub-grantees are required to submit a letter of credit that meets the requirements set forth in 47CFR58.804C2, right? Again, go to that, you can see the requirements of that. But it says, "Each perspective grantee must obtain an irrevocable stand-by letter of credit... " Credit, excuse me, "And in no event, shall that letter of credit have a value of less than 25% of the sub-award amount."
Scott: So again, if you're working on a fairly big project, you're in a fairly large unserved, underserved area, you are targeted to have a letter of credit no, less than 25% of that sub-award amount. Now I have problems with the letter of credit requirement. We know historically the impact a letter of credit has on certain providers. It's going to negatively impact our small providers, especially those minority-owned service providers, who've experienced no historical or systemic... No redlining and banking issues. It also defeats the purpose of the match waiver provision, rendering that provision useless.
Scott: So we'll have to think about that and talk about that impact as well. Hopefully NTIA will reconsider this or come up with another method to ensure financial solidarity of the sub-grantee or service provider. But we'll continue to track this, again, very important requirement. I'm gonna breeze through here again, so we'll have some time for questions, the last 20 minutes. 15 to 20 minutes or so. I wanna highlight a couple of other concepts like local coordination. I'm gonna come back to that, talked about that in the first couple of slides. But that local coordination effort will require NTIA approval, alright? And NTIA will evaluate and approve plans that include these five core areas, full geographic coverage.
Scott: So the state has to submit a plan that is the full geographic coverage of the state. A meaningful engagement in and outreach, particularly for a the recruitment of women and other historically marginalized populations for workforce development opportunities. That is a huge requirement that states will have to undertake. Utilization of multiple awareness and participation mechanisms. Transparency is a process, to include, this is key, the documentation and publication of results and outcomes of those coordination and outreach efforts. So the state will have to document and publicize, make public the results and outcomes of all of their coordination efforts and the outreach effort. So that is a huge fundamental task. And that effort, those efforts will have to go in front of the NTIA for review and approval.
Scott: And then finally, outreach to, and direct engagement of unserved and underserved communities to include historically under-represented and marginalized groups and communities. So again, you can see the tie with digital equity in this local coordination, the tribal coordination effort in the BEAD NOFO. Now, shifting, to sort of post NOFO, we're into the project. They are ongoing, really hefty ongoing reporting requirements by sub-grantees. And so all of the service providers who will ultimately end up winning, and you're a sub-grantee for a state, you're operating, NTIA requires, the Grants Office requires, quarterly, semi-annually and annual reports. NTIA has set the framework and requirements for those reports, and they're pretty onerous.
Scott: It says at a minimum, at a minimum, the report must look at all of these requirements, must contain all of these requirements. So these are data-intensive, fact-specific requirements. They're 14 and all. I'm not gonna read through all of them, but I wanna go back and you can just look at some of these requirements that the sub-grantee is going to have to submit and the state's gonna have to review it, and then it's gonna have to be reviewed and approved at NTIA and the grants office responsible for overseeing the grant award.
Scott: So there are 14 specific sub-reporting requirements that grantees need to be aware of as you move forward through this process. And then finally, there are just additional things that require, I think, our attention. They have data and data-tracking elements into them, specifically, one, the submission of the initial proposal. NTIA is very intentional in stating that the states must process, must document the process, strategy and data-tracking methods that the eligible entity will implement to ensure minority business, women-owned business enterprises and labor surplus area firms are recruited, used, and retained when possible.
Scott: So you gotta be able to track those processes, document them, and then outline your data-tracking methodology in that initial proposal. That's a huge component. The requirement for fair and open, competitive and transparent processes in the selection of the sub-grantees, that's outlined in Section 4D, fair, open, and competitive competition. But I wanna highlight this last thing, I think this is very important. NTIA sets forth the prioritization and scoring selection among competing last-mile proposals. So in many instances, some of you and the target audience, if you're a service provider, you may be competing against, submitting proposals, competing against another local or service provider in that jurisdiction.
Scott: NTIA has set forth the prioritization criteria from this. Number one, the primary criteria, minimal BEAD outlay. Remember, we talked about that before. So if you're looking at two proposals from service providers, one's going to contribute more match and utilize less grant funds. NTIA is saying to the state, "You should prioritize that proposal, that service provider over others because of that minimal BEAD outlay." So again, we gotta keep a thumbprint... Thumbtack on that and come back and see how that's going to outlay. I think that negatively impacts of a lot of carriers and leads to a lot of concerns that we heard regarding... A lot of these funds, the funding will go to traditional service providers, those that have a lot of capital, liquidity, etcetera, to the detriment of others.
Scott: With the issue of affordability, [chuckle] now, again, I found this was very, very ironic. We talk about... A lot about affordability and service provision must include affordable plans, but in scoring, it specifically states that it's not the actual price or set price that the sub-grantee or service provider would have to commit to, it's just the commitment to pursue affordability or to offer affordable services. So I think that there may be a missed opportunity there to hold to more account in terms of how a service provider will charge for actual prices for services in unserved, under-served and high-cost areas. So we'll look at that and continue to track that.
Scott: And then the final two, just the secondary criteria, speeds of deployment. We all know that, that's how fast the network can be constructed or built or implemented. Are you utilizing existing facilities, infrastructure, IRUs, etcetera, etcetera? And then the additional criteria for scoring, workforce development, job quality. But I wanna highlight here open access, and again, going back to that local and tribal coordination. So how NTIA's going to put all this together, I don't know, be interesting to see, let alone to do it in coordination and conjunction with the state entities, the broadband offices, it's gonna be very important.
Scott: So I wanna thank you all for this opportunity to talk to you all today. I just wanna highlight a couple things before I turn it back to Bernie. It's really key that we have tools, I believe, at ready.net and broadband.money to address... To help you address these issues, right? Number one is our Ready BOSS product. The back office secret sauce, if you just allow me to do my infomercial just for a minute, is a very modular, flexible, cloud-based API integration platform to power your business network and customer. So log on to broadband.money, you can pre-enroll for that, and I think you will find that very useful. Also on the broadband.money platform, it's our digital platform that we use to communicate with all of the stakeholders.
Scott: So whether it's service providers, members of the local community, state and local government leaders, broadband providers, if you log on to broadband.money, we have a lot of content there that is directed for you and as well as a community for you to ask questions and to share best practices, to do a number of different things. So I encourage you all again to participate, join broadband.money, and I hope to see you on there very soon. And so with that, I wanna thank you all. I will turn it back to Bernie for our question and answer session. So Bernie, thank you very much.
Bernie: Yeah, thank you, Scott, that was awesome. So much great info and obviously, your perspective, kind of having been in the room, if you will, during all this planning. And we... Yeah, unfortunately we don't have a ton of time, so I wanna take advantage of you while I have you and jump right into this. And again, to the audience, we... I have seen a few questions submitted already, but feel free to submit questions to the question toolbar there. I wanna start out with this Scott, though, is... Throughout the theme of what you outlined, I kinda got this kinda recurring feel of things like the need for outreach, the need for involvement, the need for organizing, particularly... We put a lot of emphasis on the states as they're the ones kinda running the program, but with the Telecompetitor audience kind of over-represented by what we would call sub-grantees, service providers, they too need to start thinking about these things, right? Outreach to local communities, starting to partner with folks, getting all your ducks in a row so that you can kinda meet... Or help your state meet these requirements, I guess is the way I'm looking at it.
Bernie: And particularly I'm interested in your perspective on this, if a state does opt out, or does not opt-in might be the right term, these kinda smaller local governments, political subdivisions or whatever are gonna have to organize and go after that money. And my assumption would be the service providers and sub-grantees are gonna be very much a part of making that happen, right? So I'm just curious about the overall theme of the need to get involved now and start building those coalitions and being a part of the process at the sub-grantee level.
Scott: Yeah, absolutely, Bernie, you hit it right on the head. So many of your audience members here, like you said, they're local providers, they know the community. And so if an office is standing up or they traditionally don't have outreach into certain communities, where will they go? Who will they turn to for inside information, for insights on best practices, on who to talk to? It's gonna be the local provider community that will play a crucial role, not only in the implementation of the BEAD, but also the local outreach and documentation effort. So I think that's... You hit it right on the head. That's gonna be very important to track and document as we move forward, right? And I think this community plays a very important role across the country on how these things will happen or will not happen. So I think that's a good placeholder to come back to and see where we are three months, six months, nine months into this implementation process.
Bernie: So I think the message is get started now, right?
Scott: Absolutely, absolutely, get started right now.
Bernie: Yeah. Next thing I wanted to make sure I cover is this challenge process, 'cause this seems like it could become what I'm gonna call a bit of a hot mess. You've got, on the one hand, the data that's gonna be provided by the FCC and the kinda the new mapping data which is gonna be the foundation of the data that will be used, but then you have other... Any entity, whether that's a local provider or local government or whatever, can challenge that data kinda with their own data. And so how... I'm just curious, how do you see this playing out? Ultimately, who's gonna decide who has the right data, if you're challenged? Who's the arbiter?
Scott: That's one of the questions that jumped out to me, Bernie, just jumped out the paper when we were looking... When I was looking through... We were looking through and evaluating all of that. Who's gonna make the decision? NTIA's gonna get this challenge process from the state, so I'm assuming it's gonna be NTIA is gonna be the final arbiter of this. But what's the criterion? Will there be an appeal process? And is it that fair and equitable across the board? So I think your... [chuckle] Aptly, hot mess... I hope it's not, but again... I think we'll have to wait see what those maps look like, the information that the granular maps that the FCC is developing, what they will entail. And I think that will inform the degree of hot mess [chuckle] we'll have to deal with as we move forward. But you're spot-on again as usual.
Bernie: So I'm gonna jump to some questions from the audience now. One is, can you... What's your thoughts, or can you provide any examples of what you think in-kind contributions might be?
Scott: Yeah, so there's a lot of materials. So NTIA has a... Commerce has grant manuals. You can do stat, in-kind or soft... Not money, right? So administrative time, executive staff time, cost that you attributed to a specific project. There's a whole section in the CFR that deals with in-kind costs of both match and in-kind cost... So in-kind contributions, excuse me. So again, there are specific rules that govern it, so you just can't just throw something in there and say, "Oh, this is in-kind," but it is more than just then capital and cash that can be contributed to a project.
Bernie: I would assume though, you're probably not gonna wanna do all of your match BEAD representatives as in-kind because the others who will probably throw some money on the table, and that won't necessarily compete well if it's totally in-kind.
Scott: It necessitates the need for partnership and collaboration and that's something that we preached since the beginning of this process is, "We're all in this together." For this to really be successful, you really need to idealize partnership. What does that means? We've gotta be able to model that throughout all of the components and facets of this project, of this program, not just the project implementation or the benefits, if you will. It's the smaller components, the match, the equity, the debt, shared risk. There's a lot that's there that I think that will be available for partnership and approaches that will avail itself of sort of non-traditional approach as to the provision of broadband and services and digital equity.
Bernie: Next question is, do you have any insight on what will be defined as high cost?
Scott: I do not. Unfortunately, I do not. I do have faith though, in the team that's there at NTIA under Assistant Secretary Davidson's leadership and Doug Kinkoph over at OIGC. These folks are professionals. They know what they're doing. Part of this is wait and see. Many of this is not... Have not yet been defined. And I wanna caution people, too. This is not just NTIA. So Congress and the IIJA gives the directives. NTIA and its professionals take that, those directives and fashion the rules and the criteria and everything to develop these programs. So I know they're working on it. It'll be interesting to see what they come up with. But again, I know they have high quality professionals that are working on this. Now, we may not agree ultimately, but I do know that they're working on these definitions and will provide further information.
Bernie: And one thing I took away seeing Administrator Davidson there at that recent Mountain Connect Conference is NOFO is not the last word. There's gonna be a lot of other directives coming out of this that put further definition around the rules and some of the things that we've been talking about, right?
Scott: It is, but the NOFO is the governing document. So the NOFO contains the applicable rules and criteria and regulations on how this is gonna go down, so to speak. Any additional clarifications, if they fundamentally change elements in the NOFO, then that NOFOs gotta be addressed or amended. I don't think there are not too many post amendment NOFOs that end up going through. So there may be clarifications, but the base framework rules, criteria, that's set in the NOFO once that was published back in May.
Bernie: So, great question here in terms of understanding the role of the states in defining rules versus the NOFO like we just talked about. So for example, low cost, the other parameters, minimal BEAD outlay, cost per location, stuff like that. Do you see the states as taking guidance from the NTIA, but coming up with their own rules? Or will each state maybe have different rules? How do you see that coming together?
Scott: Yeah, that's a great question. That's one of the concerns that I had. I thought the NTIA probably could have been more direct in using should and must to give state-specific direction. Some of this is up for interpretation, to be quite honest with you, and states will interpret things differently, hopefully not too differently that you lead to a program that can't be controlled and provide an oversight. And then some, I'm sure if states have questions, NTIA will provide guidance and clarification in the process. But you are correct. In my opinion, again, this is just my opinion, there were missed opportunities to be more prescriptive, to really provide bedrock guidance, must-haves, should, how-to's to states. But in areas that there's not that prescriptive guidance, we're up for the interpretative powers, if you will, of the state broadband office or the professionals that they hire to implement these actions.
Bernie: And I really appreciate... I mean, questions are flooding in. There's no way we're gonna get to all these questions in our allotted time. So if we don't get to it, we will share these questions with Scott in ready.net and can follow up afterwards.
Scott: If I could do a shameless plug, Bernie, [chuckle] I'm gonna launch my Ready or Not webcast here pretty soon, so we'll be able to address a lot of the questions here. I'm looking forward to launching that and be interactive with the stakeholders and members of the community now to address questions they may have. Now, again, this is just my opinion. Obviously, I used to work at NTIA, I was there for 12 years. But I can give you my opinion. I would love to debate some of this with the NTIA folks or people who may have more inside information than what I have. But, no, questions are spot-on. There's so many questions that this is not the last time we should do this.
Bernie: A question I have for you is, honestly, a ton of interest from service providers, sub-grantees, as we call them, wanting to figure this out, and I'm sure we're gonna see many of them getting involved, but I suspect there are some that are looking at this too, and saying, "Woah, this is a lot. There's a lot of red tape. Do I really wanna get involved with this? Is it more trouble than it's worth?" type of thinking. And I wonder, what would your message to them be if they're kind of on the fence? What would you say to those sub-grantees or potential sub-grantees?
Scott: Obviously do your due diligence. There are partnerships that you can do that would lessen the administrative burden of this. But this is in a historic program. Some will argue there's not gonna be enough money. Some argue that this will be able to make a significant impact and digital divide. Each company, each ISP is gonna have to sit down and evaluate what they can do. I would encourage everyone to take advantage of it. I honestly don't know how all of this is gonna come together, but I do have faith in, obviously, the number of ISPs and communities that are out there where this is a significant need. I also have faith in the professionals at NTIA. And then obviously I have faith in my company who's developed tools to help ISPs and the communities begin. But ultimately, I think it's worth the effort.
Scott: People say grant money is free. It's not free. There are significant reporting burdens and requirements that you have to be aware of that are both time and resource-draining. But again, ultimately, I believe it's worth it. But again, each company will have to re-evaluate and evaluate, excuse me, what they can and can't do. But I would encourage all to do so and not be defeatist because they think this is such a humongous task or the money is just gonna go to the ISPs. I reject that. I reject that thinking. I don't think that that's going to be the case.
Bernie: So larger eyes, basically.
Scott: Absolutely, absolutely.
Scott: The larger one, I'm sorry. Yeah.
Bernie: Yeah, so we're about out of time. I'm gonna just pose this last question to you, and again, everybody will be sending you details on how you can get this information, and then as Scott mentioned, there's a ton of other resources available to follow up through broadband.money. And there have been a couple of questions on this already as well, and that is... There's this discussion around BEAD and I guess the overall infrastructure program as leading to "victory" over the digital divide situation in the US, and that this is gonna be it, this is the program that's gonna solve the problems once and for all. And I wonder about your perspective on that because while $43 billion and I guess $65 billion is the total package, it's a lot of money, I wonder, is it really enough though, to ensure everyone in this country, regardless of where they live and regardless of their economic circumstance that they would get access to affordable high-speed internet? I'm just curious about your perspective on that. Is this it? Or 10 years from now, five years from now, are we gonna be back saying we need another billion?
Scott: No, that's a great question. I've thought about this a lot and I've often challenged the $65 billion notion, because when you think about the match and you think about private equity money, and you think about the additional money that some of the national ISPs and other carriers, not just ISPs, other providers, are building out, it's much more than $65 billion, right?
Scott: I think it's enough to have a significant impact. I think it's enough to be a catalyst to solve this issue in a defined time period. Is this going to be enough to solve the digital divide at the end of this program? Yeah, I don't know. I'm skeptical of that. But I think it will be the platform, the catalyst for significant digital equity achievements and broadband infrastructure expansion that will serve as a catalyst to hopefully, ultimately address this issue for good, solve this issue in a defined, reasonable time period. It may not be five years, maybe seven, maybe 10, I think this is the impetus that gets us on that track to solve that, and then from the policy people here in DC, we can argue whether it did, it did not do it, was it a catalyst, was it the impetus?
Scott: I welcome that debate, but I am also excited about the amount of energy and resource and capital that's in the industry right now to address this issue, particularly knowing the detrimental impacts that not having broadband infrastructure, having inequitable communities as a result of the pandemic are highlighted by the pandemic. I just don't think we wanna go back to that. We wanna continue to move forward. I think this gives us a significant step to continue to move that ball forward to complete access, connectivity for all of our communities across the country.
Bernie: Well, we could spend all day... Really, we could spend all week talking about this, but unfortunately, our time is up. And as we've mentioned, there'll be a recording made available as well as copies of the slides. Check your email for instructions on how you can access that. Thanks so much, Scott, for sharing this valuable insight, and thank you to our audience for your participation as well, some really great questions, and if we didn't get to yours, I apologize, we'll follow up after the fact. We look forward to visiting with you on another upcoming Telecompetitor Live webinar. Enjoy the rest of your week and hope to see you soon in person at an upcoming industry event. Take care everyone and stay safe.