WTF: Series Recap & ISP Performance Bonds Announcement

WTF: Series Recap & ISP Performance Bonds Announcement Banner Image

Dec 20, 2023


WTF's epic conclusion has arrived!

Welcome to the final episode of the Fiber Broadband Association’s "Where's The Funding?" series. WTF is a 12-part webinar series to help members understand, navigate, and obtain matching funds for broadband grants.

Over the past year, Where's the Funding? has explored a full spectrum of topics, ranging from Letter of Credit requirements to the unique challenges faced by tribal groups applying for funding.

What you'll learn

During this episode, attendees will hear from surprise special guests on the role of matching funds, including performance bonds, in the Broadband Equity, Access and Deployment program, as well as other federal and state broadband funding programs.

And you won't want to miss a special announcement regarding ISP performance bonds in lieu of Letter of Credit for BEAD grants.

Event Transcript

Gary Bolton: I'm Gary Bolton, the president and CEO of the Fiber Broadband Association, and this is our 12th and final episode of 2023. This is a 12-part series designed to help you understand, navigate, and obtain matching funds for broadband grants. And the NTIA BEAD program requires broadband grants to come in to the table with a minimum of a 25% matching funds and the letter of credit upfront with the applications. For many smaller and nontraditional providers and communities this may sound daunting, but it doesn't have to be. So this 12-part series was designed to help you understand how and why meeting these requirements can be straightforward. Last month we had a fantastic session where we discussed navigating tribal matching funds and grants with Joe Valandra, the CEO and Chairman of Tribal Ready, and Jennifer Weddle, the co-chair of Greenberg Traurig's American Indian Law Practice. It was a great episode where Joe mapped out some strategies to minimize or even avoid matching funds by partnering with a tribal opportunity. If you missed it, you can go to the Fiber Broadband Association's website under events or go to and watch the replay.

Gary: Today on Where's The Funding? We'll be discussing credit and performance bonds with Alex Rozek, the co-Chairman and co-CEO of Boston Omaha Corporation and founder of Mac Mountain Investing in broadband service to rural New England. We'll kick off with Alex and then we'll bring in the founders, Jase Wilson and Mike Faloon to help us recap the Where's The Funding? Series and join discussion with Alex. Alex Rozek is the co-Chairman and co chief executive officer of Boston Omaha Corporation, a public holding company with business and advertising, insurance, broadband and number of other investments. Alex started Mac Mountain as a private Vermont business in an effort to build mobile broadband off of rural fiber networks. It quickly expanded, making investments into rural fiber ISPs and providing credit to municipal fiber providers and fiber builders. Alex also serves on the board of directors of Sky Harbor Group and Dura Software outside of the business. Alex spends time working with Doris Buffett Legacy foundation, which is piloting a program called designed to help bring broadband to unserved communities. Alex graduated from University of North Carolina, Chapel Hill. That always pains me to say that. They BS in biology and minored in chemistry. Alex, I'm a big rival of that since I was at the other end of 5501.

Alex Rozek: I've heard of that school. No.

Gary: But anyway, welcome Alex and Mike and Jase. And for audience, put your questions in the chat as we go and let's kick things off. So Alex, before we jump into whole credit and performance bonding, can you tell us a little bit about you and share a little bit about Boston Omaha Corporation and why you're so passionate about getting broadband to rural Vermont.

Alex: Yeah, thanks very much, Gary. Thanks for having me here. So quick background, sort of have a couple different hats that I wear. But as co-CEO of Boston Omaha Corporation, as earlier mentioned, we have business in both broadband where we're building fiber last mile, mostly residential networks across the country. It's actually a collection of about four different companies that mostly focus on greenfield builds, working with developers and home builders. We also have, just by accident, not by design, a nationwide monoline surety insurance business that writes performance bonds for all types of different construction and other projects. And obviously connecting the dots now, it seems sort of fortuitous that we have the only company that I'm aware of, certainly the only public company in the country that does both performance bonding and has an affiliate fiber broadband business attached to it. So we have, I believe, a unique perspective on the business, the unit economics of fiber to the home networks. We believe strongly it will be a utility, very much like a utility. It sort of already is. I mean, we build homes, thousands of homes, so that people walk into their brand new home day one, and they have symmetric gig service or higher. And so we understand the importance of that.

Alex: And what brought me, you see me here today, I'm in my barn. I live in Woodstock, Vermont. Boston, Omaha, by the way, there's nothing great behind the name. I was the Boston. My partner is the Omaha. He lived there. I lived in Boston. When I moved to Vermont back in 2018 we had DSL, which was not even adequate for checking email. So I would spend my afternoons when we were here at the library, where they had a semi decent connection. What I observed happening here that got me really interested is that in a rural, mountainous country like Vermont, a group of people got together in an unserved area before BEAD was ever a law or in any kind of legislation, and they built 30 plus thousand passing 10,000 network without a dollar of BEAD and with all municipal financing. And I was so interested in it that because we were doing this in our normal day jobs at Boston Omaha, I remember looking at the per passing cost, thinking, how could they ever make this happen? It's over $6000 per passing. We wouldn't even come near a project at the company on that. It's just the economics are nearly impossible. And yet here I am talking to you over on all fiber connection in Woodstock, Vermont. And they are thriving, and not only thriving, but solidly profitable, and have financed entirely with revenue bonds.

Alex: So I joined, as every town can have three members, two alternates, and one voting member join what's called in Vermont a communication union district, which is essentially a municipal district that bands together and builds this infrastructure. And I was on that board for about three years, and I learned a lot. And I was so impressed with the people there, what they were able to accomplish, how they used every different type of thoughtful financing available to accomplish the goal. And they accomplished it beautifully. And I was inspired to say, Well, if it could happen here, it could happen a lot of different places. And sure, there are a lot of lessons to be learned along the way. And Mac Mountain was started with the attempt to build some mobile broadband off of the network, because once I could use internet at home, I wanted my cellphone to work, and so did a lot of other people that live in Vermont. It's pretty simple. And then one thing led to another, and we started seeing opportunities to invest in rural ISPs who are excellent performers, who understand their communities. And that led to municipal credit opportunities, which is why I'm here today.

Alex: And the purpose of talking to Gary and Jase is that I think we've all arrived at the same opportunity set, that there are going to be a historic amount of broadband communities built across the country, particularly BEAD financing. It's exciting to be a part of, it feels like 100 years ago, probably felt, when electrification was coming to these same communities. And to be a part of it and to help in a small way bridge that gap. And the two items that I think are going to be of particular use to do that are structured credit and performance bonding. So that's, sorry, a long winded way of how I got here and why I'm sitting in this barn. But I mean, if I could sit in the barn and have fiber, just about anybody can.

Gary: That's awesome. Alex, I think you had prepared some slides. Did you want to go through your.

Alex: Yeah. Yeah, sure. Do I put those up or do...

Gary: Casey is gonna that for you.

Alex: Okay.

Jase Wilson: I think what we'll do is we'll do the recap first, y'all, if it's cool. And then Alex will have you kind of do the close up crew on this thing. Is that all right with everybody? 

Alex: Absolutely. Yeah.

Jase: All right. So, Alex, thank you so much for joining. Gary, thank you for hosting all of these. And the Fiber Broadband Association crew really appreciate the opportunity to get to connect with folks. And thank you, everybody that's in the audience today. And all you're doing to get families connected. I know that it's a lot of hard work. This has been a pretty crazy year, 2023 for a lot of folks, but 2024 is going to be even crazier and it's going to be, in our view, the year of BEAD. And it's really awesome to get to work with folks like Gary and with Alex and my co founder Mike Faloon. Mikey Faloon is Jimmy Fallon's cousin. You heard it here. But to help folks in the Ready crew make sure we have everything that we need for folks that are applying for BEAD to get their share of it. If they're going to apply for BEAD, they need to have not just the data driven answers, but also the matching funds. And critically, if they're not going to get a letter of credit, they need performance bonds.

Jase: I want to say shout out too the folks that have contributed knowledge to this show. There have been 12, this is the 12th episode. Gary's appeared in all of them. Gary Bolton is in the credits. Evan Feinman from NTIA did an amazing talk. If you haven't had a chance, folks, go back and check that one out. It's just absolutely chock full of deep insights about matching funds and interesting things. Dave Hartin from ITC. Thank you. Brian Vo and Jochai Ben-Avie of Connect Humanity. Thank you, guys. Phil Macres, I don't know how to pronounce your last name, man. I've seen you all over the place and you do so many amazing things, but I'm pretty sure it's Makers. Liz Bowles and Pierce Verchick, on that show you got together with Gary and sort of rattled through the problems of letter of credit and that was in a big way a part of the prompting of what you all did to get folks to change their minds at NTIA. So well done. Chris Perlitz and Municipal Capital Markets Group. If you haven't checked out those episodes and if you haven't really started to grok how municipal finance can be part of your capital stack, definitely check that out.

Jase: Darren Farnan of United Fiber, the Rural Electric Cooperative, they just passed 30,000 plus members doing all kinds of amazing things. Brad Powell and Jack from Amperage Infrastructure, wonderful contributions there. Joe Valandra and the Tribal Ready crew. That was awesome. And then Alex, it's good to hang out with you. Folks, if you haven't had a chance to check those out, you can go to There's a full recap and we're working on making sure that you have everything that you need to sort of summarize all of those amazing inputs.

Jase: But some of the keys that we really want to make sure that folks walk away from the series with and head into the year of BEAD with is, first of all, that performance bonds thing that happened with Phil and Liz Bowles and Gigi Jones and everybody, extremely well done there. It's much easier for y'all to get performance bonds from folks like Alex's [0:11:45.7] ____ here than it is to get a letter of credit. At the beginning of last year, this year, when we started this series with y'all, it wasn't clear whether credit was going to play a key role in matching funds. But now, as the year sort of wound on, there's more guidance from NTIA and the credit markets have shifted a bit. Those definitely signal that credit is a massive part of what you can do. And Alex has a really interesting set of solutions for you as well. The in-kind contributions, though, if you haven't watched the Evan Feinman WTF, make sure you watch the Evan Feinman WTF.

Jase: Gary and Evan surface some really interesting nuances about things that you can and things that you cannot count towards matching funds. You can count your right of way, and if you can value your right of way, you can count your equipment. That opens up opportunities like synthetic balance sheet from equipment vendors. You can say, we're going to put the first two years of service for free. And even in many states make the case that that's a matching fund contribution. But per Evan, you cannot count your oil paintings. And we all know, your art school nephew is like the next Picasso, but those don't count towards... You should probably hang on to those anyway.

Jase: And then it's going to be key, as you heard throughout the series, to automate your reporting and compliance and to make sure that every one of your stakeholders, including your matching funds providers, your performance bond providers, your state that you're working with, and any partners that you're partnering up with are all on the same page. And it's important that you all remember to stay in the fog of BEAD implementation as BEAD fog starts to set in.

Jase: Congratulations, Louisiana. And everybody from the crew of the Connect LA office, Denise Thomas, and then the NTIA for getting the first of the plans fully approved and locked and loaded. So it's now starting to roll go time. As that fog rolls in, the message that you're always going to hear from us at Ready is that you need to be data driven. You need to make sure that you're making objective decisions. If you're a provider and you're looking where to apply, you need to know sort of when and where you ought to grow. And reminder that we launched that product. It's available to you all. If you haven't registered and enrolled already, I know many of you are already enrolled.

Jase: There's over 3000 applicants at the starting line for BEAD in that system seeking north of $30 billion covering 50 states and four of the territories. And the intention there is everything that you need in a single place. Like the data driven answers and insights that you're going to need. The matching funds, components, performance bonds, all the data that you need to include inviting your team and doing geospatial analysis and then even getting the PE sign offs that you're going to need to go through the BEAD process. It's all there.

Jase: Make sure no matter what, if you're going after your share of BEAD, you all, that you build really bulletproof, defensible answers and that you're working closely with your state and your matching funds providers, make sure you get some options on the table. But I think you're going to hear from a really amazing option here in a few minutes when I shut up. And also you'll start to see more and more of Ready behind the scenes, proudly power over 20 state broadband offices now in their deployment of the BEAD program and the challenge process coordination. It's really awesome to get to do that. So whether you're using or not, just remember us and reach out if there's anything we can do to help you all. And then shout out to Lori Adams for this wonderful reminder that there's not enough time.

Jase: Okay, so in this case, what we're looking at is the fact that, okay, yeah, Louisiana's BEAD implementation and application period will start in earnest in just a few weeks and then other states will be following suit and that's great. But for most applicants, you've got about a six month worth of work that you got to be doing ahead of submitting the application, including getting your matching funds lined up, including getting your performance bonds lined up. And you might say, Well, that's crazy because my state hasn't even finalized its volume two and you would be right. But there's that adage about building the plane while you fly it. And you as an applicant really need to start and think of that mindset if you're going to go after your share of BEAD. And you need to remember that if you're not going to go after your share of BEAD, somebody is going to go after it. It's your share. If you're a small, local and nontraditional provider, it's your share. You got to step up and do this.

Jase: But luckily for you, there's one place where you can do all that stuff with the application tools, the matching funds, performance bonds, and even the reporting and compliance automation that you can focus on the real job to be done, which is connecting families to better broadband. Don't take that stuff lightly. There's a lot of freaking what used to be paperwork that should be completely digital and should be mostly automated. BEAD is a very heavy program in this respect, as y'all know. So make sure to do that. Go get your tools. Y'all there's a technical difficulty. My co founder, Mike Faloon, Jimmy's cousin, was going to present this amazing set of insights on the updates to the credit market since the series began. I'm going to do my best. Mike Faloon.

Mike Faloon: All right. I'm Mike Faloon and I'm here to talk about credit.

Gary: Talking by his phone. He can't talk in my phone.

Jase: I don't think so. Yeah, maybe, Mike, dial in if you can, but...

Mike: I'll work on the back end.

Jase: The credit market has shifted quite a bit. Banks, maybe they weren't in such a great spot before when the series kicked off at the beginning of the year, but it became apparent that they're definitely not in a great spot and they are even harder up right now. What's really interesting though, is that sort of led to and contributed to the rise of private credit. And there are lots of really interesting private credit options that you can consider. And these are definitely really interesting options for you all to consider for your BEAD grants. We did a write up in mid year about the interesting trend of securitizing fiber assets and the sort of wave of securitized fiber deals that were coming forward. And since then, Mike has surfaced another set of many billion of dollars worth of fiber securitizations. And they're even in some of these deals, securitizing the subscribers. If you have a really good relationship and a software that can power the record of your subscriber and confirm that they're serviced, confirm that you have the right to build that subscriber and everything you can start to be creative about what you have as an asset but the point is there's a lot of great options.

Jase: And then up there at Vermont ECFiber amazing Vermont against that all kinds of precedents for the nation to study the ECFiber crew getting the first bond rating for revenue bonds. That's amazing. That's awesome. That's new and signals an oncoming interesting opportunity. So folks I'm going to turn it over to Alex but I do want to say it's really awesome that he's in a barn with fiber and as you get to know Alex it's really awesome to get to hang out with Alex. Definitely connect with him afterwards but we already kind of see him as the fiber cowboy and he doesn't like us to call him that but it's like y'all know the Cable Cowboy like John Malone and it's like Malone 2.0 and so it's really cool that Alex you're in a barn with fiber and I'd love to turn it over to you.

Alex: Thanks a lot, Jase. Appreciate it. Yeah well that's a lot to live up to obviously but is an exciting time and I think that makes the case to some extent of there's so much to be created and so many creative options available that sort of walkthrough that Jase just did and where you've seen traditional financing maybe not be available. Usually when you think of getting a loan you go to a bank but for a whole host of different reasons interest rates regulations it's very very difficult if not impossible for banks to finance early stage fiber construction projects especially ones where materials design make ready are really the stage that the particular business is in or the municipality. And so it's just become prohibitively expensive for the banks to do that and that's another big reason why private credit and BEAD bonding have such a huge role to play.

Alex: So this slide was really just to illustrate what I think most people that are watching this know that both the matching funds if you were to have a theoretical $100 million project cost the matching funds and the letter of credit could be prohibitively expensive from a use of capital perspective. Surety bonds, let me talk about that first. Our surety business at Boston Omaha it's really interesting.

Alex: People are not usually familiar with surety. It's the only type of property and casualty insurance where you have three parties. You have the surety who's providing the guarantee in effect for something to happen. You have the principal who is required to get the surety and you have the obligee who's requiring the principal to get the surety. So you have this three party system and the whole purpose is that if a project doesn't happen for one reason or another the surety is there to provide the financial guarantee through the insurance or to find an alternative provider to complete the project.

Alex: And every type of project you can imagine is bonded in one way or the other private and public and is done in normal course all the time. So back in earlier this fall when I saw the letter go to the NTIA with 300 people signed on, a number from Vermont as well, asking for performance bonds in lieu of a letter of credit I immediately called Dave Herman as I hope you all do as well at some point down the road and you'll be able to do it through and said, Look this is a huge opportunity. We're the only surety in the country... We're the only public surety company for sure but probably the only surety business nationwide who also is in the broadband business. And we understand broadband builds. We understand how much capital it takes, we understand the timing of the construction, we understand the performance completion and we'll get to a slide later that shows NTIA understands that too.

Alex: And I think the options for BEAD bonding really just come down to capital efficiency rather than tying up a significant amount of money in a bank for a letter of credit or tying it up all in matching funds, you can pay a fraction of that as the premium for the bond. And even then if you have a surety that understands how these projects work you can break the pieces of the project up into pieces so that your overall amount of bonding is smaller and the cost to you is smaller. And again I can't say this enough the fact that something like exists allows this to happen because you need accurate reporting on projects and the status of the projects to make sure that you're moving through the different stages for bonding.

Alex: Credit is switching to credit. It's Mac Mountain, it's the private business. We have done private ISP financing and just to take it exactly what we've already done so it's not in the theoretical, there was a private ISP up here building fiber both in Vermont and New Hampshire and Maine and we came to a investment with them that I don't think you could go to a bank and usually get a zero coupon revolving senior promissory note. I mean the point of that is not to sound complicated the point is we want it to fit the credit for what the project and the company needed and that's what I think I hope if nothing else besides knowing that that bonding is out there and knowing that credit is out there. If you leave here today watching this and wondering if there is credit out there I'm happy to tell you there is. I don't believe there's going to be any shortage of capital looking for opportunities in broadband infrastructure projects. But I think the limiting factor is going to be is how to structure it and are you working with a partner that understands broadband and are you working with tools that will allow you to really be the most efficient with your capital as possible? And if you're working with and if you're working with private credit who understands broadband or sureties that understand broadband you've checked all those boxes.

Alex: So I just want to also point out, this is just the tip of the iceberg of different things that are available to municipalities and what can you do if you're a municipality? That's on the next slide. I'm sitting here like I said in the barn, a proud happy customer, a resident of Woodstock and a proud customer of the central Vermont Telecommunications District which was known as ECFiber. And this isn't meant to provide you to study... This is all public information and you can pull it right off the website. You can actually see the most recent offering memorandum from their I think it was like a $7.5 million bond issuance they just did and it was just as Jase mentioned, it was just rated. It's the first municipal issue that's ever supported entirely by broadband revenues, not by any taxable authority but by the broadband revenues of the project. And this is ECFiber is tremendously... There's all the credit for the people in the community that have pulled this together from nothing to something like I said earlier with 30 plus thousand passings and 10,000 customers growing and cashflow positive solidly cashflow positive and growing and that's a great... And I will say done without $1 of BEAD.

Alex: So there are options out there and if you have the right tools you can go after them and you can build this can happen. This is to answer Gary's question early on this is what inspired me to even get involved in the first place of what if it could happen here it can pretty much happen everywhere. There's a couple more slides we want to go on talking about performance bonding too. I think the idea there is just that big picture. is a platform for many many different things but to the extent that it's a platform for performance bonding all the information that will need to be collected about a project the financials the business plan how it's executed what stages those execution are going to go in if it's aerial if it's underground if it... All these different attributes that create the conditions where you determine what your cost and your timing are going to be. If you're using a platform that has the automation and the detail that has I think you'll be in a position where you'll find yourself able to do performance bonding much easier and able to work with a partner like Boston Omaha which is, it's kind of our placeholder site right now until we get this up and running.

Alex: But really where we hope to find these tools will be on And hopefully it's just the press of a button so you don't have to reapply with all the same project financials business plan that if you're not using the platform you might have to apply again and fill these forms out. This is by the way what we liked at Boston Omaha about the opportunity and surety. Surety is the smallest of all the lines of property and casualty maybe like 6 billion of total premium out there a year. It's nothing like homeowners or auto or something like that. It's much smaller but it's still a lot of the business is built off of paperwork arduous paperwork that is duplicative difficult to measure difficult to maintain and update and refresh. And our entire business plan at Boston Omaha was to automate it and to make it easier for applicants and easier for obligees and principals that we don't have any special secret underwriting sauce or anything like that. It's just simply taking paper documentation making it more easily accessible and automate as much as we can and that's what we hope to bring to and hopefully to many projects that you'll look for bonding across the whole country.

Alex: One thing I just want to leave you with really quickly is that the NTIA has gone even further and say you may only need 10% of the actual performance bond if you adopt the reimbursement. And without going down all this detail I encourage additional conversations with Dave Herman is the president of our insurance business at Boston Omaha. He's deeply involved with this with both the Surety Bond Producers Association which is the producers and the SFAA which are the underwriters working hand in hand with NTIA to come up with the guidelines for this program. But the bottom line is capital efficiency and the more we can make the capital be available for building last mile fiber and rural fiber the more we'll build the faster the cashflow happens the more sustainable the projects are. So we look forward to working with you and please do reach out to Mac Mountain for credit and to BEAD Bonding and to for both.

Gary: Hey Alex so tell me how this works. So if someone wanted to take advantage of the new rules at NTIA and you go with the 10% performance bonds and you adopt the reimbursement then you're structured also to provide short-term credit to help them get to the reimbursement points? 

Alex: That's the plan. I think they go hand in hand in many regards. So we're talking to municipalities right now about providing bridge financing bridge financing to get to a point where BEAD could be a funding solution for these municipalities. Obviously Louisiana's got theirs approved but there's 49 other states right? So there's going to be... There are projects that have already started for different types of they received ARPA funds or maybe RDOF or CTAF or any different collection of different government funds in different areas. Maybe it was just appropriated by the state. In any case projects are going on right now and projects might anticipate receiving BEAD funding at some point but it's not guaranteed. But you can't stop your construction project. You can't rebid your construction contracts. You have the contractors out there right now building that need to know if they should keep building or they should move on and go building somewhere else. And that's both for performance bonding and for credit because the bottom line is the contractors are going to get paid and they should get paid.

Alex: And you need to as the municipal, the ISP, the private ISP or public ISP either one maintaining those projects making sure that you don't have to stop them and start them. Making sure that they're efficiently capitalized. I think... Amount of time. They're the ones that financed all of ECFiber. I mean they were the partners for this municipal communication union district and they could tell you that what usually goes wrong is too much money all at once or all at the beginning instead of staging it out. These are long-term projects. They require capital efficiency at all stages of the project. And so that's really what this performance bonding and credit is meant to do is to be a bridge and to the municipalities out there that are concerned wait a second it's going to be more expensive in the private markets than maybe the revenue bond. If you study the history of ECFiber it started with private credit from residents that just lived in the market. They put up the money they were paid back and ultimately it was refinanced cheaper and cheaper and cheaper as the project grew and the cash flows grew and the markets got more and more comfortable with the economics of the project.

Alex: That will happen everywhere too if it's solidly done and I can't stress enough to Jase's point we're looking on our public company too. Ultimately at the securitization market as many other ISPs are if you want to get anything securitized you have to have impeccable data down to every single subscriber to be able to place that into a securitization pool as the collateral. So starting now and thinking about what your project's going to be and how you ultimately want to reduce those costs. I think private credit is a great partner because we're fine getting taken out by a revenue bond. That's great. That's a good thing. It's the project... That means the project is evolving it's sustainable, it's producing cash flows it's going to work because then you could take that capital and go to another project that needs bridge financing and that's where we want to be partners is helping you think about that all the way through the project both in performance bonds and in private credit.

Gary: So our good friend Quinn from Mississippi is asking what is your BEAD bond covering and has NTIA given you the thumbs up that the bond will cover the risks that the letter of credit was intended to cover? 

Alex: My answer to that is stay tuned. These are as everything else Jase is right? This is the wild west these are the laws as we know and the rules are being written. Right now Dave Herman president of our insurance business and in real time. This week they're having meetings with NTIA to determine exactly what's on those bond forms exactly what's covered what's not. That's everything. I believe that NTIA is genuine in their interest in offering this as an alternative to the letter of credit for all the reasons outlined in that letter that ultimately was successful. I think it's important to get this done right. The answer is nobody knows yet but I also believe that it will get done and when it gets done come back to We will have that information available on our site. We'll be getting it through to everybody as soon as possible but we'll want to make it programmatic for applicants 'cause it's just one piece and a much bigger and a much bigger machine to get from no fiber to a complete fiber network for everybody.

Gary: All right, so basically everybody needs to be making sure that they're being capital efficient on these projects. Tying up money in a letter of credit doesn't make any sense. Try to leverage these new rules we have with NTIA, get the 10% bond, do some coverage on your short term to get to your reimbursements and then as you start to service your debt and get some revenue flowing, you redistribute this funding to the next guy. Is that the quick summary? 

Alex: That's right. And I'll say another excellent example of this is Maine Connect Authority which works in the state of Maine similarly to the Vermont Community Broadband Board in Vermont who's thinking about how to disperse federal money and what the guidelines are going to be has been very thoughtful about thinking about breaking projects up and then understanding how to know at what stage the project's in and then when to release funds of a grant when that stage is completed. This reimbursement, that 10% performance bond for states that adopt reimbursement, as you might imagine, reimbursement is going to be conditional upon the completion of that stage of the project. So if it's the design phase when is that done? Who makes sure that that's done then the funds are released then you could be released from that bond meaning you pay a lot less for that bond to cover that one particular stage, that's being capital efficient. Instead of bonding the entire project you can bond just that one phase then you would maybe do make ready, then you would do the installations.

Alex: And where Maine's very thoughtful about that is to the extent that they can be efficient and understanding that these projects are being done in these phases it'll make it a lot easier for the providers to then be capital efficient themselves. And I think if you have a state that's thinking very forward like that in Maine and Vermont, that's excellent. Many states are and I think one of the most forward-thinking things you can do is and I believe this wholeheartedly because we're excited to work with them is work with You need that automated reporting that how you would think about the project being broken up in stages and then to the best of your ability, limiting the time spending on being spent on filling out forms and knowing whether or not the project is compliant if you can do that over a platform. That just makes a lot of sense.

Gary: Alex, this is great stuff and very timely I mean it couldn't be more important. And as Jase says, I love seeing you in your barn. It just warms my heart to see that we're getting the nation connected with fiber. And Ben did a great job of putting together the recaps. If you wanted guys see previous episodes you can go in the chat there and you can see how to get there. I really appreciate it. And then big shout out to our buddy, Drew Clark, who did a full recap. He had a link to that so please check that out. So Alex thank you very much. Jase, any parting words? Unmute.

S?: You're muted. Just so you know.

Jase: Man, I'm going to get that tattooed on my forehead actually. Thank you, Gary Bear Bolton for all you did and Fiber Broadband Association for all you're doing to help fiber as a nation and folks that are on the call, thank you for making time. Alex, thank you for joining and for all you're doing to get all the pieces of the puzzle in place. If you have a couple extra minutes and folks have some more questions you can stick around. I know Gary probably you have to jet but just want to say thanks everybody and happy freaking end of 2023 and excited to see a lot of you in 2024 in the year of BEAD, so.

Gary: All right. Well, happy holidays and I'll let you guys continue the conversation.

Jase: I appreciate you Gary.

Alex: Thank you Gary.

Jase: So folks does anybody else have any questions before we go, just drop them in there. We'll leave one minute for you or raise your hand or something. Question from Quinn. Alex, are you working with NASBP and SFAA? 

Alex: That's right. Yep. National Association of Surety Bond Professionals represents the agents the producers and then the Surety and Fidelity Association of America is the underwriter. So we get all our underwriting information about... It's aggregated by them everyday. But yes those are the two organizations that Dave and Michelle are working with and many others by the way, just so you know. It's not just us. I think the chair is by the Liberty, [0:39:25.4] ____ the general counsel, I believe the Liberty. So sureties big and small are looking at it.

Jase: Awesome. That's great. Anybody else have any other questions before we go? All right, y'all. Thanks for joining and have a wonderful rest of your 2023. We'll see y'all very soon.