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. 

In this special webinar by Telecompetitor and Broadband.Money, Scott Woods, former NTIA executive with firsthand knowledge of the BEAD program process, shares his perspective on the most important details of the BEAD NOFO.

BEAD & Digital Equity Coordination Requirement

Eligible Entities should view this [BEAD] NOFO and the State Digital Equity Planning Grant NOFO holistically as complementary efforts aimed at a singular, unified objective of closing the digital divide.

The Five-Year Action Plan that an Eligible Entity develops for the BEAD Program should therefore incorporate the Eligible Entity’s State Digital Equity Plan, as an Eligible Entity cannot have a Five-Year Action Plan that does not address digital equity. Moreover, Initial Proposals and Final Proposals developed for the BEAD Program should be informed by and be complementary to and closely integrated with the Eligible Entity’s Five-Year Action Plans and State Digital Equity Plans to address the goal of universal broadband access and adoption…For example, Eligible Entities should ensure coordination between BEAD planning teams and State Digital Equity planning teams and should establish a formal and direct communication and collaboration pathway between the teams that remain in place throughout the entire planning process.

Five-Year Action Plan should set forth a vision for digital equity, include the results of a needs assessment for underrepresented communities and an asset

inventory of ongoing digital equity activities, and detail holistic strategies around affordability, devices, digital skills, technical support, and digital navigation.

Key Observations:

• Capacity Building to ensure effective coordination – How many states have both Broadband Strategic Plans and State Digital Equity Plans?
• Planning activities should be based on actionable data/information – who has access to this data/information and how will it be utilized?

Key Definitions:

1. Non-Traditional Broadband Provider—means an electric cooperative, nonprofit organization, public-private partnership, public or private utility, public utility district, Tribal entity, or local government (including any unit, subdivision, authority, or consortium of local governments) that provides or will provide broadband services.
2. Community Anchor Institution (CAI)—means an entity such as a school, library, health clinic, health center, hospital or other medical provider, public safety entity, institution of higher education, public housing organization, or community support organization that facilitates greater use of broadband service by vulnerable populations, including, but not limited to, low-income individuals, unemployed individuals, children, the incarcerated, and aged individuals. An Eligible Entity may propose to NTIA that additional types of institutions should qualify as CAIs within the entity’s territory.
3. Priority Broadband Project—means a project that will provision service via end-to-end fiber-optic facilities to each end-user premises. FN - A project that will rely entirely on fiber-optic technology to each end-user premises will ensure that the network built by the project can easily scale speeds over time to meet the evolving connectivity needs of households and businesses and support the deployment of 5G, successor wireless technologies, and other advanced services.
4. Digital Equity—means the condition in which individuals and communities have the information technology capacity that is needed for full participation in the society and economy of the United States. This definition more expansive than “Digital Inclusion & Adoption” and includes training for end-users, cybersecurity, telemedicine/telehealth, workforce and economic development activities.

Key Requirements of Five-Year Action Plan

Reliance on Data, Data, Data, Data – BEAD NOFO Section IV.B.3

Preparing a Five-Year Action Plan gives Eligible Entities the opportunity to identify their communities’ broadband access,  affordability, equity and adoption needs and to adopt strategies, goals and initial measures for meeting those needs using  BEAD and other funds. At a minimum, an Eligible Entity’s Five-Year Action Plan must address 13 core elements, including:

• Develop an asset inventory that catalogues broadband adoption, affordability, equity, access, and deployment activities Incorporate available federal, Eligible Entity, or local broadband availability and adoption data
• Identify local and regional broadband service needs and gaps, including unserved or underserved locations and CAIs without gigabit service
• Local Coordination Requirement & Outreach Documentation – BEAD NOFO Section IV.C.1.c.

The Five-Year Action Plan that an Eligible Entity develops for the BEAD Program should therefore incorporate the Eligible Entity’s State Digital Equity Plan, as an Eligible Entity cannot have a Five-Year Action Plan that does not address digital equity. Moreover, Initial Proposals and Final Proposals developed for the BEAD Program should be informed by and be complementary to and closely integrated with the Eligible Entity’s Five-Year Action Plans and State Digital Equity Plans to address the goal of universal broadband access and adoption…

Key Observations:

• Utilization of community organizations, including and especially the Faith-based community.
• All Stakeholders must be at the “Table” for pre-planning and planning activities.

Challenge Process

After submission of its Initial Proposal and before allocating BEAD funds received for the deployment of broadband networks to subgrantees, an Eligible Entity must conduct a challenge process. Under this process, a unit of local government, nonprofit organization, or broadband service provider can challenge a determination made by the Eligible Entity in the Initial Proposal as to whether a particular location or community anchor institution within the jurisdiction of the Eligible Entity is eligible for the grant funds, including whether a particular location is unserved or underserved, and Eligible Entities must submit any successful challenges to NTIA for review and approval.

Key Observations:

• Only ISPs, Non-Profits & local governments can challenge findings.
• Reliance on Empirical Data – some states have granular mapping and data information; some states do not.
• States Must Adopt a Clear, Transparent & Evidence-based Challenge Process – no uniformity on approach; what are the parameters, timelines, requirements for successful challenges?
• Utilization of most recently published version of the FCC’s Broadband DATA Maps at time of challenge process.
• NTIA’s Final Review & Approval Process – based on what? Timelines for approval? Appeal process? What data? NBAM?

“State’s” Failure to Participate

If an Eligible Entity fails to submit a covered application (i.e., a Letter of Intent,
Initial Proposal, or Final Proposal) by the applicable deadline or any subsequent
resubmission deadlines if revisions are needed, a political subdivision or consortium of political subdivisions of the Eligible Entity may submit the applicable type of covered application in place of the Eligible Entity. 

Key Observations:

1. Coordination with State Broadband Office – all stakeholders: Service Providers, local government, philanthropic organizations and community organizations.
2. Capacity of local government(s) to “provide” comprehensive proposals? Planning funds facilitate local activities?
3. Highly unlikely “opt-out” given the stakes, but this is a failsafe against politics, bureaucracy, incompetence, etc.

Matching Funds – 25% IS THE FLOOR NOT CEILING

…each Eligible Entity shall provide, require its subgrantee to provide, or provide in concert with its subgrantee, matching funds of not less than 25 percent of project costs…the Infrastructure Act expressly provides that matching funds for the BEAD Program may come from a federal regional commission or authority and from funds that were provided to an Eligible Entity or a subgrantee for the purpose of deploying broadband service under the Families First Coronavirus Response Act; the CARES Act; the Consolidated Appropriations Act, 2021; or the American Rescue Plan Act of 2021, to the extent permitted by those laws.

Eligible Entities should rigorously explore ways to cover a project’s cost with contributions outside of the BEAD program funding. Matching contributions, including in-kind contributions that lower project costs, demonstrate commitment to a particular project and minimize BEAD funding outlay, extend the reach of the BEAD program funding and help to ensure that every unserved location and underserved location in the United States has access to reliable, affordable, high-speed internet. In some cases, though, a match requirement could  WILL deter  participation in the BEAD Program by small and non-traditional providers, in marginalized or low-income communities, or could threaten affordability.  In those cases, an Eligible Entity should consider ways to cover part or all of the provider’s match through Eligible Entity or other funds or seek a match waiver…

A matching contribution may be provided by the subgrantee, an Eligible Entity, a unit of local government, a utility company, a cooperative, a nonprofit or philanthropic organization, a for- profit company, regional planning or governmental organization, a federal regional commission or authority, or any combination thereof – i.e., any project partner.

NTIA Stated Preference for Maximum Subgrantee Contribution and Minimal BEAD Subsidy

While the match may be provided by multiple sources, Eligible Entities are encouraged to require a match from the subgrantee rather than utilizing other sources where it deems the subgrantee capable of providing matching funds. This approach will maximize the impact of Eligible Entity funds and funds provided via other federal programs…Eligible Entities are also required to incentivize matches of greater than 25 percent from subgrantees wherever feasible (especially where expected operational costs and revenues are likely to justify greater investment by the subgrantee) by focusing on minimizing the BEAD funding outlay on a particular project, to the extent consistent with other programmatic goals described in this NOFO.

Key Observations:

1. Negative impact on small, non-traditional, disadvantaged/minority-owned service providers unless Match is waived; but not penalized for requesting a match waiver. High-cost areas may be an exception.
2. Projects/subgrantees that directly contribute greater than 25% match are encouraged to receive extra credit, consideration, scoring – see prioritization for last mile selection.

Letter of Credit Requirement

Each Eligible Entity shall establish a model letter of credit substantially similar to the model letter of credit 
established by the Commission in connection with the Rural Digital Opportunity Fund (RDOF).

During the application process, prospective subgrantees shall be required to submit a letter from a bank that meets eligibilit requirements consistent with those set forth in 47 C.F.R. § 54.804(c)(2) committing to issue an irrevocable standby letter of credit, in the required form, to the prospective subgrantee. The letter shall at a minimum provide the dollar amount of the letter of credit and the issuing bank’s agreement to follow the terms and conditions of the Eligible Entity’s model letter of credit.

Prior to entering into any subgrantee agreement, each prospective subgrantee shall obtain an irrevocable standby letter of credit, which shall be acceptable in all respects to the Eligible Entity and in a value of no less than 25 percent of the subaward amount. Eligible Entities may adopt rules under which a subgrantee may obtain a new letter of credit or renew its existing letter of credit so that it is valued at a lesser amount than originally required by the Eligible Entity upon verification that the subgrantee has met optional or required service milestones. In no event, however, shall the letter of credit have a value of less than 25 percent of the subaward amount.

Key Observations:

• Negatively impact small providers, especially minority-owned service providers – historical/systemic “redlining” issues.
• Also defeats the purpose of the match-waiver provision; rendering such waiver provision useless.

Local Coordination Efforts Will Require NTIA Approval

NTIA will evaluate and approve plans that include: 

1. Full geographic coverage;
2. Meaningful engagement and outreach to diverse stakeholder groups, labor organizations, and community organizations, including to promote the recruitment of women and other historically marginalized populations for workforce development opportunities and jobs related to BEAD-funded eligible activities;
3. Utilization of multiple awareness and participation mechanisms and different methods to convey information and outreach;
4. Transparency of processes, to include the documentation and publication of results and outcomes of such coordination and outreach efforts, including additions or changes to the Eligible Entity’s Initial Proposal and/or Final Proposal; and
5. Outreach to and direct engagement of unserved and underserved communities to include historically underrepresented and marginalized groups and/or communities. In evaluating the sufficiency of local coordination efforts, [NTIA] will consider quantitative measures as well as the quality of the engagements.

The requirements of this section are critical to ensuring that Eligible Entities are coordinating with all communities, including their marginalized and underrepresented populations.

Subgrantee Reporting Requirements

The recipient of a subgrant from an Eligible Entity under this Section shall submit to the Eligible Entity a regular reporting, at least semiannually, for the duration of the subgrant to track the effectiveness of the use of funds provided. Each report shall describe each type of project and/or other eligible activities carried out using the subgrant and the duration of the subgrant. Eligible Entities may add additional reporting requirements or increase the frequency of reporting with the approval of the Assistant Secretary and must make all subgrantee reports available to NTIA upon request. In the case of a broadband infrastructure project, the report must, at minimum: 

1. Include a list of addresses or location identifications (including the Broadband Serviceable Location Fabric established under 47 U.S.C. 642(b)(1)(B)) that constitute the service locations that will be served by the broadband infrastructure to be constructed and the status of each project;
2. Identify new locations served within each project area at the relevant reporting intervals, and service taken (if applicable);
3. Identify whether each address or location is residential, commercial, or a community anchor institution;
4. Describe the types of facilities that have been constructed and installed;
5. Describe the peak and off-peak actual speeds of the broadband service being offered;
6. Describe the maximum advertised speed of the broadband service being offered;
   Describe the non-promotional prices, including any associated fees, charged for different tiers of broadband service being offered;
   List all interconnection agreements that were requested, and their current status;
7. Report the number and amount of contracts and subcontracts awarded by the subgrantee disaggregated by recipients of each such contract or subcontracts that are MBEs or WBEs; to be constructed and the status of each project;
8. Include any other data that would be required to comply with the data and mapping collection standards of the Commission under Section 1.7004 of title 47, Code of Federal Regulations, or any successor regulation, for broadband infrastructure projects;
   1. Note there are additional requirements 11-14

Additional Themes - Data & Tracking Elements

Submission of Initial Proposal:

• Describe the process, strategy, and data tracking method(s) that the Eligible Entity will implement to ensure that minority businesses, women-owned business enterprises, and labor surplus area firms are recruited, used, and retained when possible.
• Identify steps that the Eligible Entity will take to reduce costs and barriers to deployment, promote the use of existing infrastructure, promote and adopt dig-once policies, streamlined permitting processes and cost-effective access to poles, conduits, easements, and rights of way, including the imposition of reasonable access requirements.

Subgrantee Selection Process: Fair, Open, Competitive & Transparent Process

• Each Eligible Entity must establish fair, open, and competitive processes for selecting subgrantees; provided the subgrantees meet minimal qualifications in Section IV.D.

Prioritization and Scoring Selection Among Competing Last-Mile Proposals:

• Primary Criteria: Minimal BEAD Outlay; Affordability (subgrantee’s commitment not actual price); Fair Labor Practices
• Secondary Criterion: Speed to Deployment
• Additional Criteria: Equitable Workforce Development and Job Quality; Open Access; Local and Tribal Coordination