Broadband funding really got rolling in 2023, as the federal government began the process of its $42.5 billion Broadband Equity, Access and Deployment (BEAD) program. Today’s the deadline for states and territories to submit initial proposals to the National Telecommunications & Information Administration (NTIA), detailing how they plan to run their grant program.
Here's a rundown of this year’s pivotal points of BEAD.
NTIA gives guidance
To help states and territories with their challenge process, the NTIA in April released draft guidance that expands upon the agency’s Notice of Funding Opportunity (NOFO) issued in May 2022.
The NTIA explained how long states have to complete their challenge process, as well as the phases of the challenge process for each location. The guidance also outlined ways for eligible entities (i.e., states and territories) to challenge locations on the Federal Communications Commission’s (FCC) national broadband map.
The map is important because the NTIA used its data to calculate BEAD allocations. The FCC published its second iteration of the map at the end of May, about a month before the White House unveiled how much money each state received.
States got their BEAD allocations
The states that came away with the highest amount of BEAD funding were Texas ($3.31 billion), California ($1.86 billion), Missouri ($1.74 billion), Michigan ($1.56 billion) and North Carolina ($1.53 billion).
States that received less BEAD money were generally those with smaller land masses, like Connecticut ($144.2 million), Delaware ($107.8 million), Massachusetts ($147.4 million) and Vermont (~$229 million).
The NTIA’s complete allocations list includes U.S. territories American Samoa, Guam, Northern Mariana Islands, Puerto Rico and the U.S. Virgin Islands.
Interestingly, Alaska was the biggest winner from a per capita basis, Fiber Broadband Association President Gary Bolton told Fierce in June. The state received over a billion dollars with a population just over 700,000.
But PwC’s Dan Hays pointed out some “significant disparities” with the BEAD allocations, particularly with how much money the NTIA awarded to territories.
Households in the Northern Mariana Islands, for instance, “effectively got a $7,000 subsidy, whether they have broadband already or not,” Hays said in July.
Naturally, the BEAD funds come with some strings attached. One of which is the Build America, Buy America Act (BABA), which requires that fiber networks funded by BEAD must use components that are at least 55% made in America.
The NTIA, in response to industry criticism that it’s difficult to source some components in the U.S., proposed in August some waivers for BEAD recipients.
Interestingly, the NTIA did not offer any waivers for optical line terminals (OLTs) or Optical Network Terminals (ONTs). The agency opened a public comment period for the waivers until September 21, but it has yet to approve them.
In November, the NTIA released a waiver for BEAD’s letter of credit (LOC) requirement. The LOC rule stipulates applicants must provide a letter of credit from a bank as evidence that they have at least 25% of the grant dollar amount in a cash bank account.
Prior to the NTIA’s waiver, industry groups and regional ISPs called on the agency to allow alternatives for the LOC requirement, arguing the existing rule hinders small and community-centered ISPs – like municipalities – from participating in BEAD.
The so-called programmatic waiver outlines four alternatives to the LOC, including the option of a performance bond or to get the LOC from a credit union instead, which typically offers lower interest rates.
Approval for initial proposals underway
The NTIA has given states and territories until December 27 to submit initial proposals, which consist of two volumes. Volume 1 should outline the entity’s challenge process, whereas Volume 2 covers the remainder of the implementation plan as outlined in the BEAD NOFO.
According to the NTIA’s public dashboard – as of December 20 – Louisiana is the first state to snag approval for Volume 2 of its initial proposal, meaning it can now request access to at least 20% of its BEAD allocation.
The dashboard notes whether the NTIA has approved each volume, but initial proposals do not need approval before the December 27 deadline. 35 states and territories so far have submitted Volume 1 for approval, whereas 20 have already submitted Volume 2.
Curious about each state’s BEAD plans? Check out our state broadband coverage to learn more.