The National Telecommunications and Information Administration (NTIA) this week released a Policy Notice regarding the federal government’s framework for grants management in relation to the $42.5 billion Broadband Equity, Access and Deployment (BEAD) program.
This framework is referred to as Uniform Guidance, which provides rules and requirements for federal financial assistance awards and subawards. The NTIA had requested public comment on how it should adjust Uniform Guidance for the BEAD program.
State broadband offices and industry stakeholders encouraged the NTIA to align BEAD grant program rules with the U.S. Department of Treasury’s grant requirements, said the NTIA in its press release. The Treasury Department oversees the Capital Projects Fund and the Coronavirus State and Local Fiscal Recovery Funds program.
The NTIA outlined four key changes to BEAD grant program guidance. First, it’s providing flexibility for program income, or earned income “that is directly generated by a supported activity or earned as a result of the Federal award during the period of performance.”
Per the Policy Notice, ISPs will be able to use program income from BEAD-funded projects “without restriction,” and states will not be required to track the program income of subrecipients.
In an effort to reduce administrative costs for ISPs and state broadband offices, the NTIA will allow stakeholders to “leverage the efficiencies of fixed amount subgrants” in broadband infrastructure projects.
This is notable because under the standard Uniform Guidance, fixed amount awards (grant agreements that provide a specific level of support without regard to actual costs incurred) “generally cannot be used in programs that require mandatory cost sharing or match.” Also, fixed amount awards cannot exceed $250,000.
Now, the NTIA will allow subrecipients (i.e., the states) to issue fixed amount awards “without further NTIA approval,” as long as the majority of the award goes to a broadband infrastructure project.
Subrecipients can also issue these awards “regardless of whether the value of the sub-award exceeds $250,000.”
The new guidance will also allow ISPs to upgrade the equipment in their BEAD-funded networks without first obtaining the NTIA’s approval.
Further, BEAD-funded networks will be subject to a 10-year federal interest period after a network is constructed. That interest encompasses “all real property or equipment acquired or improved as part of a subgrant for which the major purpose is a broadband infrastructure project.”
One key difference remains between the NTIA’s BEAD grant rules and the Treasury’s grant program requirements. The Treasury Department lets states and localities decide how to structure financial agreements with service providers, whereas BEAD requires states to structure agreements with ISPs as “subgrants.”
“If these financial agreements were structured as contracts, a more limited set of the Uniform Guidance regulations would apply to these providers,” said the NTIA.
Industry response
A number of industry groups issued statements responding to the NTIA’s guidance, and in general commended the agency’s efforts.
Shirley Bloomfield, CEO of NTCA–The Rural Broadband Association, said NTCA appreciates the NTIA’s efforts to “seek to strike a reasonable balance between promoting accountability in the use of BEAD funds and flexibility that should promote greater participation in the program.”
USTelecom President and CEO Jonathan Spalter commented “waiving burdensome requirements” will bolster BEAD participation and ensure federal funds are more efficiently used.
“Getting the details right matters, and today’s action by NTIA is a positive step towards streamlining the broadband deployment process for providers and consumers alike,” he said.
ACA Connects President Grant Spellmeyer added the NTIA’s guidance “adopts exemptions and modifications to the requirements that will encourage participation by ACA Connects Members and other broadband providers, leading to more cost-effective deployments.”