The NTIA kicked off the Labor Day holiday weekend with the news that it will free up leftover BEAD funds for another round of bidding to reach remaining unserved locations. In response, the nation’s electric cooperatives are asking for a “course correction” with the next phase of the program.
“BEAD’s initial investment is failing rural America,” said Jim Matheson, CEO of the National Rural Electric Cooperative Association (NRECA), in a statement released to the media on Friday (September 4).
“Delayed implementation, shifting guidance, cost constraints and unrealistic funding assumptions have slowed progress, discouraged participation and weakened a historic opportunity to bring long-overdue broadband service to rural communities. Directing further investment under the same misguided approach will not deliver universal connectivity to rural America,” Matheson added.
Matheson’s statement is not the first time NRECA and its members have expressed dissatisfaction with the current direction of BEAD. The group held a press conference in June to raise concerns about BEAD losing its fiber preference and about new pole attachment regulations imposed on co-ops. Some members – including Colorado’s Delta-Montrose Electric – said the NTIA’s BEAD rules led them to decline their BEAD awards.
Course, and cost, correction
Now, NRECA – which represents 900 electric co-ops nationwide, including 200 that currently deliver broadband service – is looking to push back on the current direction of the program as the NTIA makes more funding available to states and territories for additional bidding.
“NTIA must allow flexibility for cost increases created by program delays, align funding levels with the actual cost of deploying broadband infrastructure in America’s hardest-to-reach communities and remove fatally flawed pole attachment rules that clearly break from long-standing federal policy,” added Matheson in his statement.
On the subject of costs, it is as yet unclear just how flexible the NTIA might be in this supplemental round, after revising the rules of the original $42.5 billion BEAD program to award the lowest-cost-to-deploy technologies. That resulted in $21 billion going toward broadband deployment after the initial round of bids, with fewer locations receiving BEAD-funded fiber and more receiving low-Earth orbit (LEO) satellite service than the program originally envisioned.
In its updated guidance released last week, the NTIA indicated it will maintain that approach as it opens up additional funding, saying it will “determine an upper limit of funding to release to each Eligible Entity” (or state/territory) which will be “based upon the average cost of serving a [location] under the Eligible Entity’s approved Final Proposal and the number of additional unserved locations.”
The NTIA did say that if costs exceed that threshold, then states and territories “may seek a waiver to access additional funds based upon a demonstration of extraordinary circumstances.”
However, the notice added: “Any waiver request must demonstrate that the Eligible Entity has fully considered all available options, including the most cost-effective technologies, to remain within its established amount.”
Even more funding for satellite?
Whether the directive that states must still consider “the most cost-effective technologies” will result in even more funding going to LEO satellite providers like Elon Musk’s Starlink remains to be seen and will certainly keep some in the industry on their toes as this second round takes shape.
In its own statement in response to the NTIA’s supplemental funding round notice, the Fiber Broadband Association (FBA) applauded the news about more funding, while pushing for more of it to go to fiber and indicating it will closely collaborate with states on next steps.
“NTIA’s decision to prioritize a cleanup round aimed at reaching locations that still lack reliable broadband service should be applauded,” said FBA in a media statement, noting that “these investments should prioritize fiber, wherever possible, along with experienced providers that have the financial strength and operational capacity to serve their full project areas successfully.”
The group added that it is looking forward to “reviewing the additional components of NTIA’s approach as they are announced and ensuring every available dollar delivers meaningful and lasting connectivity.”
