A massive coalition of more than 300 broadband policy experts and organizations have written a letter to the U.S. government, warning that smaller broadband providers, nonprofits, and municipalities will be elbowed out of an historic $42.45 billion broadband grant program without some notable changes to program rules.

At the heart of their concerns sits the Broadband Equity Access and Deployment (BEAD) program, made possible by the recently passed infrastructure bill, and administered by the National Telecommunications and Information Administration (NTIA). The grant program is a once-in-a-lifetime opportunity to put a significant dent in America’s longstanding digital divide.

But BEAD program rules currently require grant recipients to obtain a letter of credit (LOC) from a bank, collateralized by cash or cash-equivalent. They also require grant winners to provide "matching funds of not less than 25 percent of project costs," though the latter restriction can be waived in some high deployment cost areas.

While the restrictions were intended to reduce the risk of project failure (a touchy subject for the government in the wake of problems with the FCC’s RDOF program), they require grant recipients to lock away vast and untouchable sums of capital for the duration of any broadband build, most of which last several years.

According to the coalition’s letter to lawmakers, such requirements present unnecessary obstacles for smaller ISPs and cash-strapped municipalities, undermining the infrastructure bill’s goal of equitable, affordable broadband for all.

The key for states to unlock their portion of the $42.5 billion in federal BEAD funds is the submission and approval of their Five Year Action Plans and Final Proposal. The infrastructure law requires states to first file an action plan, and then prepare more detailed Initial Proposals, allowing residents and stakeholders to submit public comments.

So far, 14 states have filed their Five Year Action Plans with the National Telecommunications and Information Administration (NTIA), the Treasury Department agency in charge of allocating the funds to each state and U.S. territory. According to the NTIA’s website, Maine, Louisiana, Delaware, Georgia, Hawaii, Idaho, Kansas, Montana, North Carolina, Ohio, Oregon, Pennsylvania, Utah, and Vermont have all filed their draft Five Year Action Plans.

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The states that are now in the process of completing their Initial Proposals include: Delaware, Kansas, Louisiana, Montana, Ohio, Tennessee, Vermont, Virginia and Wyoming.

Today, we will look at two states (Maine and Louisiana) and follow up with the others as we are getting a clearer picture of how each state intends to put this historic infusion of federal funds to use.

Maine

Data unsurprisingly ranks remote Alaska dead last when it comes to the availability of affordable broadband. That’s particularly true in areas like Bristol Bay, an area the FCC’s updated broadband maps suggests lacks access almost entirely. But as with most underserved regions, local cooperatives are at the forefront of efforts to finally address the problem.

Launched in 1975, the member-owned Nushagak Electric & Telephone Cooperative, based in Dillingham, Alaska, offers locals broadband access through microwave towers; often the only way to provide service across Alaska’s rugged landscape. But the co-op, which also offers a electric, telephone, and cable TV service, says it’s on the cusp of new fiber deployments that should finally bring next-generation speeds to a chunk of the co-op’s members.

The co-op has been working since 2021 on a $22.4 million plan to expand more reliable fiber to the region. The project is partially funded by the USDA ReConnect program as well as $6.5 million in term loan money from the National Rural Utilities Cooperative Finance Corporation. The cooperative will also use $784,000 of its own money to get the project underway.

As a young woman of the Nuxalk Nation, Mallory Hans is “clearing a path for future generations.”

A 2022 graduate of the British Columbia Institute of Technology, she’s one of about 50 people hailing from various Tribes and First Nations across North America in attendance for the latest Tribal Broadband Bootcamp, a three-day intensive learning experience focused on building and running Tribal Internet networks.

Held in different tribal regions several times a year since the initiative began in 2021, this bootcamp (the eighth in an ongoing series of hands-on seminars) is being hosted at the Akwesasne Mohawk Casino Resort on the Saint Regis Mohawk reservation along the New York/Canada border.

“So far so good,” Mallory said on Day Two of the bootcamp just as the attendees broke into small groups to go through a variety of demonstration stations set up by bootcamp instructors and Tribal employees who run Mohawk Networks, which provides fiber-to-the-home (FTTH) Internet, video, and voice services across the reservation in northern New York.

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In continuing the driving impulse to demystify technologies and build capacity among cohorts in Tribal nations, Day Two was centered around fiber stations that included demonstrations of how network operation centers are run; one on fiber splicing; another showcasing equipment used to install fiber inside of households with representatives from Calix, and another station on the electronic equipment that measures the performance of fiber lines.

“I’m enjoying it, feeling more confident and finding out I’m capable,” said the 22 year-old, newly minted fiber technician.

It was a big week for ECFiber as Vermont’s first – and oldest – Communication Union District (CUD) celebrated lighting up the last hub of its 1,500 mile-network in White River Junction.

To mark the occasion of connecting the “golden patch cord” that will extend high-speed Internet service to eight more communities in the Upper Valley region, White River Junction’s VFW Hall was packed this past Tuesday with CUD officials, local and state leaders, enthusiastic residents, and U.S. Sen. Peter Welch. They were there to celebrate what ECFiber officials liken to “the Golden Spike moment tying the first transcontinental railroad together.”

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After a 30-piece band played marching tunes, ECFiber Chairman F.X. Flinn marched to the podium to describe the meaning of the moment.

"It’s come to fruition today with a lighting of the White River Junction hub," he said. "This is the last piece of the puzzle for the network we originally envisioned that would bring world-class broadband to every home and business in the 23 member towns that originally voted town meeting day 2008 to create ECFiber."

Sen. Welch, an ECFiber subscriber who also spoke at the event, credited the state’s community broadband approach as the linchpin to solving the state’s digital divide:

“If we in rural Vermont were going to depend on the big telecommunication companies to wire our homes and get us Internet, we’d be waiting until our grandchildren had grandchildren. It wasn’t going to happen.”

Eight More Towns Join CUD 

Today, the National Telecommunications and Information Administration (NTIA) announced how it will allocate $42.5 billion in BEAD funds to all 50 states, the District of Columbia, and five territories.

At an “Investing in America” event today at the White House, President Biden noted that this “biggest investment in high-speed Internet ever” was noteworthy “because for today’s economy to work for everyone, Internet access is just as important as electricity was, or water or other basic services.”

And in a press statement, Assistant Secretary of Commerce for Communication and Information Alan Davidson, who is overseeing the NTIA program, added: “This is a watershed moment for millions of people across America who lack access to a high-speed Internet connection. Access to Internet service is necessary for work, education, healthcare, and more. States can now plan their Internet access grant programs with confidence and engage with communities to ensure this money is spent where it is most needed.” 

Our initial reaction is as follows:

"The BEAD allocations amount to the largest ever single federal investment to deploy needed Internet infrastructure across the United States. The question now is: how many states will maximize the moment and be inclusive of municipal broadband, public-private partnerships, and community-driven initiatives vs. those states who will simply dole out the funds to the big monopoly providers and hope for the best?”

Concerns are mounting that over $2.8 billion in potential broadband grants doled out by the Federal Communications Commission’s (FCC) Rural Digital Opportunity Fund (RDOF) could be wasted, further eroding the already well-criticized program’s disjointed effort to expand broadband access across rural America.

In 2019, the Ajit Pai FCC created the $20.4 billion RDOF with an eye on shoring up affordable broadband access in traditionally unserved rural U.S. markets. The money was to be doled out via reverse auction in several phases, with winners often declared based on having the maximum impact for minimum projected cost.

During phase one of the program, the FCC stated that 180 bidders won $9.2 billion over 10 years to provide broadband to 5.2 million locations across 49 states and the Commonwealth of the Northern Mariana Islands. But of the $9.2 billion in winners, over $2.8 billion has gone into default, meaning the bidder couldn’t actually deliver on promised projects. 

We've tracked the RDOF awards since the auction concluded, including for the providers that defaulted on their wins.

These issues have not only imperiled RDOF program funding, but have thrown a wrench in the works of numerous additional government efforts to shore up broadband access, from the FCC’s long-criticized quest to accurately map U.S. broadband access, to the implementation of newer grant programs overseen by other agencies.

The NTIA (National Telecommunications and Information Administration) insists that the 17 state laws that hamper nationwide community broadband deployments won’t delay a massive looming infusion of infrastructure broadband subsidies. But one industry group isn’t so sure.

BroadbandNow, a website dedicated to tracking the U.S. broadband industry, issued a report claiming that state restrictions on community broadband networks could delay the delivery of more than $42.45 billion in BEAD (Broadband Equity, Access and Deployment) grants made possible by the recently-passed Infrastructure Investment and Jobs Act (IIJA).

Such bills, often ghost written by the telecom industry by policy and lobbying intermediaries, often limit the construction or financing of community broadband networks, even in unserved areas that regional telecom monopolies have long neglected.

Covid’s home education and telecommuting boom highlighted the restrictive and often counterproductive nature of such bills, leading two states — Arkansas and Washington — to remove the barriers. And in Colorado earlier this month, Gov. Jared Polis signed Senate Bill 23-183 into law that eliminates an older 2005 law backed by regional telecom monopolies, which imposed cumbersome and onerous restrictions on Colorado towns and cities looking to build better, more affordable community-owned and operated broadband networks.