This is the year for unusual and unexpected broadband grant opportunities. The NTIA released a Notice of Funding Opportunity (NOFO) on May 21 for a broadband grant program it is labeling as the Broadband Infrastructure Program. The NTIA will be awarding grants for up to $288 million, with the funding provided from the $1.9 trillion American Rescue Plan Act.
This is an unusual grant program because the money is aimed entirely at public-private partnerships (PPPs). The applications must be submitted by a government entity, but the specific partner must be identified that will operate the broadband business. I can’t think of another grant program in the past that even favored PPPs, let alone one that is only available to PPPs. It’s going to be interesting to see if there are enough rural PPPs in existence to use all of the money.
The grants are holding to the firm definition that the money can only be used in places where speeds are less than 25/3 Mbps. This creates a huge dilemma if the NTIA is going to stick to the lousy FCC mapping data that incorrectly shows huge swaths of rural areas as having 25/3 Mbps broadband. One would hope that the NTIA will be open to accepting evidence that actual speeds are often far slower than what has been claimed by some telcos and WISPs. If not, it’s going to be hard to find rural areas that weren’t already covered by the RDOF grants.
The grants are like all current federal broadband grants and can’t be used where prior grants have already been awarded to an area but are not yet constructed. That’s going to create an interesting dilemma for some communities. There are some RDOF grant areas that are being heavily disputed, and which may not get awarded. The FCC also awarded grants to Viasat in last year’s incentive reverse auction and communities are rightfully upset that these places are not eligible to get fiber. There is growing concern about the pending RDOF awards made to Starlink.
The grants must propose an engineered business plan. The NTIA expects the engineering to be solid because they expect projects to be built within one year of grant awards. The NTIA can grant a one-year extension for construction in some circumstances. But this rapid construction expectation means the NTIA only wants to see applications from ‘shovel-ready’ projects. Any community thinking of pursuing these grants should be forming the needed partnership immediately.
The grant applications are due by August 17. The NTIA doesn’t expect to start making grant awards until at least November 29. The NOFO offers that the NTIA might award additional funding to approved projects if there is not enough demand for the funding.
The NTIA warns that it will likely not award money to small projects, and it expects awards to be between $5 million and $30 million. That’s understandable when you consider that the agency is going to have to process a lot of the grant requests quickly between August and November. Applicants would be wise to apply early.
While there is no statutory reason that NTIA cannot award 100% grants, they caution applicants that they will favor projects that contribute matching funds of 10% or more – the NTIA wants to see the commercial partners have some skin in the game. They also want these matching funds to be non-federal dollars, meaning the matching shouldn’t come from some other bucket of funding from the $1.9 trillion ARPA program.
This is probably the most unique federal broadband grant I can remember in that the funding is only available to public-private partnerships and no other business structure. Since the grants are only being awarded to the public member of the partnership, this also implies ownership of the network by local governments and some sort of ongoing participation in the business. It’s going to be interesting to see how partnerships are created to meet these grant requirements.