Regulation - What is it Good For?

The BEAD NOFO – A New Definition of Broadband Technology

The Notice of Funding Opportunity (NOFO) for the $42.2 billion BEAD grants establishes new rules for the grants that might have a wider implication for broadband elsewhere. One of the most interesting aspects of the NOFO was the definition of a new term – Reliable Broadband Service.

The NOFO defines Reliable Broadband Service to means a broadband service that is shown to be providing broadband in the FCC maps using (i) fiber-optic technology; (ii) Cable Modem/ Hybrid fiber-coaxial technology; (iii) digital subscriber line (DSL) technology; or (iv) terrestrial fixed wireless technology utilizing entirely licensed spectrum or using a hybrid of licensed and unlicensed spectrum.

The key purpose of this new term is to define the technologies that can’t be overbuilt if the speeds on those technologies meet the BEAD speed requirements. For example, BEAD grants can’t be used to overbuild a cable network that has speeds today faster than 100/20 Mbps. However, there are some tiny rural cable systems that have speeds slower and that – and BEAD could be used to overbuild them.

The more interesting aspect of this definition is that the BEAD grants can be used to overbuild any other technology such as satellite broadband or fixed wireless networks using unlicensed spectrum. It doesn’t matter what the speeds are for these networks since NTIA has declared these technologies to be unreliable.

While this was expected and could be imputed from the Congressional enabling language, this is a clear blow to existing WISPs that are delivering decent speeds in rural places. The vast majority of WISPS use unlicensed spectrum – and I believe that this language also covers the use of CBRS spectrum – it’s lightly licensed but is not exclusive for a given ISP.

It’s also hard with this definition to think that anybody using satellite or unlicensed spectrum for fixed wireless will be eligible for BEAD grants, since those technologies have been declared by the NTIA as being unreliable. I don’t think it matters what speed these technologies can deliver – the NTIA has labeled them as unreliable.

This definition puts a label on those technologies that I’ve never seen used, but which is descriptive. Fixed wireless coverage varies in practice due to factors like temperature, humidity, and precipitation. The biggest issue with unlicensed spectrum is the possibility of debilitating interference. Not every home can see satellites due to terrain or tree cover, and satellite technology cannot guarantee serving everybody in a grant footprint – a key requirement in the NOFO for any grant winner. Earlier federal grants allowed for technologies that would reach most, but not all households – but the BEAD grants insist on total coverage.

Another part of the reasoning for the NTIA in coming up with this definition is probably the useful life of satellite and fixed wireless technology. It sounds pretty certain that low-orbit satellites will fall out of the sky after 5 – 7 years and will have to be replaced. The whole industry understands current fixed wireless technology to have a shelf life of around seven years. It’s easy to define these technologies as unreliable since there is no guarantee that a grant awardee will replace the technologies when needed.

This also raises an interesting question for elsewhere in the industry. Starting last year, the major broadband agencies in the federal government have been required to regularly communicate and coordinate. I have to wonder if this new definition might be the death knell for some of the big open RDOF awards that use satellite and fixed wireless technologies. If the FCC agrees that those technologies can’t serve everybody in an award area, then this new definition gives the FCC an easy way to cancel those awards.

This doesn’t mean that WISPs or satellite providers won’t still be in the market or even that they might not fare well – they are free to compete. But this new definition means that these technologies can be overbuilt with fiber or other technologies that satisfy the NOFO. And it seems likely that this means that satellite companies and WISPs using unlicensed spectrum are not going to be able to get BEAD grants.

Like every requirement in the NOFO, these rules will have to be interpreted by the fifty states. I think this particular language is fairly clear, but it will be interesting to see how states interpret this and the many other new rules and definitions created by the NOFO.


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