My overall impression of the BEAD NOFO is that the NTIA largely emphasized, and in many cases even strengthened the requirements for the grants as delineated in the federal legislation. But there is one area where I think the NTIA is instead treading carefully.
The federal legislation made it clear that BEAD grants should be made available to everybody – commercial entities, non-profit entities, Tribes, and municipal entities. The day that I read the federal legislation, I knew there would be an eventual showdown since many states have barriers or restrictions against municipal participation in building, owning, or operating commercial broadband networks.
The NTIA is tackling this sticky issue using the following language:
A state must Disclose (1) whether the Eligible Entity (the state) will waive all laws . . . concerning broadband, utility services, or similar subjects, whether they predate or postdate enactment of the Infrastructure Act, that either (a) preclude certain public sector providers from participation in the subgrant competition or (b) impose specific requirements on public sector entities, such as limitations on the sources of financing, the required imputation of costs not actually incurred by the public sector entity, or restrictions on the service a public sector entity can offer; and (2) if it will not waive all such laws for BEAD Program project selection purposes, identify those that it will not waive and describe how they will be applied in connection with the competition for subgrants.
If there is any one area where politics creep into building broadband, it is with state restrictions on municipalities. There are states, like my state of North Carolina, where the legislature has repeatedly emphasized that it doesn’t want municipalities to be funding or operating fiber networks. This is also a bigger political issue because it creates another skirmish point in the ongoing battle over state rights versus federal mandates. There are many states that have drawn hard lines against federal mandates, even when it costs them a lot of money – such as the states that are still turning down billions of dollars per year of federal funding through the Affordable Care Act.
The NTIA could have handled this differently by plainly requiring that any state broadband plan has to make the grant funding available to everybody, including municipalities – as stated in the legislation. States could have reacted to that requirement in one of several ways. A state could file a plan that agrees to waive some or all municipal restrictions only for purposes of the BEAD grant. Broadband is such a hot topic in some states that a legislature might blink rather than take a hard line.
Or a state could react by filing a state plan that clearly sticks to existing barriers against municipal participation in broadband. That would set up a big fight between the state and the NTIA.
A state could react by refusing to file a state broadband plan and forgoing the billion dollars of funding that comes with this legislation. The interesting thing is that the legislation seems to have presupposed that some states might do this since there are provisions where municipalities and ISPs can ask for grants directly from the NTIA if a state refuses to agree with the requirements of the legislation.
I’m just guessing, and I have no insight into the mystery that is D.C. politics, but I think the NTIA chose a path that wouldn’t goad states into dropping out of the BEAD grant program. Perhaps they want to first open up a dialog, and the above language does that. It allows a state to define what it will or won’t do related to municipalities.
I also guess that this language will open up a dialog within each state about restrictions on municipal broadband. Recall that every state has to put its plan out for public comment before submitting it to the NTIA. The above language will force a state to defend its plans to the public if it refuses to allow grants for local governments. Any state taking that approach might expect a lot of public pushback – which is different than setting such policies behind closed doors in the legislature.
The language doesn’t preclude the NTIA from rejecting a state broadband plan if a state won’t budget on the issue, and it may eventually have to do so. But I also guess that the NTIA doesn’t want to directly administer the grant programs in some states, so it is motivated to see the money go to the states. I’m asked daily when I think BEAD grant applications will be available, and this is one more issue that makes it impossible to predict. If your state is going to fight the municipal broadband battle it’s going to be later than states who don’t.