The requirements for States matter because States will likely request much of the same information from each grant recipient. Starting one year after getting the funding, then every six months, each State must report the following:
- The State must describe to the NTIA how it expended funds.
- The State must describe each service provided with the grant funds.
- The State must describe the number of locations at which broadband service was made available using the grant funds, the number of those locations at which broadband service was utilized, and the comparative demographics of those served. I find the last requirement to be troubling, and I don’t know any ISP that asks about the demographics of its customers, whatever that means. I don’t know how ISPs will gather such information. I suspect most people are like me and would not provide any demographic data to an ISP like household income, number of people in the home, etc. – it’s none of the ISP’s business.
Grant recipients also have a long list of reporting requirements. A grant recipient must report to the State every six months until the grant funds have been fully spent. The specific reporting requirements include:
- A description of the type of infrastructure that has been constructed and installed.
- A list of addresses or locations that can be served by the network being constructed. The ISP must note if each address is residential, commercial, or an anchor institution.
- The aggregate customer penetration rate for the grant locations.
- The broadband speed available to a customer. This includes describing the actual peak and off-peak speeds of the broadband being delivered as well as the maximum advertised
- A description of all non-promotional prices and fees.
- A list of all interconnection agreements it has in place and the status of each. This does not mean the traditional interconnection agreements that telephone companies use to interexchange data, but connections from the ISP to the Internet.
- The number and the dollar amounts of contracts and subcontracts awarded that were given to minority-owned or women-owned businesses.
- The same information that is provided to the FCC for mapping reporting.
- An updated Form SF-425 which reconciles all expenditures to date by category.
- For projects over $5,000,000, the ISP must provide certifications regarding the laborers and mechanics employed by contractors or subcontractors working on the project. If such certification is not provided, the ISP must provide a project employment and local impact report and a project workforce continuity plan.
- Anything else that the State or NTIA adds to this list in the future.
There are a few things not listed in the NOFO that I expect. I fully expect the NTIA to require that ISPs undergo periodic speed testing on completed networks to verify that the speeds actually being delivered are what the ISP is claiming. They might not wait until a project is completed if it’s going to be constructed over multiple years. I also fully expect the NTIA to develop some form of annual reporting on the status of the grant project areas that extends after the funds have been used.
I fully understand the NTIA’s desire for detailed reporting. The agency is trying to avoid the criticism leveled at the FCC for having almost non-existent reporting for some FCC subsidy programs like CAF II. The big telcos supposedly didn’t make the needed upgrades in many areas, but the FCC never got a detailed look at how the funds were expended.
The reporting workload is not as onerous as the original grant application but only by degree. If an ISP isn’t tracking spending and customers carefully from the first day of the grant cash flow, this reporting could become overwhelming. I also expect there will be audits to see if everything was reported accurately. Anybody who has ever been through a grant audit can tell you how ghastly the process can be.
The bottom line is that any ISP who takes the BEAD grants needs to recognize that there is going to be a major ongoing reporting effort – and it will happen at the same time that you’re still busy building the network. These reporting requirements are going to require ISPs to keep track of and compile a lot more data about the customers on a grant network than what ISPs have ever done in the past. As someone who has seen the books and records of hundreds of ISP, I can tell you that a lot of ISPs are not ready to keep records in the needed detail for this reporting. If you take the grant money, you better get ready.