The Industry

BEAD Grants – File Early or Wait?

Several states have already announced that there will be multiple rounds of BEAD grant applications. This makes a lot of sense for states that will be receiving a significant amount of BEAD funding. It’s a daunting prospect to try to meet all of the goals established by the NTIA in a single round of grants. Perhaps the biggest challenge will be making sure that as many unserved and underserved homes find a broadband solution.

One issue of concern for State Broadband Offices has to be what they should do if nobody asks for grant funding from some parts of a state. This is not hard for me to envision. I’ve been working with a lot of parts of the country where a 75% grant might not be sufficient – particularly when considering the extra costs that BEAD adds to building a broadband solution. For example, I’ve looked at a few mountainous and remote communities where the grants will need to be nearly 100% to get an ISP to want to bring a fiber network – and these are communities that don’t look to be reasonably served by a wireless solution. I think ISPs and State Broadband Offices will eventually need to negotiate to bring broadband to the highest cost places.

There are also a lot of small pockets of homes everywhere that do not neatly fit into any grant application. One of the reasons for many of these pockets was the FCC’s RDOF subsidies that created service areas often described as swiss cheese. But there are also small pockets of customers everywhere for more natural reasons, such as being located in an isolated place not close to other customers. I believe States are going to have to get very creative if they really want to get all of these tiny pockets served because ISPs are not likely to go through the complicated BEAD grant process to serve tiny, isolated areas.

This is further complicated by the legislative and NTIA rules that say that States must bring broadband to unserved locations before funding other places. Nobody yet understands what that will look like in practice, but States seem to have a mandate to make sure they find a solution for the most challenging locations before spending all of the BEAD grant funding elsewhere. That alone sounds like a good reason to expect multiple rounds of grants.

Communities have a different issue to consider. Many communities have a strong preference for the ISP(s) they want to serve them. Some favor local ISPs they’ve known and trusted for many years. Others are excited to see electric coops considering becoming the broadband provider. Some communities have a strong preference for fiber. Some local governments communities have already heard from residents that they do not want the incumbent telco that neglected them for decades to get more funding – they want somebody different.

It’s my opinion that communities with a strong preference for specific ISPs need to work with their chosen ISPs to be part of the first round of BEAD grant filings. Otherwise, they take a big chance that somebody they don’t want will file early and win the first round of BEAD grant filings. I’ve always thought it is likely that State Grant Offices will give extra consideration to ISPs that have the strong support of local officials. Many jurisdictions are making small local grants to demonstrate their support for a specific set of ISPs. But having a strong preference for an ISP partner won’t mean much if some other ISP beats files grants first.

There is a lot of speculation about the degree to which the big telcos and firms that are backed by venture capital money will be chasing the $42.5 billion in grants. It’s probably fair to assume these big companies will file every grant they are interested in during the first grant window of opportunity.

This means that it’s already time to talk to ISPs. I’m working with a number of counties that are already reaching out to local ISPs to understand their intentions. County governments have a strong desire to know that somebody plans to serve every unserved and underserved location in the county. Their biggest fear is that the big grants will come and go, and some of their folks still get no broadband solution.

ISPs that really want to serve specific areas need to be ready by the first round of grant filings – and communities should be pushing them to do so. It’s likely that the earliest rounds of state grants will be oversubscribed and many grants will not be made until later rounds – but if somebody beats an ISP to an area you want to serve, the opportunity might be gone.

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