Another Twist in The BEAD Grant Process?

Word has been circulating that the NTIA recently informed State Broadband Offices that they must submit a final BEAD plan to the NTIA one year after receiving approval of the Initial Proposal of grant rules. That’s not a surprise since this language is straight out of the legislation, and the NOFO for BEAD – An Eligible Entity may initiate its competitive subgrantee selection process upon approval of its Initial Proposal and will have up to one year to conduct additional local coordination, complete the selection process, and submit a Final Proposal to NTIA.

The ugly twist is that the NTIA is expecting the Final Proposal to include a final list of all BEAD grant winners. Everybody has always assumed that the Final Proposal would be just that – a proposal that describes and fine-tunes the rules being used to award grants. Most State Grant Offices have assumed that they would have multiple years to pick BEAD grant winners.

Consider what has to happen once a state gets approval of its Initial Proposal:

  • A State Broadband Office must finalize the rules for awarding grants through attorneys and state leadership. Some states are going to be required to get the Legislature involved to approve grant rules. This will likely take 3-4 months for most states, but a few will take much longer.
  • The Grant Office would then be ready to announce the date for the first round of grant applications. They would typically give applicants 60-90 days to submit grant applications.
  • A Grant Office will need at least 30 days for the initial review of applications and to provide time to ask for clarifications from applicants.
  • Next, the detailed grant scoring must be done. The BEAD grants are complex, and it’s hard to see a state scoring and ranking grant applications in less than 60 days. There is a lot of complicated due diligence needed by grant offices that are often manned by first-time grant reviewers.
  • The State is then going to have to allow 15-30 days to post the grant applications and allow for protests and challenges. There would be another 30-60 days to resolve protests.
  • Finally, grant awards are announced, and it can easily take three months to negotiate contracts with grant winners. Inevitably, some winners will back out during this process.

The timeline above totals 16 months – and that’s if everything goes smoothly. The BEAD grants are complex, and reviewing and resolving grants that ask to serve overlapping areas is going to add a lot of complication to the process. To put this timeline into perspective, my state of North Carolina is 18 months into the $350 million ARPA grant process and still has not finished identifying all of the grant winners. And that’s with a capable and experienced Grant Office – some states are new to the grant process. The BEAD grants are for more dollars, are more complicated, and will take more time to review than ARPA grants.

The above timeline doesn’t reflect the added rules that are specific to BEAD. State Broadband offices have a mandate to bring broadband to every unserved location. They also must contend with special handling of high-cost areas. Both of these processes will require a lot more time than listed above for Broadband Offices to reach out to and negotiate with ISPs. States that are lucky enough to fund all unserved and underserved areas will need more time to figure out what comes next.

I’m fairly certain that any pressure to speed up the grant time frame comes from the recent White House emphasis on getting infrastructure money out the door quickly. I think everybody in the industry thinks that the BEAD grant process should have gone faster. But the BEAD process has been glacially slow and it’s been 19 months since the IIJA legislation was signed. It’s absurd that we are just now announcing the amount of money that states will get.

But we can’t make up for the glacial process of launching the BEAD grants by rushing at the end so that the money is shoved out the door without taking time to make sure that each State is getting the best long-term solution. States have been having a lot of internal debates about the technologies and types of ISPs they hope will win funding – any deliberation and chance of directing the funds responsibly will be cut short if the process is hurried. One of the most important parts of any grant process is to give worthy applicants a chance to refine and amend a grant request in a subsequent round. The BEAD grants are the first grants in my memory where the States had to reach out to stakeholders to get public feedback. If we rush, all that was learned in that process will be tossed aside.

If the NTIA really insists on a speedy timeline, it will be creating an RDOF-type disaster. The only way to get this process done in a year (or even 18 months) would be through a single round of grants – done hastily. With a tight time frame, the grants won’t be reviewed closely and grants that include errors will be pushed through. ISPs that aren’t really qualified will sneak through.

Having only one round of grants will feel a lot like the RDOF reverse auction. A giant pile of grants will be shoved into the funnel, and it’s likely that the grants will go to ISPs that ask for the lowest percentage of grant funding. A friend of mine has jokingly been saying that 95% of BEAD money will go to the large incumbent providers, and if there is a single-round grant process, he might not be far from the truth.

I’m hoping that this is just a trial balloon being circulated by the NTIA to get feedback, and if so, every State Broadband Office needs to push back hard. If the grants are going to be hurried, we’re going to end up with yet another disastrous federal grant program. I was hopeful that BEAD would avoid the mistakes of the past since the money was given to the States. But if the NTIA forces State Broadband Offices to rush the grant process, we’ll be watching a slow-motion train wreck over the next year.

3 thoughts on “Another Twist in The BEAD Grant Process?

  1. Your friend is spot on. If BEAD becomes a short notice, single-cycle grant, the large ISPs will win. One, because they have the staff to push applications to the states within a tight timeframe and two, because when states are pressured to make decisions without assessing all factors, they will (mostly) default to incumbent ISPs (better the devil you know, etc.).

    I hope this is not how it plays out but if it is, all the gushy talk about BEAD resolving the digital divide will go out the window and we’ll end up seeing billions go to large ISPs with poor oversight (again).

  2. That would be unfortunate.
    From NTIA’s guidance on their website.
    “NTIA will award the remaining funds allocated to the Eligible Entity upon approval of the Eligible Entity’s Final Proposal, and Eligible Entities will initiate their subgrants for the remaining 80 percent of funding and any portion of the original 20 percent that the Eligible Entity has not yet awarded as a subgrant. Prior to submission to NTIA the Final Proposal must be made available for public comment.”

    You read this as NTIA expecting the Final Proposal to include the subgrantees?
    “Eligible Entities will initiate their subgrants for the remaining 80 percent of funding”?

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