When the NTIA suggested BEAD grant rules, a lot of industry folks assumed that states would largely follow the NTIA suggestions and that there would be a lot of similarity in the BEAD grant rules between states. It turns out that the opposite is happening, and many State Broadband Offices are taking unique approaches. In this blog, I compare the BEAD grant rules for Georgia and Illinois. I picked these states only because these are the two most recent rules I’ve read – but every other state plan I’ve read is also different than these two. It looks like fifty states means fifty different BEAD grant programs. Following is a high-level comparison of the two states:

Overall Approach. Georgia will only accept grants in the first round that offer to build fiber – other technologies will only be considered in a subsequent grant round if there isn’t enough money or grant requests for bringing fiber. The Georgia rules also strongly reward ISPs who propose to build an entire county.

Illinois has at least a two-step grant program. The first grant round will only accept proposals to build high-cost areas (that are designated as such by the state). The second round is for everything else. This is an odd approach since ISPs will fear winning high-cost areas but then not winning the nearby areas that together would constitute a coherent study area.

Most Important Scoring Metrics. Georgia gives 50 out of 100 points based on the amount of grant requested per location. Since everybody will be proposing fiber, the costs should be similar, so an applicant can grab the most grant points by offering the greatest percentage of matching funds. An ISP willing to contribute 40% of the cost of building will likely beat somebody who wants to contribute the minimum 25% matching. But this like RDOF, and an ISP is only competing against those that bid for the same County.

Illinois will award 25 of 100 points based strictly on the amount of matching offered. An ISP offering less than a 30% match will win 0 points. An ISP must cover 60% of the cost of the project to get the full 25 points. Illinois awards another 25 points for the cost of the grant award per passing compared to a not-yet-published suggested reference cost per location calculated by the state. By definition, this approach strongly favors lower-cost technologies like wireless.

Broadband Rates. Georgia will award 15 points to an ISP that promises that symmetrical gigabit prices will always be lower than the rates for the service in Metropolitan areas of Georgia.

Illinois will award 20 points for ISPs to meet specific price targets (5 points for each): $30 for 100/20 Mbps. $50 for 100/100 Mbps. $80 for 500/1000 Mbps. $100 for symmetrical gigabit.

Local Support. Georgia will award up to 9 points based on the volume and strength of the support from local communities.

Illinois will award 4 points for breadth and depth of local support and another 4 points if local community members or organizations make a verified financial commitment to the grant.

Other Grant Points

 Georgia:

• 10 points for compliance with fair labor laws
• 8 points for broadband speeds
• 5 points for speed of network construction and deployment
• 2 points for having been an ISP in Georgia for at least three years
• 1 point for having a headquarters in Georgia

Illinois

• 5 points for compliance with fair labor laws
• 6 points for broadband speeds
• 6 points for offering open-access
• 3 points for speed of network construction and deployment
• 2 points for working in a community that has participated in the Accelerate Illinois program.

My Summary. If I didn’t know these are both BEAD grants, I would never guess these are from the same funding source. The scoring emphasizes drastically different priorities.

Georgia. It will be interesting to see if the NTIA will allow the state to shut out other technologies. The scoring benefit from bidding for entire counties might violate the Congressional edict that grants can be as small as a single location. The emphasis on whole-county bids will make it hard for ISPs that want to edge out from existing networks or electric coops that only want to build in their own territory.

Illinois. The scoring benefit for meeting specific prices for specific products seems to violate Congressional intent that specified that BEAD should not set or influence rates. The huge amount of matching required to get grant points seems to not recognize that BEAD areas are extremely rural, by definition. I’ve never seen a rural fiber business plan that can tolerate 40% to 60% equity contributions – that’s why nobody has built these areas. The grant points from comparing actual costs to some target cost set by the state means these grants are going to heavily favor lower-cost wireless technology. The points for open-access are a head-scratcher since it’s almost impossible to successfully operate a rural open-access network unless it can serve 20,000 or more customers.

Bottom line: Georgia obviously favors fiber to the exclusion of other technologies. My best guess is that the big scoring related grant dollars per passing will favor big ISPs over small ones. For Illinois, I’m not sure if it’s intentional, but WISPs are going to score far better than anybody proposing to build fiber. Georgia could get border-to-border fiber while Illinois could get border-to-border wireless.

Again, these two plans were not chosen because they are extreme examples. These two plan just demonstrate the wide variance of state philosophies behind BEAD. I must note that these are proposed plans that might get changed before being sent to the NTIA. It will be interesting to see how pressure from ISPs and the public influence the final rules. The NTIA also will have to approve these plans.

I also have to wonder if State political leaders understand the direction that their State Broadband Offices are taking – because the grant scoring rules are going to largely define who has a chance of winning in each state – both the technology that is favored and the size of ISPs that are likely to win.