The guessing game is over since NTIA has released the final rules about how the new BEAD grant process will work. Unfortunately, it’s still impossible to make any guesses about the percentage of BEAD that will be awarded to fiber or other technologies. There have been both optimistic and pessimistic predictions of awards for fiber written in the last few weeks, and as you’ll see below, there is still no way to guess who is right.

There are a few things we know. It’s clear that a lot of State Broadband Offices (SBOs) still want to maximize the amount of awards made to fiber. We also know that overall eligible BEAD locations are being reduced by allowing a map challenge from WISPs that use unlicensed spectrum. Preliminary estimates are that as many as 15% of BEAD passings might be removed from the grant process, but we’ll have to wait and see if WISPs use this challenge.

NTIA has specified the process for SBOs to make proposed grant awards. The highlight of that process is as follows:

• SBOs must start over, and all ISPs will be invited to bid in a single Benefit of the Bargain grant round (this is probably the dumbest new industry term I can recall).
• SBOS can designate a project as a Priority Broadband Projects, meaning projects that get the first crack at funding (see more below). In areas where more than one priority project is eligible for funding, the ISP asking for the lowest amount of grant funding per passing wins, with the caveat that an SBO can award the grant to a project that is no more than 15% higher than the lowest bidder.
• Areas with no priority projects are directly awarded to the ISP asking for the lowest amount of funding.
• SBOs are given a number of options to find ISPs willing to serve locations that nobody has requested to serve.

Priority Broadband Projects. An SBO gets to decide if a given grant application is going to be designated as a Priority Broadband Project. To meet this requirement, a proposed project has to 1) be able to deliver 100/20 Mbps service today with a latency under 100 milliseconds, 2) be able to scale over time to meet evolving connectivity needs of households and businesses, and 3) support the deployment of 5G and successor wireless technologies and other advanced services.

The second requirement implies that an SBO can determine some future goal faster than 100/20 Mbps that applicants must agree to eventually meet. The new rules don’t specify how to do this. I’ve already seen a few SBOs suggesting ultimate speeds between 200 and 300 Mbps download. Faster future speed requirements might be a reason for not giving satellite a priority designation, but WISPs would likely qualify.

The last test for supporting 5G is a harder hurdle to satisfy. It’s clear that building last-mile fiber supports 5G and future wireless technologies, because new 5G towers or repeaters can be placed anywhere in a last-mile fiber network. This will be harder for a WISP to guarantee. A WISP might be able to meet this requirement if they are building a BEAD network that includes fiber backhaul to towers instead of using wireless backhaul. A WISP that isn’t proposing to build some fiber is going to have a challenge to meet this requirement.

The bottom line is that it should be easy to designate last-mile fiber projects as priority. WISPs have more of a challenge in being designated as a priority project, and I expect some WISPs will achieve this designation and others won’t, depending on the proposed network and specific technology. It seems to be easy to exclude satellite service from the priority designation.

NTIA Taking an Active Role in BEAD Awards. There is a new surprise rule that means that tentative grants awarded using the above rules might still not be final. NTIA has made it clear to SBOs that it must be kept in the loop during the entire grant process. The ultimate touchpoint is that NTIA wants to see and approve every proposed grant award.

There is no end to the ways that NTIA could exercise this power. The folks making optimistic predictions for fiber awards could be right and NTIA could elect to let SBOs call the shots and could rubber-stamp most proposed grants.

However, there has been a lot of speculation that Commerce wants to significantly reduce the size of the $42.5 billion program, and having the final approval might be the mechanism for lowering grant outlays. NTIA might set an arbitrary cap on the amount if BEAD per passing for fiber awards. NTIA might veto grants made for fiber if a WISP or satellite provider offers a lower price for the same area, which would largely undo the priority areas designation. NTIA might override proposed grant awards in blue states but not red states, in large states but not small ones, or for small ISPs but not big ones. NTIA could decide that Starlink gets no grants, if we are to believe the current spat between Elon Musk and the administration.

Unless somebody has inside knowledge of NTIA’s intentions for awarding grants, it’s impossible to guess what NTIA might do with its power to approve grant awards. I’m done guessing the amount of fiber that will be built by BEAD. At this point, I think we’ll have to wait until September to see what pops out of the BEAD award process.