Tag Archives: digital equity grants

BEAD and State Broadband Offices

I’ve been saying for the last few years that the hardest job in the industry has been the folks who head State Broadband Offices. These folks took these positions because they knew they could do a lot of public good by tackling the rural broadband gap and the overall digital divide. A lot of the hard work these folks did over the last three years was erased when NTIA first eliminated the Digital Equity grants and then recently eviscerated the BEAD grants.

SBOs were handed a giant mess with the BEAD grants. I’ve always said the biggest problem with BEAD was the Congressional staffers or ISP lobbyists who wrote the BEAD legislation. They made the process cumbersome and ridiculously complicated. In my opinion, NTIA made it even worse by being overly cautious from day one. It was clear that the agency did not want to be blamed for repeating the FCC’s disasters in the RDOF and CAF II subsidy programs.

SBOs knew the BEAD grant process didn’t have to be so complicated because they have processed and awarded almost $10 billion dollars of broadband grants from the Capital Projects Fund. Those grants came with some common sense rules, but they mostly trusted the States to be good shepherds of the funding. States did an overall great job. It’s not talked about enough, but this is easily the most successful broadband grant program we’ve ever had.

But SBOs accepted the BEAD complications and slogged through the many required steps of the BEAD process. While doing this, SBOs were widely blamed for being slow and not deploying needed broadband – and most of the delays were not their fault.

Some of the steps were so ridiculous that it would be comical if so much money wasn’t riding on the grant process. For example, the NTIA guidelines for the map challenge were overly complicated and largely impossible to comply with.

This last month has been massively disappointing for SBOs. The industry has talked about solving the digital divide for at least twenty years, and SBOs finally had a chance to do something about it. The Digital Equity grants would not solely solve the digital divide, but SBOs were working to create sustainable programs that would outlive the influx of initial funding. This all went for naught when the grant program was completely killed. There are a few states where the legislature contributed some funding for digital equity, but for the most part, this effort is dead.

Now, SBOs have seen all their hard work on BEAD upended completely. States were given a fair amount of latitude to design state-specific rules for awarding BEAD grants, and it’s fair to say that every state came up with its own solution. SBOs listened to state politicians, ISPs, and the public and did their best to create a grant program that fit the specific circumstances in their state

What is probably the most disturbing about the sudden change in the rules is that BEAD was finally working. A large majority of states have started the broadband award process and have been reviewing grant applications. States like Louisiana and Nevada made it through the award process and were ready to award a lot of money to build a lot of fiber while staying within the budget that BEAD gave them. Many states that are partway through the process report that they are getting grant requests to build fiber coming in lower than their expectations.

The revised BEAD grants are nothing more than a one-round RDOF auction by State, where the ISP that asks for the least amount of funding wins. There is a slight amount of wiggle in that a grant request that is less than 15% greater than the lowest bid can be considered. But BEAD is largely now low bid takes all. The one improvement over RDOF is that ISPs must meet financial, technical, and managerial criteria before participating. But even RDOF had an important fiber preference.

I’ve read a few opinions from folks who still think that a lot of the BEAD money can now go to fiber, and I hope they are right. But I remember the shenanigans played during the RDOF auction when ISPs were vying for $9 billion in funding. What are we going to see with a much larger pile of money at stake? What’s to stop a satellite company or large WISP from bidding $2,000 or less per passing to win a whole state?

One thing is for sure. It’s a lot less enjoyable to be a State Broadband Director now, because the NTIA took away one big set of funding and took all the decision making out of the BEAD grant funding. All of the work to create unique State solutions went completely out the door.

Related Blogs:

Updating my BEAD Bingo Card

County Governments and BEAD

A BEAD Bingo Card

It seems like everybody I talk to has a different prediction on the forward trajectory of BEAD grant spending. The reality is that nobody has a handle on this yet since the people who will be making these decisions are not going to be in a position to do so until sometime next year.  While this doesn’t exactly make a bingo card, it’s a wild range of possibilities. I’m also curious to hear from readers if I’ve missed any likely possibilities.

Nothing Will Change. Louisiana has announced grant awards and a few more states are likely to do so soon. A lot of states will have open grant portals over the next two months. Since the grants are finally moving, BEAD will be allowed to play out.

NTIA Puts BEAD on Hold. A new NTIA leader puts everything on hold to give Congress time to consider changes.

BEAD Proceeds as Planned, but Implementation Made Easier. NTIA will let the current grant process move forward, but Congress / NTIA will kill a lot of the implementation provisions before it’s time to build the networks.

States that Haven’t Made Awards Will Be Pressured to Give More to Satellite. NTIA will let the grant process continue but will change the high-cost area rules to force more funding for satellite.

Even States That Made Awards Will Have to Revise for More Satellite. Every State, including those that already announced grants, will have to reshuffle to award high-cost locations for satellite.

Allocation Dollars by State Will Be Reshuffled. There has been a lot of grumbling that some states got too much money and others not nearly enough. Congress could grab all extra funding, known as non-deployment funds, and send it to the states that were shorted in the original allocation.

Non-Deployment Funds Will Be Clawed Back. All BEAD funds not specifically needed for BEAD infrastructure will be returned to Treasury.

BEAD is Repurposed for Satellite and Little Else. The size of BEAD funding is significantly reduced, and most of the smaller fund goes for satellite.

BEAD is Completely Killed. Congress declares that satellite broadband coverage is ubiquitous and the country no longer has a digital divide. They cancel BEAD completely. There are those who argue that the funding has already been irrevocably given to states, so this would result in a big state/federal fight over claw backs.

Future Digital Equity Grants Will Get Cancelled. NTIA will announce some digital equity grants before January 20, but other future State and federal grants will be canceled.

All Digital Equity Grants will Be Cancelled. All digital equity grants will be canceled. Some of this money has already been given to states, so another big fight.

NTIA Digital Equity Grants

The Infrastructure Investment and Jobs Act (IIJA) created two grant programs to address digital equity and inclusion. This section of the IIJA recognizes that providing broadband access alone will not close the digital divide. There are millions of homes that lack computers and the digital skills needed to use broadband. The grant programs take two different approaches to try to close the digital divide.

The State Digital Equity Capacity Grant Program is giving money to States to distribute through grants. The stated goal of this grant program is to promote the achievement of digital equity, support digital inclusion activities, and build capacity for efforts by States relating to the adoption of broadband. The Act allocates $1.44 billion to the States for this program. The NTIA was slow in getting this program running, and recently announced $840 million in funding to cover grants that were intended for 2022 through 2024.

The second new grant program is called the Digital Equity Competitive Grant Program and is being administered directly by NTIA. The budget for this grant program is $1.25 billion, with $250 million per year to be awarded from 2022 until 2026. Congress also appropriated an additional $250 million that should become available in October. 5% of the total funding is reserved for Native Entities, and 1% is set aside for territories. This NTIA has been slow in launching this program but finally dropped the first Notice of Funding Opportunity that makes $750 million available for the grants. This also means there will be another $750 million of grants coming by 2026.

Specifically, the funds are intended to be used for

  • The development and implementation of digital inclusion activities
  • Programs that facilitate the adoption of broadband to provide educational and employment opportunities
  • Training programs that cover basic, advanced, and applied skills
  • Workforce development programs
  • Access to equipment, instrumentation, networking capability, hardware and software, or digital network technology for broadband services at low or no cost
  • The construction or operation of public access computing centers.

The grants can be awarded to local governments, Indian Tribes, Non-profit foundations and corporations, community anchor institutions, or somebody engaged in workforce development. The NTIA strongly suggests partnerships or consortiums between multiple entities. That’s clear by the size of the grant awards, which are anticipated to be between $5 million and $12 million. While grant applications of that size aren’t mandatory, anybody asking for more or less than those amounts must provide a compelling justification for their grant.

The grant process has a fairly short application window, and grants are due by September 23 for all grant applications except for territories that are due by October 22.

Grants must be spent within for years of the date of a grant award. Grant recipients will be allowed to ‘measure and support” the grant funded activities for one additional year. The NTIA warns that no grant extensions will be allowed.

These grants have been anticipated for a long time since the IIJA law was enacted on November 15, 2021. Folks throughout the industry have been wondering why it has taken so long to start issuing grants that were intended to start in 2022.