Get Ready for the Challenge Process

There is one interesting aspect of the BEAD grants that could impact any rural community that is hoping to find a broadband solution from the $42.5 billion BEAD grant process. The NTIA is allowing local governments to challenge the broadband maps that will be used to determine the areas that are eligible for the grants. This is something that communities should be getting ready for today.

Let me first explain the background to this challenge process. It’s a confusing and messy story. When Congress funded the new BEAD grants, one of the provisions was that States have to use the FCC maps as the basis for the broadband grants. This is a dreadful provision since the FCC maps have been so inaccurate in the past. Several states have done enough analysis to show that the current FCC maps mischaracterize millions of homes as having adequate broadband that doesn’t exist. This is almost entirely due to the fact that ISPs feed the data into the FCC maps with no review or challenge by the FCC. The FCC mapping rules say that an ISP can report ‘marketing speeds’, and many ISPs have used that ability to overstate the speeds of broadband. For example, there are millions of homes in the current FCC maps using DSL where the telcos claim speeds of 25 Mbps, but where actual speeds are almost always far slower than this. This overstatement of the existing capability means that customers would be categorized as underserved in the BEAD grants instead of unserved.

The FCC is scrambling to create a new set of broadband maps to be used for the BEAD grants. The latest I’ve heard is that the new maps might be ready by November. The new maps completely change the way that ISPs report the data – they now must draw polygons around customers rather than using Census blocks. But the new mapping rules didn’t make the change that matters the most – ISPs are still allowed to list marketing speeds instead of actual speeds.

I’m certain that the new maps are going to be a disaster, at least this first version that comes out this fall. First, many ISPs are going to stumble making the conversion to the new mapping system – it’s complicated and is not going to be easy to get right. But my real concern is that ISPs that want to gum up the grants can do so by overstating broadband speed capabilities, as they have done in the past.

We don’t have to look back very far into the past to see the big telcos try this. On the eve of the RDOF auction, CenturyLink and Frontier tried to increase the reported speeds for tens of thousands of Census blocks to above 25/3 Mbps – a change that would have kept those locations out of the RDOF auction. The FCC blocked these mass changes before the auction, but there is nothing to stop the ISPs from doing this again.

And now, there is a new group of ISPs with this same motivation. In the recent NOFO for the BEAD rants, the NTIA says that grants can’t be used to overbuild a fixed wireless ISP that uses licensed spectrum and provides broadband speeds of at least 100/20 Mbps. That ruling means that these ISPs are going to be highly motivated to declare that they are delivering 100/20 Mbps speeds even if they don’t in order to protect their service areas from BEAD grant eligibility. Many wireless ISPs have overstated broadband speeds in the past even more than big telcos, so it’s not hard to imagine some of them doing this.

The challenge process gives a community the chance to fight back if the new FCC maps show that their community is not eligible for the BEAD grants. Each state must allow for a challenge process where a unit of local government, a nonprofit organization, or an ISP can challenge the broadband maps. These challenges are made to the State, and not to the FCC. I’m hopeful that most states will be sympathetic to challenges that will bring faster broadband to places that need it. A State much submit every successful challenge to the NTIA for review – but I believe that the NTIA will want to get these grants done right.

How could a community mount a challenge? The best way to do this is with a mountain of speed test data that has been collected by address. We know that any individual speed test reading is not reliable proof of broadband speeds – there can be factors at a home, such as a poor WiFi router than can lower the measured speed. But speed tests taken in bulk are good proof. For example, if no speed test in a rural area hits the speeds claimed on the FCC maps, it’s fairly certain that the claimed speed is not being delivered.

I also think that gathering anecdotes and stories of the results of the poor broadband in the affected areas can be effective. If an ISP overstates broadband speeds in an area, stories from folks who tell how they can’t work from home or how their kids can’t do homework over the broadband connections can help to bolster the fact that the broadband speeds are being exaggerated.

States will not be asking for these challenges until sometime after the new year, so there is plenty of time this year to start gathering the evidence. It may turn out you won’t need a challenge if the ISPs in your area report existing speeds honestly. But you need to be prepared for the situation where the FCC maps will deny broadband funding for your area. It will be a disaster for a community if they are unfairly denied grant funding because of a dispute about the FCC maps. It’s happened many times before – but communities need to make sure they don’t miss out on this giant round of funding.

When Will We See BEAD Grants?

One of the most common questions I’ve been fielding is when we’ll be able to file for grants from the Broadband Equity, Access, and Deployment (BEAD) grants that come from the $42.5 billion funding that will pass from the NTIA and be administered through the states. The short answer to the question is that we can’t know yet. But we know all of the steps that must be taken by a state before it can start offering grants.

We have a date for the first step of the process. On May 15, the NTIA will release a Notice of Funding Opportunity (NOFO) for the BEAD program. This document will flesh out the NTIAs understanding of how the grant process will work. The legislation that enabled the grants included some specific requirements, and in this document, the NTIA will embellish and add details to those requirements. Note that the purpose of the NOFO is to inform the States what must be included in the grants the States will ultimately award. This NOFO will not be the rules for grant applicants – those rules will differ as each State adds its own twist on the basic NTIA rules.

After the NOFO is published, States will have to file a letter of intent (LOI) with the NTIA to describe the current state of broadband in the State and must describe the State’s plan for using and administering the BEAD funding. States are allowed to request up to $5 million at the time that they submit the LOI. This funding is provided to help States reach out to citizens, communities, and businesses. The funds can be used for a variety of planning purposes like data collection, developing a budget for operating the State grant program, materials for outreach to the public, etc. States that accept the $5 million of funding must file a 5-Year Action Plan to the NTIA. This document will describe how a State will set priorities for things like economic development, telehealth, or whatever priorities a given State feels are the most important. To clarify a question I’ve gotten a few times – this $5 million is strictly for the state to do planning and will not be turned into planning grants for anybody else.

The whole process is then on hold until the FCC releases updated broadband maps. This is the step I’m worried about because the new broadband maps will be the first time that ISPs will be using the new mapping system. I will be surprised if the first maps from the new process are not a messy disaster – and I’m not sure what happens if they are. It’s hard to think that the FCC will be ready to release the new mapping data before the end of this year, although the agency will be under huge pressure to get this done sooner.

At this stage, the purpose of the FCC maps is to count the number of unserved and underserved homes in each state in order to decide how much funding each state will get. It won’t be surprising to see a few states sue the NTIA at this point if they feel that the maps are erroneous and that their state is getting shorted on funding – recall that many states have had mapping programs and they think they already know the number of people without broadband.

Once the amount of funding to each state is known, States must file what is being called an Initial Proposal. This is the document where the State describes how it will administer the BEAD grants. The Initial Proposal will describe the detailed grant rules each State plans to use to choose grant winners and administer grants once awarded. Each State must issue a list of areas that it thinks are eligible to meet its proposed grant rules.

The NTIA will review each Initial Proposal. That’s a daunting task, and States that get the Initial Proposals in first will probably get reviewed first by the NTIA. There is no guarantee that the NTIA will approve a plan, particularly if a State’s plan violates any of the rules specifically proscribed by Congress – such as making grant awards available to municipalities. I believe the NTIA also must judge if a State has assembled a team capable of administering the proposed grants – something that many states are already behind on. If the NTIA doesn’t approve an Initial Proposal, then I assume that the State and the NTIA will begin a negotiation process. The way I read the rules, if a State doesn’t get approved, the State won’t be given any BEAD funding.

If the NTIA approves a State’s Initial Proposal, the NTIA will then release 20% of the BEAD funding allocated to that State. The next step might be messy because a State that receives this funding must next complete a challenge process where it gives incumbent ISPs a chance to dispute any areas that are listed as grant eligible. Some challenges will be easy – such as where an ISP has built fiber since the date of the data in the FCC maps. But the experience with similar challenges in the recent NTIA grants portends a big mess for State broadband offices if huge number of challenges are mounted. This could become a protracted battle if any ISPs take unsuccessful challenges to court. Note that this is the State reviewing the challenges, not interested communities and ISPs, and we will quickly see if a given State is biased towards incumbents or communities.

Once the challenge process has been fully resolved, a State must submit its Final Proposal. This will reflect any changes made as a result of the challenge process. The NTIA must then approve the Final Proposal and will release the rest of the BEAD grant funds to a state.

This process is overly complicated and seems aimed at moving slowly – but it was dictated by Congress to be that way. It’s impossible to guess a timeline for the process. It’s hard to envision the first State being able to announce a grant program until the summer of 2023 – but I predict that most states will be later than that. For communities waiting for broadband, it’s hard to imagine much construction starting before 2024, with many projects then requiring multiple years to build.