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.
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