Doug Dawson (CCG) is one of the smartest broadband guys I know. Doug is going to be working on a series of blog posts on BEAD (Broadband Equity, Access, and Deployment) funding the applications. If you are thinking about BEAD funding, or you want to keep an eye on things, I recommend following his blog. I might not post about each edition in her series but today he starts with an outline of the issues he may be diving into soon… (my quote below is abridged)
- The Grants Draw a Firm Technology Line.
This includes only fiber-optics, cable company hybrid-fiber coaxial technology, DSL, and fixed wireless service supported by licensed spectrum. Every other technology does not count as broadband in terms of defining areas eligible for the grants. The NOFO means that grants can be used to overbuild areas served by satellite broadband or by WISPs using unlicensed spectrum – regardless of the speeds being provided.
- The Grants Are Complicated.
These are going to be the most complicated broadband grants ever – more complicated even than ReConnect grants.
- The Grants Add a Lot of Cost to Projects.
Some of the big ones include environmental and historical preservation studies; prevailing wages for grants over $5 million; bank letters of credit and a legal opinion on the lines of credit; construction contractors must certify commitments to workforce development, including participation in apprenticeship programs; buy America requirements that will drive up the cost of materials; heavy-duty reporting requirements that layer on work after taking the grant.
- The Grants Are Clearly Stacked Against New ISPs.
This is ironic because the rules as written by Congress and alluded to throughout the NOFO talk about favoring what the NOFO calls non-traditional broadband providers like non-profits, electric cooperatives, local governments, public utility districts, and Tribes.
- The Grants Want to See Skin in the Game.
While grants can be as high as 75%, the NTIA expects States to award grants to applicants that ask for the lowest amount of grant funding.
- There are Some Gotchas In the Financial Requirements.
[To start] an applicant must get a bank letter of credit just to apply for the grant – something that’s expensive and not easy for many entities to get.
- This is Going to Overwhelm State Broadband Offices.
The complexity of the grant rules will overwhelm most state grant offices, which are often newly staffed.
- Penalties for Non-performance.
Penalties against non-performing grant recipients can include the imposition of additional award conditions, payment suspension, award suspension, grant termination, de-obligation/clawback of funds, and debarment of organizations and/or personnel from using future federal funds.