The Institute for Local Self Reliance reports…

A massive coalition of more than 300 broadband policy experts and organizations have written a letter to the U.S. government, warning that smaller broadband providers, nonprofits, and municipalities will be elbowed out of an historic $42.45 billion broadband grant program without some notable changes to program rules.

At the heart of their concerns sits the Broadband Equity Access and Deployment (BEAD) program, made possible by the recently passed infrastructure bill, and administered by the National Telecommunications and Information Administration (NTIA). The grant program is a once-in-a-lifetime opportunity to put a significant dent in America’s longstanding digital divide.

But BEAD program rules currently require grant recipients to obtain a letter of credit (LOC) from a bank, collateralized by cash or cash-equivalent. They also require grant winners to provide “matching funds of not less than 25 percent of project costs,” though the latter restriction can be waived in some high deployment cost areas.

While the restrictions were intended to reduce the risk of project failure (a touchy subject for the government in the wake of problems with the FCC’s RDOF program), they require grant recipients to lock away vast and untouchable sums of capital for the duration of any broadband build, most of which last several years.

According to the coalition’s letter to lawmakers, such requirements present unnecessary obstacles for smaller ISPs and cash-strapped municipalities, undermining the infrastructure bill’s goal of equitable, affordable broadband for all.

“With the additional 25 percent match requirement, recipients will have a capital hurdle of more than 60 percent of their grant,” the coalition wrote. “We estimate a provider seeking a $7.5 million grant for a $10 million project will need at least $4.6 million of their own capital up-front.”

It is worth reading the full article. It’s worth looking at these issues now. Iin 2020, six of the top ten ranked counties in Minnesota were served by cooperatives; those six are rural counties. There are unique opportunities for local providers to serve areas such as rural counties where a desire to invest in the community as well as the business. It would be a shame to disadvantage those providers.