Broadband Breakfast posts an article from Lori Adams, cu vice president of broadband policy and funding strategy for Nokia, on whether/how rural providers can prepare to apply for BEAD. With years of MN State Broadband funds, I feel like Minnesota providers are in a little different position than providers in other states. (Although BEAD will certainly be different.) Yet, I found the section on complaints about BEAD to be interesting…

Common complaints about BEAD

The first is that the states have already made up their mind who they want to partner with for BEAD. To put it bluntly, this is completely false.

The money is not predetermined to go to a single carrier or group of providers. This will be a competitive process in every state. Scoring will determine which applicants are successful. The higher an applicant scores, the more likely it is an applicant will win. How a state defines the project areas to be “bid on” for BEAD may favor certain types of providers, but nothing is pre-determined. In fact, states are actively looking for rural providers to engage and participate in the process.

The next complaint is centered on the BEAD rules. Often we hear – “well, it depends on what the rules are in the states.” At this juncture, most of the rules are determined and there is more than enough information available to help inform decisions.

For example, The National Telecommunications and Information Administration first released their Notice of Funding Opportunity in May of 2022, and nearly 90% of the program rules are the same in every state.

Additionally, every state has released its Initial Proposal Volume 2, outlining the specific program rules for that state. Almost all the states are now moving into the mapping challenge processes. This means that almost all the critical details are available to help providers start preparing an application now.

Others believe that BEAD is too complex, and it is too early to think about it. Yes, BEAD is complex. It is arguably the most complicated broadband funding program we have ever seen. But it’s complex for everyone, and the longer an applicant waits to prepare, the more complex it will become.

In most cases, providers will need at least three to four months to prepare an application. For example, it’s a requirement in every state that a professional engineer (PE) stamps the network designs, budgets and other documentation that must be submitted as part of a BEAD application.

Finding and contracting with a PE takes time, as does the preparation of the necessary the documentation. Once a grant window opens, it will most likely be too late to find a PE and have this work completed.

There is also the belief that BEAD costs too much and that matching funds are too high. Yes, there is a minimum match requirement of 25%, and an applicant may very well need to put in more money to be competitive. However, other federal grant and loan programs including those through USDA’s Rural Utilities Service range from a 50% to 100% subsidy.

State and federal programs such as the Capital Projects Fund (CPF) programs contain a 20-50% matching requirement, and we are hearing from states that these programs are up to five times oversubscribed, with matching funds exceeding 50% in some cases.

For BEAD, states will consider waiving the match for the highest cost area, and private equity is clamoring at the bit to assist with financing. While cost is a factor, someone will figure out how to make this work.

The final excuse repeated is that other funding programs are preferred. Well, if the mandate of BEAD to reach every single unserved and underserved location is achieved, those future funding programs may very well disappear. As it is, ReConnect through USDA is funding a fraction of the money that is available for BEAD. Further, it’s a risk to hedge your bet that there will be future unserved locations in your service area qualified to be funded through these other programs.