NTIA Has 'Keen Interest' in BEAD Oversight: Davidson

NTIA has a “keen interest in making sure that there's strong oversight” on how the $42.5 billion broadband, equity, access and deployment program is spent, said Administrator Alan Davidson Tuesday during a Mountain Connect conference in Colorado (see 2205130054). The agency “left flexibility” in its notice of funding opportunity, Davidson said, but included “basic requirements” on accountability, subgrantees and affordability to ensure that “federal money is being spent wisely,” he said: “We tried to take the principle of if it didn’t need to be in the notice, it’s not there.”

States will have flexibility in their plans, including in how they define what a low-cost broadband option is in their plans, Davidson said, but providers receiving BEAD funding must have a low-cost option. States will also need to “demonstrate an approach to affordability” and prioritize this factor when they do competitive grant making, he said.

About 35 states said they plan to participate in the program, Davidson said, and about 25 states and territories have submitted letters of intent since NTIA released its NOFO (see 2205180054): “We need people’s help to … push the states to engage.” The agency has been building out its staff to ensure one person is assigned to work with each state on the BEAD program, he said, noting that states have until July 18 to submit a letter of intent.

There’s a “tension between our strong desire to get money out there quickly but … [an] absolute need to do this right,” Davidson said, and “it starts with good maps.” NTIA’s middle-mile infrastructure grant program will “happen much more quickly” and applications will begin to be accepted this year, he said: It’s “the right approach” because "the idea is that’s a force multiplier for our last mile work that we’ll be funding through BEAD.”

The BEAD program "put states in the driver's seat, not Washington, on the theory that our communities have the best understanding of the needs on the ground," said Sen. Michael Bennet, D-Colo. It also “significantly raised standards for new broadband,” Bennet said, adding that the "mix between focusing on buildout to higher speeds and subsidies" was to address the needs of those that may have existing infrastructure in their area but couldn't afford service.

The American Association for Public Broadband has concerns that the BEAD program has “a cumbersome application process with letter-of-credit requirements” that will be “steep barriers of entry for local government, nonprofits and small ISPs,” AAPB board member Bob Knight said later at a Mountain Connect news conference. Multiyear rollout of BEAD funds could limit “options for those deploying prior to 2024,” he added.

Davidson acknowledged whether BEAD funding to commercial grantees will be considered taxable income is a “big issue for providers” and is part of an “ongoing conversation within the administration.” NTIA also expects to issue future guidance on the program’s buy American provision, he said, including potential waivers.

While encouraged NTIA’s NOFOs included municipal models, AAPB wishes they went further to force states with municipal broadband restrictions to lift them, said Knight: AAPB was glad to hear Davidson say rules could be refined.

It's especially challenging for local communities to get letters of credit, said AAPB board member Kim McKinley, Utah Telecommunication Open Infrastructure Agency (Utopia) Fiber’s chief marketing officer. Requiring two years of operational or managerial experience is another barrier, she said. “How … does a community have that if they’ve never owned or operated a municipal broadband system?” While states must disclose muni broadband restrictions, it’s up to NTIA to decide how to respond, said McKinley. "I would be interested to see where they go with that.”

AAPB has raised $200,000 since the muni broadband advocacy group was announced May 4, said Knight. The group has been meeting with interested vendors, localities, nonprofits and others, while establishing committees on advocacy and policy, education and member engagement, he said. It’s tough to lobby in 50 separate states, so AAPB plans to identify key first targets, said Knight. State legislators handle many issues and often work part time, he noted. “Capturing their attention is going to be a huge challenge.”