WASHINGTON, May 23, 2023 – Representatives at Tuesday’s Oversight Committee of the National Telecommunications and Information Administration expressed concern that the $42.5 billion Broadband Equity Access and Deployment program is prioritizing fiber builds to the detriment of rural communities. 

The NTIA’s authority and effective legal power was last authorized in 1993. Since then, the communications landscape has changed drastically. 

Recently, the NTIA submitted its 2024 budget request for $117.3 million, nearly double its current authorization. The hearing delved into the inner workings of the agency to ”ensure that NTIA is being good stewards of tax dollars allocated for broadband expansion.” 

Representatives expressed concern that fiber is unjustly prioritized in the BEAD Notice of Funding Opportunity. Building fiber to the premises can be economically impractical for many rural areas. 

In response, sole witness and NTIA Administrator, Alan Davidson, assured representatives that the administration expects many types of technologies to be deployed as part of the BEAD program. 

States are given the prerogative to determine what their best solution for deployment is, he said. States can determine for themselves what price point will qualify a project as an extremely high-cost deployment. 

Although states cannot close off applications to telecom companies based on technology, a fiber company that applies for funding is most likely to receive grant awards unless the area in question is considered an extremely high-cost location.  

Despite this assurance, many representatives, including August Pfluger, R-Texas, expressed concern that rural unserved and underserved locations will remain unfunded throughout the BEAD process. 

We will not accept state plans that do not show conclusive steps on connecting every single unserved address in their jurisdiction, said Davidson. 

Spectrum concerns

For the first time in U.S. history, there is no additional spectrum coming down the pipeline. The NTIA is working on developing a sustainable national spectrum strategy that will represent a government-wide approach to maximizing the potential of the nation’s spectrum resources. 

In April, the NTIA submitted a request for comment regarding the development and implementation of this strategy. It sought comment on the nation’s spectrum needs, how best to engage in long-term spectrum planning, and technology innovations that could better manage the nation’s spectrum resources. 

The NTIA is currently analyzing these responses and is on track to develop a spectrum policy that is “evidence and science based,” said Davidson. It is essential that the nation has a baseline policy to address spectrum conflicts, he said. 

Freeing up spectrum will require interagency coordination to determine where we can repurpose and increase sharing, said Davidson.  

Rep. Doris Matsui, D-Calif., is heading two bills, the Spectrum Relocation Enhancement Act and the Spectrum Coexistence Act that would make updates to the spectrum relocation fund that compensates federal agencies to clear spectrum for commercial use and would require NTIA to conduct a review of federal receiver technology to support more intensive use of limited spectrum.  

“Ensuring the federal government speaks with one voice on spectrum issues is foundational to Americas continued global leadership,” said Matsui. “And the NTIA is at the tip of the spear.” 

The Committee also considered 18 pieces of draft legislation that would elevate the NTIA’s role in coordinating interagency broadband funding, spectrum management, and cybersecurity policy development. One of which is the NTIA Reauthorization Act of 2023 that would “modernize the agency’s policies and mission and authorize its funding to match current funding levels.” 

WASHINGTON, May 17, 2023 – The National Telecommunications and Information Administration should not require a letter of credit for its grant programs because it squeezes out small and minority-owned service providers, agreed industry leaders in a Broadband.Money event Wednesday. 

Under current regulations for the $42.5-billion Broadband Equity, Access and Deployment program, grant applicants must provide a letter of credit to demonstrate their financial capacity to meet the program’s obligations throughout the construction process. A letter of credit is a document a bank provides on behalf of a network operator to guarantee that in the event of default of the build, the bank will reimburse the agreed upon funds to the NTIA.  

Grant awardees are required to submit a letter of credit of 25 percent of the project costs on top of the 25 percent match requirement. With limited exceptions, the NTIA will enforce this regulation rigorously, the Commerce agency has said. 

While the government aims to protect taxpayer dollars by securing a financial guarantee, industry experts questioned the effectiveness of a letter of credit in this context. “A letter of credit is a singularly bad way to go about this,” said Elizabeth Bowles, president of Aristotle ISP. 

Due to the large investment, banks insist on cash collateral, which significantly increases the cost of receiving grant funds, said Bowles. Furthermore, the cash held by banks as collateral is essentially untouchable during the project, which limits the capital available to invest in the projects, she added. 

The requirement disproportionately affects minority-owned and small businesses that often do not have the necessary capital to get a letter of credit and rely on non-cash assets, said Bowles. 

Several BEAD provisions require the inclusion of small and minority-owned ISPs, but the NTIA has made it nearly impossible for these businesses to succeed with its letter of credit requirements, said Philip Macres, principle of Klein Law Group. 

Industry leaders and trade associations need to “get loud” on this subject and pressure the NTIA to change its rules, urged Bowles.  

Beside removing the letter of credit requirement entirely, Bowles also said other solutions to protect the taxpayer may include insurance, performance bonds that require repayment if the project is not completed, and expanding who can issue a letter of credit to include other wealthy entities and venture capitalist funds.

WASHINGTON, March 1, 2023 – The National Telecommunications and Information Administration announced Wednesday that it is seeking comment on how to structure the $2.5 billion that the Digital Equity Act provides to promote digital equity and inclusion. 

As part of the Infrastructure Investment and Jobs Act, the Digital Equity Act consists of two sub-programs, the State Digital Equity Capacity grant and the Digital Equity Competitive grant. Comments will guide how the NTIA will design, regulate, and evaluate criteria for both programs. 

“We need to hear directly from those who are most impacted by the systemic barriers that prevent some from fully utilizing the Internet,” Secretary of Commerce Gina Raimondo said Wednesday at the National Digital Inclusion Alliance’s Net Inclusion event in San Antonio. 

See Commerce Secretary Raimondo’s remarks at Net Inclusion:

The request for comment is part of NTIA’s strategy to hear diverse perspectives in implementing its goal to ensure every American has the skills and capacity needed to reap the benefits of the digital economy, stated a press release. 

The $1.44 billion State Digital Equity Capacity grant will fund implementation of state digital equity plans which will strategically plan how to overcome barriers faced by communities seeking to achieve digital equity.  

Simply making investments in broadband builds is not enough, said Veneeth Iyengar, executive director of ConnectLA, speaking at a Brookings Insitution event in December. Bringing digital equity means “driving adoption, digital skills, and doing the kinds of things that we need to do to tackle the digital divide.” 

The $1.25 billion Digital Equity Competitive grant program will fund anchor institutions, such as schools, libraries, and nonprofits, in offering digital inclusion activities that promote internet adoption. 

“Community-anchor institutions have been and are the connective tissue that make delivering high-speed internet access possible,” said Alan Davidson, head of the NTIA at AnchorNets 2022 conference. 

This announcement follows dissent on the definition of digital discrimination. Commenters to the Federal Communications Commission disagree on whether the intent of a provider should be considered when determining if the provider participated in digital discrimination. There has been no response from the FCC.