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Commerce Department’s NTIA Releases Details for Funds Distributed Under IIJA

Notice of Funding Opportunity (NOFO) details parameters of Broadband, Equity, Access and Deployment (BEAD) program.

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Photo of Gina Raimondo from November 2021 by Demetrius Freeman

WASHINGTON, May 13, 2022 – The U.S. Commerce Department on Friday morning released the rules governing three separate federal broadband programs, laying down the rules for more than $45 billion in spending.

The agency’s National Telecommunications and Information Administration released the Notice of Funds Opportunity for its Broadband Equity, Access and Deployment program under the Infrastructure Investment and Jobs Act, as expected.

“In the 21st century, you simply cannot participate in the economy if you don’t have access to reliable, affordable high-speed internet,” Commerce Secretary Gina Raimondo said on Monday. She was expected to make additional remarks in Durham, North Carolina.

“Thanks to President Biden’s Bipartisan Infrastructure Law, Americans across the country will no longer be held back by a lack of high-speed internet access. We are going to ensure every American will have access to technologies that allow them to attend class, start a small business, visit with their doctor, and participate in the modern economy,” according to Raimondo’s remarks from a press release.

The IIJA, signed into law on November 15, 2021, required Commerce to release the BEAD NOFO by Monday, May 16. It had been expected to release those rules Friday.

Funding under the BEAD program is primarily directed through state broadband offices, acting under the supervision of the NTIA through the legislative framework established by IIJA, and the regularly rules laid out in the BEAD NOFO.

Want to know more about this game-changing document, and the powerful tools it brings to U.S. last mile broadband? Visit Broadband.Money‘s tools and resources, including four themes to watch for in the BEAD NOFO.

Amounts of funding and general framework

But the agency also released the rules for the Enabling Middle Mile Broadband Infrastructure and State Digital Equity Act programs on Friday, in advance of when IIJA required the notices.

The IIJA allocated $65 billion in funding for broadband spending, with at least $45 billion allocated to the NTIA through these three programs. The $42.5 billion for BEAD is designed to address last-mile broadband connectivity. The $1 billion for middle mile spending addresses the “secondary highways” — in between data centers and individual homes — that allow our internet to work. The additional $1.5 billion is for states to engage in programs designed to address digital equity.

Most of the additional $20 billion of broadband funds under IIJA are dispensed through the Federal Communications Commission’s Affordable Connectivity Program.

But BEAD itself also include money for planning grants: Under IIJA, each state is guaranteed to receive $100 million in BEAD funds for broadband infrastructure. Up to $5 million of those awards may be drawn down within three months.

Each state is able to receive at least $100 million in funding. Particular states may receive significantly more depending upon the proportion of “unserved” broadband homes in their state relative to the nation as a whole. Whether a particular home is “unserved” or not will be determined by broadband maps to be created by the FCC.

The funding is being dispensed by states to sub-grantees, including private, cooperative and municipal broadband providers, and the BEAD funding is designed primarily to address inadequate last-mile broadband connectivity throughout the country.

To participate in the BEAD Program, states and other eligible entities must submit a letter of intent and a planning funds budget. Each state will have support from NTIA staff.

The Enabling Middle Mile Broadband Infrastructure Program will award grants on a competitive basis to eligible entities for the construction, improvement, or acquisition of middle-mile infrastructure.

Friday’s launch of the State Digital Equity Planning Grant Program kicks off a series of Digital Equity Act steps that will invest $1.5 billion to heighten adoption and use, like digital literacy training, for those who need it most, including communities of color, rural communities, and older Americans.

New web site from the Commerce Department’s NTIA

In addition to program’s kickoff by Raimando, the NTIA launched a new web site, Internet for All, as well as an Internet for All Fact Sheet, with links to all three broadband programs.

The agency also released a series of webinars for every day next week. And the week after next, this writer will have the the opportunity to sit and and interview NTIA Administrator Alan Davidson at Mountain Connect on Tuesday, May 24.

“The resources in President Biden’s Bipartisan Infrastructure Law will allow us to bring broadband infrastructure to every corner of our country, make service affordable for everyone, and ensure users have the devices and digital skills they need,” said Deputy Secretary of Commerce Don Graves.

“Generations before us brought electricity to rural America and built the interstate highways,” said Davidson, who is also Assistant Secretary of Commerce for Communications and Information. “Our generation’s task is to connect all Americans online.”

NTIA gives preference to fiber

The 98-page Notice of Funding Opportunity provides answers to many of the questions for which the NTIA sought comment in January and February. Local coordination emerges as a strong theme in the BEAD NOFO.

In the NOFO, the NTIA provides a clear preference on some important questions, including fiber versus other technologies, addressing the underserved as well as the unserved, and ensuring no bar on municipal broadband.

“With respect to the deployment of last-mile broadband infrastructure, the Program prioritizes projects designed to provide fiber connectivity directly to the end user,” the NTIA’s NOFO reads on page 7.

The requirement also highlights how important it is that projects “provide a low-cost option to eligible subscribers” and that state awardees “have plans to address middle-class affordability.” (Also on page 7.)

Later, the NTIA emphasizes that to meet the threshold for being a “Priority Broadband Project,” a project must “provision service via end-to-end fiber-optic facilities to each end-user premises.” (Page 14.) In a footnote, the agency further notes that “a project that will rely entirely on fiber-optic technology to each end-user premises will ensure that the network built by the project can easily scale speeds over time to meet the evolving connectivity needs of households and businesses and support the deployment of 5G, successor wireless technologies, and other advanced services.”

The underserved are not slighted

Additionally, the NTIA is not unduly emphasizing the “underserved” part of the broadband marketplace.

IIJA established the definition of “unserved” as a location not capable of receiving broadband internet access at 25 Megabits per second (Mbps) download and 3 Mbps upload, which is the FCC’s current definition of broadband.

IIJA established a second definition of “underserved” as a location not capable of receiving broadband at 100 Mbps x 20 Mbps.

This means that a broadband project aiming to address the “underserved” as well as the “unserved” may require more robust broadband investment.

“The [BEAD] Program’s principal focus will be on deploying broadband service to unserved locations and underserved locations,” the NTIA writes on page 7 (emphasis in original).

“Eligible Entities that demonstrate they will be able to ensure service to all unserved and underserved locations will be free to propose plans that use remaining funds in a wide variety of ways, but NTIA underscores its strong preference that Eligible Entities also ensure deployment of gigabit connections to community anchor institutions such as libraries and community centers that lack such connectivity.”

This language, and the inclusion of “unserved” and “underserved” in the same phrase, strongly suggest that the NTIA is seeking to nudge states toward the more ambitious goal of ensuring that all Americans have access to 100 x 20 Mbps broadband.

Municipal broadband gets a warm embrace

Also noting that IIJA specifically requires that BEAD funds be available for private, cooperative and non-profit broadband providers, NTIA is firmly nudging states to eliminate or relax existing laws against municipal broadband.

On page 50 and 51, the NTIA writes:

  • Competition among broadband providers has the potential to offer consumers more affordable, high-quality options for broadband service. As required by the Infrastructure Act, in awarding subgrants for the deployment of a broadband network using grant funds, Eligible Entities may not exclude cooperatives, nonprofit organizations, public-private partnerships, private companies, public or private utilities, public utility districts, or local governments (“potential providers”) from eligibility for grant funds. In determining whether to approve an Eligible Entity’s Initial or Final Proposal, NTIA will consider whether the Eligible Entity has, after the enactment of the Infrastructure Act, adopted new laws, regulations, policies, procedures or any other form of rule or restriction that, in the determination of NTIA, seeks to exclude or has the effect of excluding any potential providers from eligibility for its subgrant competition. This could include new laws that have the effect of excluding providers from offering broadband service or rendering them incapable of effectively competing for subgrants.
  • Some laws of Eligible Entities concerning broadband, utility services, or similar subjects that predate the enactment of the Infrastructure Act may either preclude certain public sector providers from participation in the subgrant competition or may impose specific requirements on public sector entities, such as limitations on the sources of financing, the required imputation of costs not actually incurred by the public sector entity, or restrictions on the service a public sector entity can offer. NTIA strongly encourages Eligible Entities to waive all such laws for purposes of the Program. If an Eligible Entity does not do so, the Eligible Entity must identify all such laws in its Initial Proposal and describe how the laws will be applied in connection with the competition for subgrants. Such Eligible Entity must, in its Final Proposal, disclose each unsuccessful application affected by such laws and describe how those laws impacted the decision to deny the application.

Steps and deadlines

The NOFO kicks off a series of key milestones and grant application deadlines. Letters of intent from states must be received by 11:59 p.m. ET on July 18, 2022. All supplemental information must be submitted by 11:59 p.m. ET on August 15, 2022.

These states must then submit their five-year action plans to NTIA within 270 days of receiving their planning funds. States will be notified of future submission deadlines following the FCC’s release of the maps required by the Broadband Deployment Accuracy and Technology Availability (DATA) Act that was again included in IIJA. The FCC has said these maps will be available this fall.

Following those first three steps (the letter of intent, request for initial planning funds, and the five-year action plan), additional steps in the IIJA BEAD process include: (4) Program Fund Allocation and the Notice of Available Amounts, (5) the Initial Proposal, (6) the Challenge Process, (7) the Subgrantee Selection Process, (8) the 20 Percent Funding Release, and (9) the Final Proposal and Release of Remaining Funds.

Among the Commerce Department’s talking points include:

  • Connect All Americans to High-Speed Internet. For far too long, too many Americans have been left out or left behind because they don’t have access to reliable, affordable high-speed internet.
  • Close the Digital Divide. Beyond lacking access, many people in communities across the nation can’t afford Internet service, or they don’t have the skills necessary to effectively use the Internet or a connected device.
  • Make the Internet More Affordable. Internet access is essential to participate in today’s economy. For far too long, too many Americans have been left out or left behind because they don’t have access to reliable, affordable high-speed Internet.
  • Ensure that Children have Access to the Education they Deserve. During the pandemic, parents and children were asked to work and learn alongside one another at home – but far too many homes didn’t have internet access at the speeds and cost necessary to participate.
  • Expand Telehealth and Connect Vital Public Safety Services. For Americans who live in communities with slow or unreliable Internet connections, the COVID-19 pandemic posed an extraordinary challenge. Communities with limited or no access were left out and left behind without access to life-changing or life-saving technologies for education and telehealth.
  • Create Good-Paying American Jobs. A highly trained, diverse workforce that can safely do their jobs will be essential to connecting everyone in America to high-speed internet. The Internet for All programs will create thousands of good-paying jobs, and NTIA will work with states, territories, and other partners to ensure that those jobs are accessible to a workforce that looks like America.

Funding

Private Investors Can Jumpstart Community Networks, Say Broadband Breakfast Panelists

‘We believe that connectivity can be a new and distinct category in impact investing.’

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Photo of Ben Matranga, managing partner at Connectivity Capital.

WASHINGTON, September 29, 2022 – A new report from digital investment house Connectivity Capital is urging private investment firms to diversify their portfolios and plow more money into locally-owned and operated broadband networks worldwide.

Examining case studies from 10 communities worldwide, the September report suggests these firms, which often invest in healthcare and environment projects, put those social and environmental progress “impact investment funds” toward community connectivity providers. Connectivity Capital is such an investor and has funded projects in Africa, Asia, and Latin America.

At a Broadband Breakfast Live Online event Wednesday, Connectivity Capital Managing Partner Ben Matranga identified two common features of successful community providers: Innovation and cost-cutting. “Every single operator that we catalogued and certainty every operator that we invest in is doing something vastly different,” he said. “As you talk to these operators, they all have a culture of frugality,” he said.

Steve Song, telecommunications consultant and policy advisor at Mozilla, argued that community networks are “more than just about connectivity.” He said that, “In almost every case you see other kinds of social connections being built as a result of these initiatives.”

Similar stories from around the world

“Around the world we see a remarkably similar story, Community Connectivity Providers often delay or forgo expansion plans because of the lack of appropriate capital,” Matranga said in a prior interview with Broadband Breakfast. “What that means is that the over 3 billion unconnected people globally are locked out and left behind from the transformational power of the internet.”

Matranga added that he hopes the report will “demystify” the phenomenon of community-driven broadband networks and illustrate the best practices of successful CCPs – i.e., cooperatives, municipal networks, small operators, etc. He said hopes to encourage more impact investors to fund broadband projects.

“We believe that connectivity can be a new and distinct category in impact investing,” Matranga said.

The report comes at a time when multiple U.S. states have put into place roadblocks to municipal broadband builds, though some have rolled-back some of those restrictions. The issue with those types of projects, they say, is that they will prevent private competition.

The National Telecommunications and Information Administration, the Commerce agency tasked with distributing $42.5 billion to the states for broadband builds, has said that municipal builds must be considered when utilizing the federal money.

The reports recommends that policymakers accommodate the needs of various types of CCPs and design a simple, clear regulatory environment in which all can operate. The report also suggests state loans, subsidies, and technical-assistance initiatives.

As federal money hangs over the states, more digital investment firms are putting money toward broadband builds. For example, a Dutch pension fund manager, APG Group NV, last year bought a 16.7 percent stake in SiFi Networks, a network builder that specializes in open-access fiber-to-the-home. SiFi has built its trademark “FiberCity” projects nationwide and on Thursday announced the beginning of constructing on a citywide network in Kenosha, Wisconsin.

Editor’s note: This story and headline, published on the morning of Wednesday, September 28, as “Private Investors Can Jumpstart Community Networks, Says New Report,” have been updated to reflect comments made by speakers during the Broadband Breakfast Live Online event at 12 Noon ET on Wednesday.

Our Broadband Breakfast Live Online events take place on Wednesday at 12 Noon ET. Watch the event on Broadband Breakfast, or REGISTER HERE to join the conversation.

Wednesday, September 28, 2022, 12 Noon ET – Financing Mechanisms for Community Broadband

In the world of digital infrastructure financing, it often seems like there’s a “Private Sector is from Mars” and “Non-profits are from Venus” attitude. The conversations have been segmented and distinct. But a new approach suggests change is underway. A report by Connectivity Capital, in association with the Association for Progressive Communication, Internet Society, and Connect Humanity, provides a new paradigm: Community Connectivity Providers. What are they and why are they important? What are the various operational models and examples? What financial mechanisms have been used and how are investors allocating capital to expand broadband access? Join us for a Broadband Breakfast Live Online discussion exploring this new convergence of financing and broadband.

Panelists:

  • Ben Matranga, Managing Partner, Connectivity Capital
  • Steve Song, Telecommunications Consultant & Policy Advisor, Mozilla
  • Jim Forster, General Partner, Connectivity Capital
  • Drew Clark (moderator), Editor and Publisher, Broadband Breakfast

Panelist resources:

Ben Matranga is the Managing Partner at Connectivity Capital, the world’s first impact investment firm focused exclusively on expanding broadband access in emerging markets. Connectivity Capital manages over a dozen investments in digital infrastructure including ISPs operating in 16 countries across Sub-Saharan Africa and Southeast Asia. Ben has over fifteen years of experience leading private equity and venture capital investments in emerging markets. Ben previously was an Investment Officer with the Soros Economic Development Fund, a $350 million impact investment fund founded by George Soros, where he led a broad range of transactions co-investing with sovereign governments, Development Finance Institutions, and institutional investment funds.

Steve Song is a Policy Advisor with the Mozilla Corporation; a consultant on access regulation and policy to the Association for Progressive Communications; and a research partner with the Network Startup Resource Center. His blog, manypossibilities dot net, is a popular destination for anyone working on African telecommunications and internet issues. Since 2009, Steve has been actively maintaining public maps of undersea and terrestrial fibre optic infrastructure in Africa. He is also the founder of Village Telco, a social enterprise that manufactured low-cost WiFi mesh VoIP technologies to deliver affordable voice and Internet service in under-serviced areas. Previously, Steve worked at the International Development Research Centre (IDRC) where he led the organization’s ICTs for Development program in Africa, funding research into the transformational potential of ICTs.

In addition to serving as General Partner at Connectivity Capital, Jim Forster serves as the Managing Director of International Network Investments. He has over 35 years of hands-on leadership and technical expertise in networking equipment and Internet infrastructure. He spent over 20 years at Cisco Systems, starting in 1988 as the very first software development Manager, and became Distinguished Engineer leading various initiatives across IOS Software Development, System Architecture, and Business Development. He is a contributing author to Wireless Networking in the Developing World, the pioneering guide to building low-cost wireless network infrastructure in the developing world.

Drew Clark (moderator) is CEO of Breakfast Media LLC, the Editor and Publisher of BroadbandBreakfast.com and a nationally-respected telecommunications attorney. Under the American Recovery and Reinvestment Act of 2009, he served as head of the State Broadband Initiative in Illinois. Now, in light of the 2021 Infrastructure Investment and Jobs Act, attorney Clark helps fiber-based and wireless clients secure funding, identify markets, broker infrastructure and operate in the public right of way.

WATCH HERE, or on YouTubeTwitter and Facebook.

As with all Broadband Breakfast Live Online events, the FREE webcasts will take place at 12 Noon ET on Wednesday.

SUBSCRIBE to the Broadband Breakfast YouTube channel. That way, you will be notified when events go live. Watch on YouTubeTwitter and Facebook

See a complete list of upcoming and past Broadband Breakfast Live Online events.

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North Carolina Officials Tout Recent Investments in Rural Fiber

North Carolina hopes to achieve 80 percent subscription to broadband services among its citizens.

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Screenshot of Nate Denny, deputy secretary of the North Carolina Department of Information Technology’s Broadband and Digital Equity Division

September 9, 2022 – With $260 million being awarded by North Carolina to several fiber deployments, a key state official highlighted his strategy toward broadband infrastructure, community engagement, mapping and digital literacy initiatives.

Speaking on Wednesday at the Fiber Broadband Association’s Fiber for Breakfast event, Nate Denny, deputy secretary of the North Carolina Department of Information Technology’s Broadband and Digital Equity Division, said that the Tar Heel State allocated more than $1 billion from its American Rescue Plan funding for different facets of broadband deployment.

Dubbed the Growing Rural Economies with Access to Technology, $260 million of an anticipated $380 million is to be awarded, including $206 on August 31, 2022.

According to Denny, the $260 million already allocated will span 92 counties and connect more than 115,000 new homes and businesses.

Additionally, the private sector has provided $120 million in matching funds to the $260 million in public funds already spent, Denny said.

GREAT is a reimbursement program, Denny explained, and grantees have two years to complete projects under state supervision. Grantees thus far include major national companies – including AT&T and Charter – as well as small regional providers and cooperatives.

Beneficiaries of GREAT funding are expected to participate in the Federal Communications Commission’s Affordable Connectivity Program, which provides discounts on monthly internet bills and eligible device purchases to low-income households.

Denny said that North Carolina hopes to achieve 80 percent subscription to broadband services among its citizens in the next few years. Besides GREAT, the state’s American Rescue Plan–funded broadband programming includes the Stop Gap Solutions program, which provides targeted solutions such as satellite coverage to hard-to-reach locations. It also includes a broadband mapping initiative and a $50 million digital literacy effort.

In addition to current funding programs, Denny expects North Carolina to be the recipient of more than $800 million in upcoming Broadband Equity, Access, and Deployment program grants. He said that the state plans to funnel BEAD moneys into existing programs that have proven themselves effective.

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Funding

NTIA Middle Mile Director Stresses Need for Infrastructure to Withstand Climate Events

The director of the middle mile program said applicants must show “climate resilience” to get funding.

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Screenshot of Sarah Bleau, NTIA Middle Mile program director

WASHINGTON, September 8, 2022 – The director of the National Telecommunications and Information Administration’s middle mile program on Wednesday stressed the importance of ensuring projects can withstand natural events, such as storms, to get funding from its $1 billion program.

Sarah Bleau said Wednesday on a Broadband Breakfast Live Online event that – despite the Infrastructure, Investment and Jobs Act not mentioning climate resilience, the notice of funding opportunity for funds requires that a plan be in place for infrastructure resiliency against climate- and weather-related events.

Applications for funding are due September 30.

NTIA wants letter of credit, proof of area in need

Bleau also emphasized the need for applicants to show proof of an area to be served and to get a letter of credit, which will be requested by the agency from the bank. A letter of credit is a letter that’s addressed by a banker to a correspondent stating that the person named can draw upon the writer’s credit up to a chosen amount.

Screenshot of Sarah Bleau, NTIA Middle Mile program director

The letter of credit is intended to help the NTIA evaluate what level of risk the applicant is at. Bleau has had to address controversies surrounding the letter of credit during a virtual session on the program, saying it is “not so much protecting the money and so far as helping to determine and do a risk assessment.”

Bleau also fielded questions about extensions to apply to the program, saying there currently will be no extensions.

Among the other most-asked questions about the program, she said, include the use of matching funds to facilitate infrastructure grants. In almost all cases, applicants are required to provide a 30 percent match for grant proposals.

Our Broadband Breakfast Live Online events take place on Wednesday at 12 Noon ET. Watch the event on Broadband Breakfast, or REGISTER HERE to join the conversation.

Wednesday, September 7, 2022, 12 Noon ET – Assessing the NTIA’s Middle Mile Grant Application Process, an Event Headlined by NTIA’s Sarah Bleau

Most of the attention from the Infrastructure Investment and Jobs Act has been focused on last-mile broadband deployment. But the deadline for IIJA’s Middle Mile grant program is coming up on September 30, 2022. In this special Broadband Breakfast Live Online session, we’ll begin with a brief headline presentation by Sarah Bleau, Middle Mile Program Director at the National Telecommunications and Information Administration, speaking about the $1 billion program, how the agency is handling the program, and how Middle Mile grants will impact the $42.5 billion last-mile broadband program.

Panelists:

  • Sarah Bleau, Middle Mile Program Director, National Telecommunications and Information Administration
  • Doug Maglothin, Executive Director, Diamond States Network
  • Mark Goldstein, President of the International Research Center
  • Drew Clark (moderator), Editor and Publisher, Broadband Breakfast

Panelist resources:

Sarah Bleau (center) joined the National Telecommunications and Information Administration in February 2021 as the Middle Mile Program Director. She took on this leadership role for the Broadband Infrastructure Program in Fall 2021 and saw the program through to the award recommendations and announcements made in February 2022. Sarah has extensive industry experience from spending the better part of her career buying, building, and selling fiber networks Sarah holds a master’s degree in business administration from the Illinois Institute of Technology.

Doug Maglothin (left) is presently serving as the lead on the Diamond State Networks middle mile project which is the largest and fastest networks of its kind in all of Arkansas. Founded by electric cooperatives, DSN’s goal is to make Arkansas the most significantly connected state in the country by promoting fast and affordable broadband to every corner of the state. Working alongside the coops, Doug helped to develop Diamond State Networks from its inception in 2020 as a consultant by way of his firm, Leverage Broadband Strategies where he serves as a Partner and Chief Strategy Officer.

Mark Goldstein (right) is chairman of the Arizona Telecommunications & Information Council and president of the International Research Center.

Drew Clark (moderator, not pictured) is the Editor and Publisher of BroadbandBreakfast.com and a nationally-respected telecommunications attorney. Under the American Recovery and Reinvestment Act of 2009, he served as head of a State Broadband Initiative in Illinois. Now, in light of the 2021 Infrastructure Investment and Jobs Act, Attorney Clark helps fiber-based and wireless clients secure funding, identify markets, broker infrastructure and operate in the public right of way. He is also the President of the Rural Telecommunications Congress.

Photo from the National Association of Counties

WATCH HERE, or on YouTubeTwitter and Facebook.

As with all Broadband Breakfast Live Online events, the FREE webcasts will take place at 12 Noon ET on Wednesday.

SUBSCRIBE to the Broadband Breakfast YouTube channel. That way, you will be notified when events go live. Watch on YouTubeTwitter and Facebook

See a complete list of upcoming and past Broadband Breakfast Live Online events.

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