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Demanding Requirements on NTIA’s BEAD Program May Depress Broadband Participation

What are the downsides of having too many grant requirements?



Photo of Ross Lieberman by Jericho Casper

KEYSTONE, Colo., June 7, 2022 – Panelists at the Mountain Connect 2022 conference in May warned against putting too many onerous conditions on prospective recipients of billions in federal infrastructure money, arguing some provisions will require further discussion or potential modification or else it will discourage applications.

Industry observers at the conference who studied the notices of funding opportunity for the $42.5-billion Broadband, Equity, Access and Deployment  Program, which was released by the National Telecommunications and Information Administration on May 13, argued that money from the program contains too many strings attached, including environmental, tax and rate regulation implications, for it to be fully viable as an option for service providers.

Steven Coran, chair of law firm Lerman Senter’s broadband, spectrum, utilities and communications infrastructure practice group, said BEAD applicants need to consider the tax implications of the program, as well as the reimbursement structure of the program. In addition, Coran said that planet resilience provisions, including environmental preservation studies, are additional expenses grant recipients should account for.

BEAD applicants need to similarly understand the labor standards required by the NOFO, added Valerie Wimer, vice president of business development at telecom consulting company JSI, because those provisions will also drive-up costs, especially with the current labor market.

“I think that putting too many onerous conditions on recipients is actually not in the public’s interest, and states and NTIA should really take this into account,” said Ross Lieberman, senior vice president of government affairs for cable industry group ACA Connects.

“First, it can depress participation in the program, so you end up having a less competitive grant program. Second, the providers are going to internalize these costs, and it will result in them asking for more money, resulting in less money available to reach the un- and under- served. Finally, providers could end up being in a situation where they are more likely to default after the fact, because they couldn’t properly anticipate what these conditions could mean for a network 20 years in the future.”

Julie Darrington, vice president of consulting at Vantage Point Solutions, added that, “There are significant impacts when you start layering on all of the different costs.

“When you think about the matching requirement, the taxable income, add in letter-of-credit costs, prevailing wages…When you start looking at all those pieces and parts it really impacts the financials,” she said. “From a financial feasibility standpoint, I’m concerned that the profitability and the long-term sustainability of [BEAD funded] networks are going to be tough in many cases, especially in rural areas.”

Concerns expressed about broadband rate regulation

Provisions in the BEAD NOFO require the inclusion of a low-cost broadband option. Some industry groups fear that might lead to regulation of broadband rates.

Yet Lieberman said the NTIA has yet to prescribe how states should rank, or evaluate, applicants based on these requirements.

“I haven’t seen any kind of deployment program with this level of rate regulation,” Lieberman told the audience, largely made up of municipal leaders and representatives of service providers. “This is an area that is not as well defined in the rules yet, and so we’re going to be watching to see how the NTIA and states end up dealing with this.”

Lieberman maintained that BEAD applicants need to consider the revenue that they will be able to generate from their proposed networks, to then determine what they are going to bid for, in order to be able to sustain the network for the life of the program. BEAD applicants first have to consider the cost to deploy a network, but they must then consider the slew of additional costs necessary to comply with grant requirements.

There is some discussion in the BEAD NOFO about the potential for multiple rounds of state funding. The panelists explained that as the grant process gets underway, the rules may ease up, but that shift cannot be expected for at least two to three years.

Reporter Jericho Casper graduated from the University of Virginia studying media policy. She grew up in Newport News in an area heavily impacted by the digital divide and has a passion for universal access and a vendetta against anyone who stands in the way of her getting better broadband.


House Democrat Introduces Bill to Add Local Parks to E-Rate Program

The Technology in the Parks Act would also put parks in line for used computers and equipment from federal agencies.



Screenshot of Rep. Danny Davis, D-Illinois, at a House hearing on November 15.

WASHINGTON, December 1, 2023 – A House Democrat announced on Friday a bill that would fund broadband internet and devices for public parks.

The Technology in the Parks Act would expand the Federal Communications Commission’s E-Rate program to include local parks. That program currently provides approximately $4 billion in yearly broadband subsidies for schools and libraries through the FCC’s Universal Service Fund. Adding public parks would allow them to request government money toward the cost of internet each month.

The move is “crucial to bringing broadband access to these community spaces,” said the bill’s sponsor, Rep. Danny Davis, D-Illinois, in a statement.

In an effort to provide devices on the subsidized connection, the bill would also put parks in the U.S. General Services Administration’s Computers for Learning program. That would give parks access to computer equipment no longer being used by federal agencies. 

The bill would also tap the Department of Labor to implement a grant program for “technology training programs” in local parks.

Similar programs aimed at helping people navigate and participate in online spaces are drawing funds from other federal agencies. The Commerce Department’s $42.5 billion broadband expansion program makes room for states to fund digital literacy trainings, and its $2.75 billion Digital Equity Act programs are targeted at such efforts.

Reps. Raúl Grijalva, D-Arizona, and Bruce Westerman, R-Arkansas, introduced a similar bill on November 29 that would expand broadband in national parks managed by the federal government.

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North Carolina Releases Final Guidance on $100 Million Pole Replacement Program

Providers may receive up to $10,000 for each utility pole they replace in unserved areas.



Photo of Nate Denny, deputy secretary for broadband and digital equity at the North Carolina Department of Information Technology.

WASHINGTON, November 27, 2023 – North Carolina’s broadband office released on Monday final guidance for its $100 million pole replacement program.

The program, funded by the American Rescue Plan Act, will reimburse broadband providers for utility pole replacement costs. Expanding networks can involve attaching equipment to those utility poles. When a pole needs to be replaced to accommodate more equipment, pole owners typically pass the cost on to attachers.

Telecommunications companies have cited this extra cost as a barrier to quick broadband deployments, something utility companies dispute. The two industries have been in conflict on the issue for years, with both continuing to push the FCC to weigh in on a cost sharing regime.

North Carolina’s plan is an effort to smooth over the issue for future broadband expansion efforts, Nate Denny, the state department of information technology’s deputy secretary for broadband and digital equity, said in a statement. 

“It addresses a significant barrier to closing the digital divide in remote parts of our state,” he said.

Under the program, broadband providers can apply for 50 percent of the replacement cost for each pole replaced, up to $10,000 per pole. Pole replacement costs in unserved areas after June 1, 2021 are eligible for reimbursement. 

The program will kick off in February 2024 and accept applications from qualified providers.

The FCC has authority in 26 states over the terms of agreements between investor-owned utilities and telecom companies, which does not include publicly owned utilities or broadband providers that solely provide internet. The agency is set to vote on updated pole attachment rules at its December meeting.

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Expert Opinion

Kate Forscey: National Security and Global Success Depend Upon Prioritizing Telecom Funding

The Affordable Connectivity Program and the Rip-and-Replace program are both central funding needs for the industry.



The author of this Expert Opinion is Kate Forscey, contributing fellow for the Digital Progress Institute

With the government now funded into the new year, it’s time for Congress to take another look at its broader priorities, especially when it comes to the race with China for dominance in next-generation technologies. Whether it’s AI or cloud computing or virtual reality, if the United States is to remain competitive, we need to make secure and effective communications a priority. This means finally connecting all Americans to high-speed broadband and ensuring that our connectivity cannot be undermined by foreign adversaries.

Two popular programs are central to this goal: the Affordable Connectivity Program and the Rip-and-Replace program. Both of these programs have tremendous bipartisan, bicameral support; but both have been underfunded and now risk dying on the vine. Congress has the opportunity to fully fund these programs if it has the will to do so.

Let’s break it down.

The Affordable Connectivity Program provides low-income American families and veterans with discounts on Internet service and connectivity equipment, including higher discounts for those living on Tribal lands. With affordable broadband, more Americans can get online and be a part of the digital economy.

The ACP has been wildly successful, connecting over 21 million households to essential broadband they could otherwise not afford. And it continues to garner widespread support, with the vast majority of voters (78%) calling for its extension, including 64% of Republicans, 70% of Independents, and 95% of Democrats.

Congress provided the ACP with $14.2 billion in 2021—but funding is now running low and is projected to be fully exhausted by spring 2024. Governors, lawmakers on both sides of the aisle, public interest groups, and Internet service providers are all raising the alarm about its imminent depletion. That’s why the Biden Administration in October called on Congress to replenish the program’s coffers with an additional $6 billion.

A good start, but not the whole story. Our foreign adversaries are well known for their espionage, and while a spy balloon might get the attention, a far more insidious problem lurks in our communications networks: equipment designed and produced by Chinese suppliers Huawei and ZTE. A bipartisan Congress passed the Secure and Trusted Networks Act to eradicate national security threats such as these, but sufficient funding for the Rip and Replace program has never materialized.

Again, the Biden Administration has stepped up and identified a need for $3.1 billion to fully fund the program as a “key national security priority” in its emergency supplemental funding request. It’s a narrative we can all get on-board with: that broadband falls under the umbrella of national security as a whole. American consumers and institutions both benefit from American-built networks and increased protection at home. But communications providers can’t live up to these needs on their own.

As it stands, the responsibility to get affordable, secure connectivity programs across the finish line rests with Congress. Even with a consensus of support for these two programs, the devil is in the details of how to make the price tags palatable to enough policymakers on Capitol Hill. The key is ensuring that any changes preserve the widespread efficacy of the program that has made it popular so far.

For example, Congress could cut the cost of the ACP by limiting the additional Tribal funding to rural Tribal lands. Any such change should be grounded in an evaluation of existing need in urban areas, but could be an opportunity to ensure funds are being directed to areas of greatest need. And Congress should consider indexing the ACP to inflation. The high inflation of recent years has wreaked havoc on the budgets of consumers—and inflation-proofing the program would ensure that broadband remains affordable for all Americans even should inflation come back.

As for Rip-and-Replace, those of us urging for more funds could concede putting safeguards in place to ensure the money is being used for its intended purpose – the kind of compromise needed to get such policies across the finish line

These are just some ideas as we head into the final funding fight. Not everyone is going to be on the same page on what is and isn’t working best, but shared success starts by recognizing that we all have the same endgame. Congress must ensure that adequate funding for the ACP and Rip and Replace program are included in any year-end spending package. We have an all-too-rare opportunity to win the race for high-tech dominance—we just need to provide the resources.

Kate Forscey is a contributing fellow for the Digital Progress Institute and principal and founder of KRF Strategies LLC. She has served as senior technology policy advisor for Congresswoman Anna G. Eshoo and policy counsel at Public Knowledge. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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