NTIA
NTIA Should Remove Letter of Credit Requirement in BEAD Program, Event Hears
Expanding available alternatives to letters of credit will increase the availability of BEAD for small and minority-owned businesses.

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.
Funding
Representatives Focus in on Fiber Prioritization and Spectrum Management at NTIA
House Committee members said they wanted to ensure that the NTIA is appropriately managing funds to support rural areas.

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.”
Digital Inclusion
NTIA Seeks Comment on How to Spend $2.5 Billion in Digital Equity Act
National Telecommunications and Information Administration is seeking comment on how to structure the programs.

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.
5G
Innovation Fund’s Global Approach May Improve O-RAN Deployment: Commenters
The $1.5 billion Innovation Fund should be used to promote global adoption, say commenters.

WASHINGTON, February 2, 2023 – A global approach to funding open radio access networks will improve its success in the United States, say commenters to the National Telecommunications and Information Administration.
The NTIA is seeking comment on how to implement the $1.5 billion appropriated to the Public Wireless Supply Chain Innovation Fund as directed by the CHIPS and Science Act of 2022. The grant program is primarily responsible for supporting the promotion and deployment of open, interoperable, and standards-based radio access networks.
Radio access networks provide critical technology to connect users to the mobile network over radio waves. O-RAN would create a more open ecosystem of network equipment that would otherwise be reliant on proprietary technology from a handful of companies.
Global RAN
Commenters to the NTIA argue that in order for O-RAN to be successful, it must be global. The Administration must take a “global approach” when funding projects by awarding money to those companies that are non-U.S.-based, said mobile provider Verizon in its comments.
To date, new entrants into the RAN market have been the center for O-RAN development, claimed wireless service provider, US Cellular. The company encouraged the NTIA to “invest in proven RAN vendors from allied nations, rather than focusing its efforts on new entrants and smaller players that lack operational expertise and experience.”
Korean-based Samsung Electrontics added that by allowing trusted entities with a significant U.S. presence to compete for project funding and partner on those projects, the NTIA will support standardizing interoperability “evolution by advancing a diverse global market of trusted suppliers in the U.S.”
O-RAN must be globally standardized and globally interoperable, Verizon said. Funding from the Public Wireless Innovation Fund will help the RAN ecosystem mature as it desperately needs, it added.
Research and development
O-RAN continues to lack the maturity that is needed for commercial deployment, agreed US Cellular in its comments. The company indicated that the complexity and costliness of system integration results from there being multiple vendors that would need to integrate but are not ready for full integration.
Additionally, interoperability with existing RAN infrastructure requires bi-lateral agreements, customized integration, and significant testing prior to deployment, the comment read. The complicated process would result in O-RAN increasing the cost of vendor and infrastructure deployment, claimed US Cellular, directly contrary to the goals of O-RAN.
Several commenters urged the NTIA to focus funding projects on research and development rather than subsidizing commercial deployments.
The NTIA is already fully engaged in broadband deployment in unserved and underserved areas through its Broadband Equity, Access and Deployment program, said Verizon. The Innovation Fund will better advance its goals by funding projects that accelerate the solving of remaining O-RAN technical challenges that continue to delay its deployment, it continued.
US Cellular argued that the NTIA should “spur deployment of additional independent testing and certification lab facilities… where an independent third party can perform end to end testing, conformance, and certification.”
The Innovation Fund should be used to focus on technology development and solving practical challenges, added wireless trade association, CTIA. Research can focus on interoperability, promotion of equipment that meets O-RAN specifications, and projects that support hardware design and energy efficiency, it said.
Furthermore, CTIA recommended that the Administration avoid interfering in how providers design their networks to encourage providers to adopt O-RAN in an appropriate manner for their company. Allowing a flexible, risk-based approach to O-RAN deployments will “help ensure network security and stability,” it wrote.
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