BEAD Letter of Credit Concern, Viasat joins Space Force, $7 Million FCC Connectivity Funding

Broadband experts express concern about letter of credit requirements for BEAD.

BEAD Letter of Credit Concern, Viasat joins Space Force, $7 Million FCC Connectivity Funding
Illustration from the U.S. Space Force

September 6, 2023 – A Wednesday letter from broadband industry is urging the Commerce agency to drop a requirement for providers to get a letter of credit from the bank to get funding from the Broadband Equity, Access and Deployment program and consider two alternatives.

The group of some 300 signatories said in the letter to Alan Davidson, head of BEAD administrator National Telecommunications and Information Administration, and Commerce Secretary Gina Raimondo the credit requirement will leave out smaller community-based providers from access to funding.

The requirement itself indicates that communities who apply for BEAD funding must procure a letter of credit equating to 25 percent of their grant award, meaning providers will need to back the credit with cash as collateral to compensate for the risk. It is a requirement that, some say, is difficult to meet for some smaller providers in rural and underserved areas.

“While we support the NTIA’s intention of ensuring providers are accountable for delivering on grants, far from safeguarding taxpayer dollars, the LOC requirement will prevent the internet service providers (“ISPs”) best positioned to connect unserved and underserved Americans from participating,” the letter said, adding the requirement goes against the goal of the BEAD program’s promise of creating equitable access and improved broadband infrastructure in places that need it most.

The letter argues for two alternatives: the issuance of performance bonds where providers guarantee the completion of a project; or delayed reimbursement, where money is incrementally disbursed to the provider when projects hit certain milestones.

The letter was signed by associations including Connect Humanity, the American Association for Public Broadband, the Internet Society, the SHLB Coalition, the Benton Institute, Public Knowledge,, and various state broadband offices.

The letter follows another in August, wherein a coalition of more than 50 internet providers addressed NTIA about the same concern.

Groups like the American Library Association, Consumer Reports and the SHLB Coalition have echoed these concerns in the past.

Viasat gets Space Force contract for its low earth orbit capacity

Satellite company Viasat on Wednesday signed an agreement with the U.S. Space Force to provide capacity from its low earth orbit satellites.

The proliferated LEO system allows for diversified orbits for multiple uses. LEO satellites fly closer to the earth to provide faster communications.

“Under this contract, Viasat plans to leverage small satellite technology, reduced costs and increased launch service competition, facilitating the ability for pLEO constellations to provide persistent, global coverage with reduced transmission latency,” the company said in a press release.

“The company will provide a suite of fully-managed pLEO satellite-based services and capabilities, to include space relay services, supplemented by GEO and NGSO satellites, supporting all domains – space, air, land, maritime and cyber,” it added.

The contract comes on the heels of Viasat satellite malfunctions. The ViaSat-3 Americas, a broadband satellite launched in April, experienced a malfunction on July 12th, which was said to impair the functionality of the satellite.

The government agency has entered into contracts with 16 other similar companies – namely  Hughes, which signed a five-year contract with Space Force in August. These $900 million contracts aim to improve space-based defense capabilities, by capitalizing on the advantages provided by these PLEOs’.

FCC announced $7 million in connectivity funding for schools

The Federal Communications Commission announced Wednesday that it will commit $7 million to the Emergency Connectivity Fund Program which provides digital learning tools and services to students nationwide.

This increase in funding will impact nearly 50,000 students in 110 schools and school districts. Schools can use this funding in ways they see fit, whether that be supporting students off-campus or hosting summer learning programs to make sure kids are keeping up with their education.

“Now that Labor Day has come and gone and schools are back in session, students everywhere need access to broadband connections and digital tools to succeed,” said FCC Chairwoman Jessica Rosenworcel.

The program was established in 2021 and has three application periods or ‘windows’ during which schools can apply for support. This funding in particular is being used to support applications that came through during the third application window this year.

This program is part of a much larger initiative aimed at giving kids access to the digital tools they need to keep up with their peers and in doing so closing what scholars refer to as the ‘Homework Gap’.

In addition to this funding Chairwoman Rosenworcel announced her plan to install broadband on school buses to enhance connectivity going forward.

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