NTIA Drops Weiss Ratings for Letters of Credit
Agency will now approve LOCs from 'well capitalized' banks, or NCUA insured credit unions
WASHINGTON, August 14, 2025 – The National Telecommunications and Information Administration has eased requirements for participants in a major federal broadband program to obtain a letter of credit.
The NTIA will no longer require internet service providers participating in the Broadband Equity, Access, and Deployment program to obtain a standby LOC from a financial institution with a Weiss rating of B minus or better.
Instead, the agency will now accept LOCs from banks that are “well capitalized” or from credit unions insured by the National Credit Union Administration. ISPs may also obtain a standby LOC from banks rated BBB- or higher by a Nationally Recognized Statistical Rating Organization (NRSRO) recognized by the Securities and Exchange Commission.
Announced in July and set to take effect on August 24, the change is intended to make it easier for ISPs to secure LOCs. The Wireless Internet Service Providers Association (WISPA) hailed the shift as a “win for small ISPs.”
“This will benefit WISPA members that participate in BEAD because there are more banks that meet the ‘well-capitalized’ standard than the Weiss bank safety rating standard it replaces, and it will likely be less volatile over time,” the organization said.
Under BEAD rules, ISPs receiving program funds must obtain a standby LOC covering 25 percent of their award. Eligibility rules for issuing LOCs have been contentious, with small ISPs warning that strict standards could block their access to funding. In November 2023, the NTIA said it would allow other financial instruments, such as performance bonds, to be used in place of a LOC.
In December, the Federal Communications Commission ruled it would no longer use Weiss ratings to determine bank eligibility. Instead, it adopted the “well-capitalized” standard as defined by the Federal Deposit Insurance Corporation, the Federal Reserve, or the Office of the Comptroller of the Currency. The change followed a sharp decline in qualifying banks—nearly half of the 3,600 banks with a B minus or better rating in 2022 had fallen below that level by June 2024—forcing many ISPs to scramble for new LOC providers.
Although the BEAD program automatically adopted the FCC’s new standard, the NTIA’s July announcement formally codified it and added the new provisions easing restrictions for credit unions and NRSRO-rated banks with a BBB- or higher rating.
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