3 areas in Initial Proposal Vol. 2 drafts that will impact the ability for small ISPs to participate in BEAD
As more states release Volume 2 of their Broadband Equity, Access, and Deployment (BEAD) Initial Proposals and solicit feedback from the public, it is important to understand the rules that are either enabling or discouraging participation from small ISPs, nonprofits, cooperatives, and municipal networks.
In the BEAD Notice of Funding Opportunity, there are clear rules that favor larger ISPs (cost efficiency and speed to deployment). However, at the state level there are ways to balance the playing field for all applicants to increase the competitiveness of the grant process. Here are three questions to ask as you review state Volume 2 drafts.
- How transparent and strategic is the project area definition process?
States have flexibility to define the project areas for which subgrantees can apply. Some states like Louisiana are creating their own project areas, and others are using previously defined boundaries such as Unified School Districts (Kansas) or Communications Union Districts (Vermont). Some states are allowing an area as small as a single census block to serve as a project area (Wyoming).
There are strategic reasons to use very small project areas (like census blocks) or bigger areas (school districts).
Small boundaries allow internet service providers (ISPs) to be more strategic with applications, which may keep costs down and may allow smaller ISPs and cooperatives to participate. For example, electric cooperatives building inside their existing footprint may not overlap with bigger project area boundaries (i.e., counties or multi-town areas) — so they may not be able to apply for an entire project area.
On the other hand, the smaller the project area, the more this potentially allows cherry-picking of the best areas, so using bigger project area designations can be a way to hedge against this practice.
The unintended consequences of project area definition size could be mitigated by other rules throughout the subgrantee process in Volume 2, like allowing for a consortium of ISPs to apply to one large area or combining smaller areas into one (Oregon). Look out for strategies like this that ensure project area size attracts a variety of ISPs and rural areas do not get left behind.
2. Does the scoring rubric require ISPs to prove community support?
In the grant rubric, states must include primary and secondary criteria. Primary criteria make up 75% of the points and encompass BEAD outlay (cost-effectiveness of the project), fair labor practices, and affordability. The secondary criteria section must include speed to deployment, but states can add other requirements like community input, equitable workforce-development practices, or the speed of the proposed network.
Secondary criteria — making up the remaining 25% of the rubric — allow states to add metrics important to communities in their state. For example, Alabama awards points to proposals that show community/Tribal/government support and low-cost residential service. In Mississippi, the broadband office allocates the entire 25% to speed to deployment, meaning that subgrantees are not required to solicit community support.
While secondary criteria points are not as heavily weighted as primary criteria, adding community or government support ensures that BEAD applicants engage with communities they plan to serve. This is the last point of leverage the community has in the BEAD process. Applicants can lose up to 10% of points (in some states) on the application without letters of support from community members or local government. Losing this 10% could make the difference between two competitive applications in an area — giving the community a strong say in who serves them for the next 10+ years.
3. Do states support financial flexibility to increase small, cooperative, nonprofit, or municipal ISP participation in BEAD?
Given the new National Telecommunications and Information Administration rules, states now have more flexibility around letter of credit requirements. Allowing subgrantees flexibility regarding the letter of credit has the potential to increase the participation of smaller ISPs and cooperatives that cannot provide collateral or capital for large broadband grants. While some experts rightfully rightfully note that the new letter of credit rules may not help smaller ISPs a significant amount, providing alternatives to the standard Letter of Credit requirements may convince a small percentage of otherwise ineligible ISPs to apply, providing a modest win for those who have been fighting for alternatives for the past year. However, it is up to individual states whether or not they will include the new NTIA alternatives to the letter of credit requirement. Look out for whether or not your state allows alternatives, as most are asking for public comment regarding the changes to NTIA rules.
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If you are looking for more tips and tricks, or if you want to know how to engage with your state’s public comment process, please reach out to the National Broadband Resource Hub.
