5. BEAD Article - Another Twist in The BEAD Grant Process_ _ POTs and PANs
June 26, 2023
Another Twist in The BEAD Grant Process?
3 Comments
Word has been circulating that the NTIA recently
informed State Broadband Offices that they must submit a final BEAD plan to the NTIA one year after
receiving approval of the Initial Proposal of grant rules. That’s not a surprise since this language is
straight out of the legislation, and the NOFO for BEAD – An Eligible Entity may initiate its competitive
subgrantee selection process upon approval of its Initial Proposal and will have up to one year to conduct
additional local coordination, complete the selection process, and submit a Final Proposal to NTIA.
The ugly twist is that the NTIA is expecting the Final Proposal to include a final list of all BEAD grant
winners. Everybody has always assumed that the Final Proposal would be just that – a proposal that
describes and fine-tunes the rules being used to award grants. Most State Grant Offices have assumed
that they would have multiple years to pick BEAD grant winners.
Consider what has to happen once a state gets approval of its Initial Proposal:
A State Broadband Office must finalize the rules for awarding grants through attorneys and
state leadership. Some states are going to be required to get the Legislature involved to
approve grant rules. This will likely take 3-4 months for most states, but a few will take much
longer.
The Grant Office would then be ready to announce the date for the first round of grant
applications. They would typically give applicants 60-90 days to submit grant applications.
A Grant Office will need at least 30 days for the initial review of applications and to provide
time to ask for clarifications from applicants.
Next, the detailed grant scoring must be done. The BEAD grants are complex, and it’s hard to
see a state scoring and ranking grant applications in less than 60 days. There is a lot of
complicated due diligence needed by grant offices that are often manned by first-time grant
reviewers.
The State is then going to have to allow 15-30 days to post the grant applications and allow
for protests and challenges. There would be another 30-60 days to resolve protests.
Finally, grant awards are announced, and it can easily take three months to negotiate
contracts with grant winners. Inevitably, some winners will back out during this process.
The timeline above totals 16 months – and that’s if everything goes smoothly. The BEAD grants are
complex, and reviewing and resolving grants that ask to serve overlapping areas is going to add a lot of
complication to the process. To put this timeline into perspective, my state of North Carolina is 18
months into the $350 million ARPA grant process and still has not finished identifying all of the grant
winners. And that’s with a capable and experienced Grant Office – some states are new to the grant
process. The BEAD grants are for more dollars, are more complicated, and will take more time to review
than ARPA grants.
The above timeline doesn’t reflect the added rules that are specific to BEAD. State Broadband offices
have a mandate to bring broadband to every unserved location. They also must contend with special
handling of high-cost areas. Both of these processes will require a lot more time than listed above for
Broadband Offices to reach out to and negotiate with ISPs. States that are lucky enough to fund all
unserved and underserved areas will need more time to figure out what comes next.
I’m fairly certain that any pressure to speed up the grant time frame comes from the recent White House
emphasis on getting infrastructure money out the door quickly. I think everybody in the industry thinks
that the BEAD grant process should have gone faster. But the BEAD process has been glacially slow and
it’s been 19 months since the IIJA legislation was signed. It’s absurd that we are just now announcing the
amount of money that states will get.
But we can’t make up for the glacial process of launching the BEAD grants by rushing at the end so that
the money is shoved out the door without taking time to make sure that each State is getting the best
long-term solution. States have been having a lot of internal debates about the technologies and types of
ISPs they hope will win funding – any deliberation and chance of directing the funds responsibly will be
cut short if the process is hurried. One of the most important parts of any grant process is to give worthy
applicants a chance to refine and amend a grant request in a subsequent round. The BEAD grants are the
first grants in my memory where the States had to reach out to stakeholders to get public feedback. If we
rush, all that was learned in that process will be tossed aside.
If the NTIA really insists on a speedy timeline, it will be creating an RDOF-type disaster. The only way to
get this process done in a year (or even 18 months) would be through a single round of grants – done
hastily. With a tight time frame, the grants won’t be reviewed closely and grants that include errors will
be pushed through. ISPs that aren’t really qualified will sneak through.
Having only one round of grants will feel a lot like the RDOF reverse auction. A giant pile of grants will
be shoved into the funnel, and it’s likely that the grants will go to ISPs that ask for the lowest percentage
of grant funding. A friend of mine has jokingly been saying that 95% of BEAD money will go to the large
incumbent providers, and if there is a single-round grant process, he might not be far from the truth.
I’m hoping that this is just a trial balloon being circulated by the NTIA to get feedback, and if so, every
State Broadband Office needs to push back hard. If the grants are going to be hurried, we’re going to end
up with yet another disastrous federal grant program. I was hopeful that BEAD would avoid the
mistakes of the past since the money was given to the States. But if the NTIA forces State Broadband
Offices to rush the grant process, we’ll be watching a slow-motion train wreck over the next year.
3 thoughts on “Another Twist in The BEAD Grant
Process?”
1. Trendal R Toews
June 26, 2023 at 9:37 am
Ugh… This is starting to feel like it’s going off the rails.
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2. Mike Dunne
June 26, 2023 at 9:57 am
Your friend is spot on. If BEAD becomes a short notice, single-cycle grant, the large ISPs will win. One,
because they have the staff to push applications to the states within a tight timeframe and two,
because when states are pressured to make decisions without assessing all factors, they will (mostly)
default to incumbent ISPs (better the devil you know, etc.).
I hope this is not how it plays out but if it is, all the gushy talk about BEAD resolving the digital divide
will go out the window and we’ll end up seeing billions go to large ISPs with poor oversight (again).
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3. Eric Wagner
July 10, 2023 at 12:07 pm
That would be unfortunate.
From NTIA’s guidance on their website.
“NTIA will award the remaining funds allocated to the Eligible Entity upon approval of the Eligible
Entity’s Final Proposal, and Eligible Entities will initiate their subgrants for the remaining 80 percent
of funding and any portion of the original 20 percent that the Eligible Entity has not yet awarded as a
subgrant. Prior to submission to NTIA the Final Proposal must be made available for public
comment.”
You read this as NTIA expecting the Final Proposal to include the subgrantees?
“Eligible Entities will initiate their subgrants for the remaining 80 percent of funding”?
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