The National Telecommunications and Information Administration (NTIA) recently announced it has created a “programmatic waiver” that offers alternatives to the much-criticized letter-of-credit (LOC) requirement buried in the BEAD program.

The announcement comes after hearing from a coalition of public interest groups and a chorus of broadband experts that the LOC requirement would effectively shut out smaller ISPs from participating in the national effort to expand high-speed Internet access.

When the bipartisan infrastructure law was passed in 2021, establishing the $42.5 billion BEAD program, the NTIA issued a Notice of Funding Opportunity (NOFO) that detailed the spending rules for BEAD grants. Designed to ensure Internet service providers (ISPs) did not take federal grant dollars and leave a project incomplete, the LOC requires BEAD grant applicants to provide a letter-of-credit from a bank that verifies the applicant has at least 25% of the grant dollar amount in cash reserves held in a bank account for the entire time it takes to complete a network build.

A new chapter in state-Tribal relations is being written as the importance of robust and reliable telecommunication becomes all-too-apparent, especially in the face of more frequent extreme weather events. For the first time, a Tribe in California is building high-speed Internet infrastructure in collaboration with the state, thanks to the resilience of the Hoopa Valley people.

Tucked along the Trinity River in the northwestern corner of the state, the Hoopa Valley Reservation is located in a rural and heavily wooded region that spans over 89,000 acres, home to over 2,500 Tribal citizens. Last summer, the area was ravaged by closely-timed wildfires and thunderstorms, followed by massive landslides that collapsed into the region’s riverways, including the Trinity River, a sacred body of water for the Hoopa Tribe.

As the river turned to mud and dead fish began to wash up on its banks, alarmed residents had limited means of connecting with one another, getting timely information about what was going on, or contacting emergency services. That was because of a hidden casualty of the wild weather: the Tribe’s wireless Internet network, which sustained severe damage that not only hindered communication but also extended the time it took to assess the damage.

In another set of awards to connect communities in Indian Country to high-quality, reliable, and affordable broadband, the National Telecommunications and Information Administration (NTIA) released over $74 million to help fund Tribal Broadband projects across the country.

The Tribal Broadband Connectivity Program (TBCP), part of the Biden administration’s Consolidated Appropriations Act passed in the spring of 2021 and administered by NTIA, allocated nearly $1 billion in the first round of funding to support connectivity access and adoption initiatives in Tribal communities; namely, “broadband deployment on tribal lands, telehealth, distance learning, broadband affordability, and digital inclusion.” And while that may seem like a sizable investment, over 280 applications totaling more than $5 billion in funding requests were received before the first 90-day application window closed in September 2021, a reflection of the even larger need Tribal Nations have than what the federal program offers.

In November of 2021, the Infrastructure Investment and Jobs Act (IIJA) funneled another $2 billion into the program and extended the timeline for broadband deployment, turning the program into more than just a short-term pandemic response. Since then, NTIA has been announcing awards on a rolling basis with the program having distributed over $1.7 billion to 198 Tribal entities so far. The funding covers investment in new infrastructure, as well as upgrades and network planning.

As the National Telecommunications and Information Administration (NTIA) continues to move forward in administering the single biggest federal investment to expand high-speed Internet access in U.S. history, each state and U.S. territory is wrestling with how to best spend the windfall as they lay out their Five Year Action Plans and Initial Proposals necessary to claim their portion of the $42.5 billion BEAD program.

One major barrier to providing universal access to fast, reliable and affordable Internet service–long recognized by ILSR, telecom experts, and a growing number of ordinary citizens–are the monopoly-friendly preemption laws that either outright ban or erect insurmountable barriers to building publicly-owned, locally-controlled broadband networks, aka municipal broadband.

Preemption in the BEAD Era

Currently, 17 states have such preemption laws, most of which have filed their Five Year Action Plans and/or their Initial Proposals. In each of those states, at the behest of Big Cable and Telecom incumbents, state lawmakers have erected legislative barriers to municipal broadband to protect the monopoly players from competition, which is at the very heart of why the digital divide exists in the first place and why tens of millions of Americans suffer from the slower speeds and higher costs that go hand in hand with monopoly service.

A massive coalition of more than 300 broadband policy experts and organizations have written a letter to the U.S. government, warning that smaller broadband providers, nonprofits, and municipalities will be elbowed out of an historic $42.45 billion broadband grant program without some notable changes to program rules.

At the heart of their concerns sits the Broadband Equity Access and Deployment (BEAD) program, made possible by the recently passed infrastructure bill, and administered by the National Telecommunications and Information Administration (NTIA). The grant program is a once-in-a-lifetime opportunity to put a significant dent in America’s longstanding digital divide.

But BEAD program rules currently require grant recipients to obtain a letter of credit (LOC) from a bank, collateralized by cash or cash-equivalent. They also require grant winners to provide "matching funds of not less than 25 percent of project costs," though the latter restriction can be waived in some high deployment cost areas.

While the restrictions were intended to reduce the risk of project failure (a touchy subject for the government in the wake of problems with the FCC’s RDOF program), they require grant recipients to lock away vast and untouchable sums of capital for the duration of any broadband build, most of which last several years.

The key for states to unlock their portion of the $42.5 billion in federal BEAD funds is the submission and approval of their Five Year Action Plans and Final Proposal. The infrastructure law requires states to first file an action plan, and then prepare more detailed Initial Proposals, allowing residents and stakeholders to submit public comments.

So far, 14 states have filed their Five Year Action Plans with the National Telecommunications and Information Administration (NTIA), the Treasury Department agency in charge of allocating the funds to each state and U.S. territory. According to the NTIA’s website, Maine, Louisiana, Delaware, Georgia, Hawaii, Idaho, Kansas, Montana, North Carolina, Ohio, Oregon, Pennsylvania, Utah, and Vermont have all filed their draft Five Year Action Plans.

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The states that are now in the process of completing their Initial Proposals include: Delaware, Kansas, Louisiana, Montana, Ohio, Tennessee, Vermont, Virginia and Wyoming.

Today, we will look at two states (Maine and Louisiana) and follow up with the others as we are getting a clearer picture of how each state intends to put this historic infusion of federal funds to use.

Maine

Data unsurprisingly ranks remote Alaska dead last when it comes to the availability of affordable broadband. That’s particularly true in areas like Bristol Bay, an area the FCC’s updated broadband maps suggests lacks access almost entirely. But as with most underserved regions, local cooperatives are at the forefront of efforts to finally address the problem.

Launched in 1975, the member-owned Nushagak Electric & Telephone Cooperative, based in Dillingham, Alaska, offers locals broadband access through microwave towers; often the only way to provide service across Alaska’s rugged landscape. But the co-op, which also offers a electric, telephone, and cable TV service, says it’s on the cusp of new fiber deployments that should finally bring next-generation speeds to a chunk of the co-op’s members.

The co-op has been working since 2021 on a $22.4 million plan to expand more reliable fiber to the region. The project is partially funded by the USDA ReConnect program as well as $6.5 million in term loan money from the National Rural Utilities Cooperative Finance Corporation. The cooperative will also use $784,000 of its own money to get the project underway.