BEAD’s Supplementary Funding Faces Complexity and Uncertain Timeline

Although broadband advocates generally support NTIA opening up a supplementary funding round to cover the remaining unserved BEAD locations, many are clearly concerned and curious about how this process will unfold.

Carol Mattey, former FCC official and founder of Mattey Consulting, stated in a conversation hosted by the Fiber Broadband Association, “Overall, NTIA recognizes that the situation is changing. ”She said it’s a ‘good thing’, but ‘there are some complex issues. Mattey shared her views with FBA CEO Gary Bolton on Wednesday’s (September 30th) Fiber for Breakfast program, outlining the path forward for this supplementary funding round targeting the $42 billion BEAD program (of which approximately $21 billion is still available). She also discussed some unresolved issues.

Timeline

According to Mattey’s explanation, NTIA has provided specific timelines for each stage of the supplementary funding round for each state. This includes an initial 30 day list of available unserved locations provided by NTIA for states to verify, followed by a revised list published one week for challenge procedures (providers can claim they have served locations deemed eligible for funding), a 30 day challenge window, and another 30 days for states to decide on challenges.

At this point, each state submits its final location to NTIA for approval, in order to obtain funding limits and begin a 90 day supplementary bidding round. But the timelines of each state are clear, while the timeline of NTIA is not so clear.

Mattey said, “In reality, this process may take nine months. States must comply with certain mandatory deadlines, but it is still unclear how long they will take between each step when the ball returns to the NTIA – whether it is approving the final list, deciding how much funding to allocate to each state, or when the final supplemental proposal returns to the NTIA. As we have known in the past, NTIA announcing its own deadlines does not necessarily mean that these deadlines will be fulfilled.”

Non deployment funding guidance

Speaking of which, one of the problematic deadlines is the release of guidance by NTIA on how states can use “non deployment” funds – the BEAD funds remaining after granting deployment grants. NTIA was originally supposed to release the guidance in March, but later postponed it to “this summer”.

But in the now concluded summer, the only such guidance issued is to stipulate that the remaining BEAD funds will be used for deployment. Mattey hopes to see non deployment funds used to increase broadband adoption, and she suspects that supplementary funding guidance may be all that is currently available.

She said, “I think in their view, issuing a supplementary deployment announcement fulfilled their promise to do something before the end of the summer. I wouldn’t be surprised if they didn’t release any additional guidance until this round of supplementary funding is over.”

Cost constraints and satellite pressure

In addition to the uncertain timeline ahead, Mattey also raises questions about the impact of the NTIA supplementary funding round cost model. The model will allocate funds to each state based on the average cost of broadband serviced locations approved in the final BEAD proposal, multiplied by the number of unserved locations.

But in this case, the average cost of each BSL will be taken from the pool of winning bidders for fiber optic, fixed wireless, and satellite in each state, which may pose a problem for ground providers – both due to cost differences between technologies and because supply costs have only increased or decreased since the final proposal was submitted.

Mattey said, “Now, we all know that satellite providers have much lower price points. Therefore, averaging all of these together will lower the state average for this round of supplementary funding, and we all know that the remaining locations may be the most difficult to serve. Therefore, whether this upper limit will constitute a constraint is one of the issues we must address.”

This potential cost constraint, as well as NTIA’s restriction of this round to unserved locations rather than underserved locations, may further benefit satellite providers.

Mattey said, “We won’t see logical project areas. We’ll see random locations here and there, and in fact, ground providers may not be interested because they are scattered and far apart. So, my inner skeptics want to know if this round of supplementary funding will ultimately only drive more funds towards satellites. But we’ll wait and see.”