The U.S. Department of Commerce and the National Telecommunications and Information Administration finally released a new notice of funding opportunity for the $42.5 billion federal BEAD program on June 6.
Impact: As expected, the program’s fiber preference has been eliminated in favor of a more technology-neutral approach, although in this case technology neutral seems to hint at a preference for satellite Internet. Telecompetitor reported that the updated rules also discard the existing three-tier scoring system focused on priority, reliability, and extremely high-cost technologies in favor of making any technology eligible as long as it meets the newly redefined “priority broadband project” definition. Participating providers must deliver speeds of at least 100/20 Mbps with a latency of no more than 100 ms and be able to increase speeds on their network over time to meet growing connectivity demands. The new rules don’t include a high-cost per location threshold, but that’s because BEAD-eligible states, territories, and the District of Columbia will be required to reject projects with what officials consider “excessive” costs. Most importantly, states must resubmit their existing final proposals within a 90-day window, at which point NTIA reportedly will take an additional 90 days to approve them. Within the new application window, states will need to conduct a minimum of one additional round of bidding to find the most feasible low-cost option.
Under the new scoring criteria, states must consider all applications within 15% of the lowest submitted bid and then judge those under a list of secondary criteria that includes speed to deployment as well as network speed and technical considerations. Though the states et al don’t have to go back and redo their challenge processes, they will have to revise their maps to weed out all unlicensed fixed wireless locations that previously weren’t eligible for BEAD funds because the new rules now allow for unlicensed FWA service. In another change, locations covered under other federal broadband programs can be considered for BEAD if their previously funded deployments did not occur as planned; this would apply to the numerous locations defaulted on under the Rural Digital Opportunity Fund, for instance. Existing criteria around “affordability, equitable workforce development and job quality, open access, or local and tribal coordination” have all been removed and NTIA funding approvals for non-deployment efforts also have been rescinded, sending multiple states back to the drawing board to redistribute all their funds for deployment.
In testimony before the Senate Appropriations Committee two days prior to the NOFO release, Commerce Secretary Howard Lutnick assured critics that new funding proposals would be approved and out the door by year-end if submitted within the 90-day application window provided they are technologically agnostic with the lowest possible per-location cost, though that timeframe seems highly unlikely now that the scope of the changes has been revealed. New Street policy analyst Blair Levin offered a less optimistic forecast for the revised BEAD timeline, predicting ahead of the release that any sort of rebidding process would run through late 2026. He said that kind of delay would hurt large wireline providers and benefit LEOs like Starlink (and Amazon’s Project Kuiper). Fierce Network reported that Levin now predicts that in areas where fixed wireless and satellite appear to have an edge over fiber, large providers will opt not to bid. He also wrote in a research note reported on by LightReading that forcing states to rebid and requiring them to award to the cheapest bidder “is a negative for all the companies that have been involved in bidding to date.” Expect legal challenges to the new rules from a variety of stakeholders who will be able to choose amongst several legal arguments to try to thwart the new rules.
