WASHINGTON, December 28, 2023 – The National Telecommunications and Information Administration on Thursday released a notice clarifying how it will apply the federal government’s grant management framework to its $42.5 billion broadband expansion program.
The NTIA sought comment on how to modify the framework, known as the Uniform Guidance, this summer after hearing from stakeholders that some provisions might harm participants in the Broadband Equity, Access and Deployment program, agency Deputy Chief Counsel Sean Conway said in a statement.
The agency said state broadband offices and internet providers repeatedly asked in those comments for Uniform Guidance adjustments that would bring BEAD in line with other federal broadband funding efforts managed by the Treasury Department. The Capital Projects Fund and Coronavirus State and Local Fiscal Recovery Fund are already being used in part to deploy broadband infrastructure, and aligning the program would make it easier for states to administer BEAD.
The policy notice makes four updates to BEAD guidance to do so. The changes apply to awards for infrastructure projects, defined as those in which more than 50 percent of the total project cost are necessitated by infrastructure deployment.
Program income
Broadband providers will be able to use income from BEAD-funded infrastructure “without restriction,” meaning they can keep subscriber revenue as profit. That, the policy notice says, is designed to “address a core problem for which the BEAD Program was created to solve, namely, the lack of a sustainable business case to expand and improve broadband services to unserved and underserved areas.”
Fixed amount awards
States and territories will be able to fund new infrastructure projects with fixed amount awards. That is generally not allowed in programs that require cost sharing or matching funds, which BEAD does, or for awards exceeding $250,000.
But the Uniform Guidance allows for fixed amount awards if projects have “measurable goals and objectives” and adequate data is available for a “reasonable estimate of actual cost,” the policy notice says. The NTIA reasons BEAD rules will result in grant applications meeting both of these requirements and is allowing fixed amount awards for the program regardless of the value of the award and without further approval from the agency.
The waiver is contingent on states and territories making an effort to monitor the reasonableness of project costs, the policy notice notes.
Permissionless upgrades
Broadband providers will be able to upgrade equipment in BEAD-funded networks without getting approval from the NTIA.
Ten-year Federal Interest period
BEAD-funded infrastructure will be subject to a ten-year Federal Interest period starting when a given project is completed, meaning equipment “acquired or improved” with BEAD funds will for that time be “held in trust for the beneficiaries of the BEAD Program,” according to the policy notice.
One key difference
The NTIA highlighted in its statement a notable difference between its Uniform Guidance policy and the Treasury Department’s: states and territories will still be required to structure their agreements with broadband providers as “subgrants” under BEAD.
If the agreements were structured as contracts, for example, a smaller set of Uniform Guidance provisions would apply, the agency said.
“Ultimately, this approach will further the goal of ensuring everyone in America has access to affordable, reliable, high-speed Internet service,” the NTIA said in its statement.
