The Final Countdown

Why the subgrant process is not the end step in BEAD

Much has been written, beginning with Assistant Secretary of U.S. Department of Commerce Davidson’s statement to a U.S. House of Representatives subcommittee in March, about 2024 being the “year of execution” for BEAD. This has led many to believe that 2024 will see BEAD dollars put to work to connect homes that lack #broadband access.?

This is not the case.?

Define: Execution?

What is meant by “execution” varies according to which pundit you ask. Is it Initial Proposal (IP) Volume 2 approval? Commerce Secretary Raimondo testified last month that she is aiming for National Telecommunications and Information Administration (NTIA) approval of every state and territory’s IP by fall. Approval unlocks the ability for states to move forward with a competitive application/subgrant process to allocate BEAD funding to eligible applicants for coverage of qualifying BSLs. Twelve states currently have full IP approval. (Kentucky and Maine are not yet shown on the dashboard, but were approved today).

Does “execution” mean completion of the subgrant process? At least four states are slated to begin the application for BEAD funding this summer: Delaware, Kansas, Louisiana, and West Virginia. Several others will initiate the process this fall. However, most states will not even initiate the subgrant process until 2025, let alone finish it.

?I would argue that the average layperson who is languishing in the #digitaldivide interprets “execution” to mean access to a high speed, reliable broadband connection in their home.?

The BEAD end goal remains #internetforall: Grant funding awarded to applicants → $$ flowing into communities → shovels in the ground → equipment installation in disconnected households and CAIs → adoption of internet service

BEAD is a complex, multiyear, multiphase program. Attaining IP approval and running subgrant processes are both exciting milestones--they get us closer to universal connectivity. But we aren’t there yet.

Final Proposal

The Final Proposal is the oft-forgotten step(child) in the BEAD program. Once a state completes the subgrant process, they are required to submit their slate of proposed awards to NTIA for approval before BEAD funding is released to the state. This document is known as the Final Proposal (FP). States must submit the FP no less than 12 months after the Assistant Secretary approves their IP.?

Having lived through the arduous approval process of the IP, many will shudder upon learning about another bureaucratic hurdle to bound before grants are actually awarded. BEAD director Evan Feinman assuaged those fears earlier this month in an address to state broadband office leaders in Kansas. He assured attendees at the event that the FP approval process will not mirror the IP approval process. While IPs were meant to be detailed, holistic design plans of universal coverage and adherence to the regulatory provisions of the NOFO, FPs are simply a description of how each state followed their plans to arrive at their recommendations.?

Ok, so IP approval → subgrant process → FP submission →then what??

That’s an excellent question! There is a running joke between NTIA and state broadband offices called: “Guidance is forthcoming.” No one knows what the FP approval process looks like because it hasn’t yet been designed and released. Although the process may not be as extensive, FPs are still formal federal documents that will require review and signoff by NIST.?

There is also the question of whether states that fall short of universal service goals during the subgrant process will receive approval. NTIA originally stated that FPs that fail to cover all unserved and underserved BSLs will not be approved. They have since softened this stance considerably, but it remains a concern for states with a funding shortfall.

Do you remember those old cartoons where the train tracks are being laid while the train is barreling down them?

That’s kind of where we’re at with BEAD. We are laying the track as we go. That’s not necessarily a bad thing!

We have never done this before as a country.

It is unreasonable to take a few lines of a 2,700 page law that authorizes BEAD and expect NTIA to produce a soup to nuts program all at once. While applicants are scrambling to procure resources, secure funding, design networks, and states are scrambling to staff up, operationalize offices, design programs, NTIA is also scrambling to implement a historic program to solve a pernicious problem. We are all in the process of co-creation together toward a shared goal. We will have to stay tuned on how the FP approval process unfolds.?

Which brings me to an important point. Nobody knows BEAD better than the state broadband offices (SBOs). They are in constant communication with their NTIA Federal Program Officer to remain up-to-date on the latest developments. Reading the law is helpful, but insufficient. Understanding the NOFO is helpful, but insufficient. New guidance, waivers, technical assistance, and other pertinent information that pertains to BEAD is released regularly by NTIA and state broadband offices. If you want to position your company/community for this investment opportunity, you need to stay engaged with your SBO.?

Show Me the Money

Where does that leave us with BEAD “execution” as understood by the consumer? Let’s take a look at a best-case-scenario timeline.

Our friends in the Bayou state received IPV2 approval Dec. 15, 2023. They must run their subgrant process and submit their FP to NTIA before 12/15/24. Does that mean shovels in the ground Q1 2025?

Not so fast.?

Not only is there an unknown surrounding FP approval time (weeks? months?), but there are other variables with which to contend. Most notably is the contract negotiation process with proposed awardees. This can add months. If all goes well, the best case scenario for translating BEAD dollars to actual homes connected is Q1 2025. But it’s looking like Q2 2025 is a more reasonable expectation.?

Every state has a different strategy and timeline for BEAD. Remember, states are juggling multiple broadband programs (Kansas has close to 10). They are grappling with how best to leverage BEAD alongside other funding pools to meet universal service goals. Those that wish to delay IPV2 approval until fall 2024 will not submit FPs until late 2025. This means BEAD money won’t be put to use in some states until 2026. With a four year period of performance, households may not be connected with BEAD funds until 2030.?

Need for Speed

The need is urgent, but the solution is unhurried. These are, after all, infrastructure projects. Notwithstanding the reams of paperwork involved in unleashing these funds, there remains deployment timelines and the associated barriers construction brings (permitting, siting, etc.) until disconnected communities experience relief with the BEAD?investment. Much can, and SHOULD be done concurrently with the subgrant process to address these obstacles.?

So while 2024 is the year of BEAD execution, it is not the year for connecting homes with BEAD.