This is the first of several planned blogs on the recently released NTIA BEAD Restructuring Policy Notice (“Notice”).

In early March, Department of Commerce Secretary Howard Lutnick paused all funding under the $42.5 billion BEAD program pending a “rigorous review” by the new administration. At that time, the Secretary announced his intention to “rip out” many of the Biden Administration’s requirements and “revamp” the BEAD program to take a “tech-neutral approach.”

Now, three months later, true to his word, Secretary Lutnick has released NTIA’s Restructuring Notice, revamping the underlying structure of the prior program toward a new “tech-neutral” approach that gives primacy to low-cost solutions rather than long-term value or infrastructure investment. It is widely anticipated that the restructured program will, in many instances, favor low-earth orbit (“LEO”) satellite as the lowest-cost solution. The Notice also removes several Biden-era grant compliance requirements.

The Notice requires all states and territories to rescind preliminary awards (including those in states already approved under the Biden administration, including Delaware, Louisiana, and Nevada) and conduct a new selection round prioritizing sub-recipients who submit lowest-cost bids in accordance with the NTIA’s new “Benefit of the Bargain” scoring rubric. States and territories will have 90 days to complete this process and submit a Final Proposal that reflects the results of the “Benefit of the Bargain” round. The Notice states that NTIA will complete its review of each Final Proposal within 90 days of submission. According to Secretary Lutnick, the “goal” is to get BEAD funding flowing by the end of the year.

Benefit of the Bargain Round Scoring

The Notice redefines the definition of a “Priority Broadband Project” to remove NTIA’s prior preference for end-to-end fiber solutions. It will now include any technology, including LEO and unlicensed fixed wireless broadband (“ULFW”), that meets the minimum speed and latency requirements – 100 Mbps down and 20 Mbps up; 100ms latency; and scalability. In other words, all broadband projects are now “Priority Broadband Projects,” except those that cannot meet the speed and latency requirement or satisfy the vague scalability standards outlined in the Notice.

The Notice adopts new scoring criteria that heavily prioritizes proposals with the lowest overall cost to the program. This may enable selection of a proposal that is not necessarily the lowest-cost option for an individual broadband service location but is part of the combination of selected locations with the lowest overall cost to the program. When comparing competing proposals, the Notice directs states and territories to assess the total BEAD funding that will be required to complete the project (i.e., the total project cost minus the applicant’s proposed match) and the cost to the program per location (i.e., the total BEAD funding that will be required to complete the project divided by the number of locations the project will serve).

If competing applications to serve the same general project area propose a project cost within 15% of the lowest-cost proposal, the state or territory must evaluate such competing applications based on: (1) speed to deployment; (2) speed of network and performance capabilities; and (3) whether the entities were previously provisionally selected by the state or territory in an earlier selection round.

Challenge Process

The Notice does not explicitly require states and territories to re-run their location eligibility challenge process. States and territories are, however, required to implement the following measures:

• Investigate and account for locations that are not eligible for BEAD funding because: (1) the locations are shown as served under the latest version of the FCC Broadband Data Collection map; (2) the locations will be served by an enforceable commitment; and (3) the locations are already served by a privately funded network.
• Modify BEAD-eligible location lists to include locations no longer served due to a default or change in service area on a federal enforceable commitment.
• Investigate and modify BEAD-eligible location lists that are found to be served by ULFW.

NTIA’s downplaying of the challenge process notwithstanding, the overlay of existing ULFW service, coupled with ongoing fiber deployment that has occurred over the past 18 months or so (and continues), strongly suggests that maps and data relied upon by the states and territories to create their lists of eligible locations do not reflect the current reality, let alone the reality that will exist at the time the BEAD funding is actually awarded. A significant “true-up” would seemingly be needed to reconcile the data.

Elimination of Prior Compliance Requirements

The Notice eliminates several non-statutory compliance requirements instituted by the Biden-era NTIA, including those relating to:

• Labor and workforce development
• Climate change
• Open access/network neutrality
• Local coordination and stakeholder engagement
• Preference for non-traditional providers
• Regulation of low-cost plans

While the Notice eliminates these requirements, applicants are still subject to applicable federal laws related to all the above but may demonstrate its compliance through a certification.

Similarly, while subrecipients still must offer at least one low-cost broadband service option (a requirement under the BEAD statute), the Notice removes NTIA’s previous requirement that states and territories define the parameters of such plans.

Up next in the BEAD Notice series. “Playing Defense Under the New BEAD.”