Nearing five months into the Trump administration, the National Telecommunications and Information Administration (NTIA) has released a Notice changing the requirements in the Notice of Funding Opportunity (NOFO) for the Broadband Equity, Access, and Deployment (BEAD) program. The BEAD program provides $42.45 billion in funding through the Infrastructure Investment and Jobs Act (IIJA), allocated to states, territories and the District of Columbia to expand broadband access across the United States. Even though the BEAD program was authorized in 2021, no American household has been connected yet as a result of BEAD funding. With this announcement, the Trump administration aims to expedite the rollout of BEAD funds.
To access BEAD funding, eligible entities must have an Initial Proposal approved by NTIA, conduct a challenge process, select service providers as subgrantees and have a Final Proposal approved by NTIA following the conclusion of public comment facilitated by the eligible entities. All 56 eligible entities have had their Initial Proposals approved by NTIA and concluded the State Challenge Process. Of those eligible entities that have had their Initial Proposals approved, 45 have begun selecting service providers, four have completed service provider selection and three have released their Final Proposal for public comment. As outlined below, all eligible entities will need to resubmit their applications to certify that their BEAD program plans meet the new NOFO requirements.
New Requirements
For eligible entities to receive approval of their Final Proposal and access their share of funding, they will need to comply with several new requirements, which are outlined below.
Technology Neutrality
Officials in the Trump administration have routinely criticized past preference for fiber technology used when determining eligibility for BEAD funding. As a result, the Notice greatly widens the scope of the type of technology used when carrying out broadband projects, eliminating the “Fiber Preference” section of the previous NOFO and permitting eligible entities to select from any qualifying technology. Specifically, eligible entities may apply to have their application treated as a Priority Broadband Project regardless of the technology used, as long as they still meet speed (100 MB down/20 MB up) and latency (100 ms) requirements. Furthermore, eligible entities are barred from excluding certain technologies and may only do so when not meeting the statutory definitions for projects. In addition, the requirement for eligible entities to establish an Extremely High Cost Per Location Threshold is eliminated.
Consistent with the updated requirements per the Notice, eligible entities must now conduct at least one additional subgrantee selection round for every BEAD-eligible location (“Benefit of the Bargain Round”). Subgrantee selections made after the release of the Notice must comply with its terms. Eligible entities are additionally required to rescind all preliminary and provisional subaward selections and notify applicants that a further round of applications will be considered. Eligible entities that have already completed subgrantee selection must conduct at least one additional round and are required to reopen prequalification processes. Subgrantee applications must also be rescored should they have been received prior to publication of the Notice.
The Notice announces a new set of scoring criteria that eligible entities must weigh for subgrant applications. The new scoring criteria includes: Minimal BEAD Program Outlay; Speed to Deployment; Speed of Network and Other Technical Capabilities; and Preliminary/Provisional Subgrantees.
Optimizing BEAD Locations
While NTIA is not requiring that eligible entities rerun their challenge process, the Notice outlines several measures related to BEAD-eligible location lists. The measures include requirements to review, update and verify information in the BEAD eligible location lists in accordance with the changes made in the Notice.
Non-Deployment Funding
NTIA is rescinding approval of all nondeployment activities as approved in Initial Proposals. NTIA is currently reviewing funding for allowable nondeployment purposes and will issue updated guidance in the future regarding nondeployment funding.
Permitting
NTIA has previously announced a goal of issuing National Environmental Policy Act (NEPA) approvals within two weeks for approximately 90% of BEAD projects and eliminating approximately three–six months of environmental processing per project. As a result, eligible entities will be required to use the Environmental Screening and Permitting Tracking Tool (ESAPTT) in the NTIA Grants Portal.
Modification of Initial and Final Proposals
Future Initial Proposals must comply with the Notice’s terms. Further, NTIA is rescinding all Final Proposal approvals (e.g., Louisiana, Delaware, Nevada), and Eligible Entities have 90 days to comply with the obligations outlined in the Notice and submit a Final Proposal that reflects the results of the new Benefit of the Bargain Round within 30 days. Eligible Entities are required to request an Initial Proposal correction from NTIA.
Unlicensed Fixed Wireless Service Requirements
The Notice permits the Unlicensed Fixed Wireless (ULFW) Service to participate in the application process should it meet technical criteria specified in the Notice.
Potential subgrantees and broadband stakeholders should monitor the NTIA’s future actions regarding the BEAD program. We will continue to monitor these developments and provide updates as the legislative process unfolds.
Eliminated Requirements
The Notice eliminates multiple proposal and reporting requirements that were included in the previous NOFO. In addition, eligible entities are required to remove any provisions related to the respective requirements from application scoring, subgrantee agreements and subgrantee reporting requirements. Going forward, eligible entities will be prohibited from imposing any obligations under the previous requirements on subgrantees. Among the requirements eliminated are those related to labor, employment and workforce development; climate change; consumer protections and open access; local coordination and stakeholder engagement; preferences for nontraditional broadband providers; middle-class affordability plan; and the low-cost service option.
Next Steps
With the new NOFO in effect, all eligible entities will have 90 days to comply with the new obligations and to submit an updated Final Proposal that reflects these changes. NTIA will complete its review of each Final Proposal within 90 days of submission. Under this timeline, BEAD funding could start to be awarded to states before the end of the year, but challenges from states like Louisiana or New Mexico could drag the process on further.
Further complicating matters is the recently released Senate Commerce Committee reconciliation draft, which includes language restricting states’ access to BEAD funds if they pass laws or policies that impede the development of artificial intelligence (AI). While this language could cause concern, we do not expect it to survive the Byrd Rule process, which prohibits non-budgetary provisions from being included in reconciliation bills.
THIS DOCUMENT IS INTENDED TO PROVIDE YOU WITH GENERAL INFORMATION REGARDING THE BEAD PROGRAM. THE CONTENTS OF THIS DOCUMENT ARE NOT INTENDED TO PROVIDE SPECIFIC LEGAL ADVICE. IF YOU HAVE ANY QUESTIONS ABOUT THE CONTENTS OF THIS DOCUMENT OR IF YOU NEED LEGAL ADVICE AS TO AN ISSUE, PLEASE CONTACT THE ATTORNEYS LISTED OR YOUR REGULAR BROWNSTEIN HYATT FARBER SCHRECK, LLP ATTORNEY. THIS COMMUNICATION MAY BE CONSIDERED ADVERTISING IN SOME JURISDICTIONS.