Part 1 – Why the Next Few Months Are Critical
“I am not throwin’ away my shot!” This line, from the musical Hamilton keeps playing in my head as I think about our “once in a generation” opportunity to finally provide everyone in our state high speed internet – broadband.
This is the first of several blogs designed to alert and call on Public Organizations to help make universal access to broadband a reality. This is particularly true now, as $1.7 billion of federal government funding is about to become available through the Broadband Equity Access and Deployment Act (BEAD) program.
“Public Organizations” include local government, such as county commissions, city councils and boards of aldermen, and school district boards; as well as their partners, chambers of commerce; regional economic development planning commissions and regional councils of government; and civic nonprofits, such as Rotary and Lions Clubs.
While most of the money for broadband infrastructure will be directed to private for-profit internet service providers (ISPs), Local Public Organizations can help ISPs create economically sustainable infrastructure and help communities use this new asset to improve the health, education and economic opportunity, for all residents.
Why Now? Haven’t We Closed the Digital Divide?
As the COVID pandemic set in during 2020, skepticism over whether there was a need for broadband quickly gave way to an understanding that, like electricity and running water, a stable high-speed internet connection provided an essential “utility” for businesses and families. This led to a dramatic increase in promised state and federal government funding for broadband infrastructure. While some of that government funding has been awarded to ISPs much, much more is only now becoming available.
In late 2021, Congress passed the bipartization “Infrastructure Investment and Jobs Act” (IIJA). That Act authorized over $60 billion of federal funding for broadband access, adoption, and affordability programs. $42.5 billions of that amount is dedicated to broadband access through the Broadband Equity Access and Deployment Act (BEAD) grant program. These laws (and others) have been summarized in several blogs already [here], [here] and [here] When combined with continued support provided by the Federal Communications Commission’s (FCC) RDOF Program and the USDA’s Reconnect Program, the federal government’s promised investment in broadband over the next decade totals more than $100 billion!
So, “problem solved!” you might think, and certainly this federal funding could go a long way toward providing reliable broadband access to all unserved and underserved locations in Missouri and across the United States. Yet, there is still much more to be done. For example, the nearly $200 million awarded by the State of Missouri during the fiscal year ending June 2023, will provide access to only 8% of Missouri locations that need service.
The largest single federal program enacted in 2021 — BEAD — promises Missouri $1.7 billion of grants to provide reliable and affordable broadband service to every unserved location, and potentially every underserved location in Missouri. However after more than two years, only a small fraction of BEAD funding has been distributed to states.
Although slow, progress, is being made. At the end of last year Missouri’s Office of Broadband Development (OBD) submitted its “Initial Proposal” to the National Telecommunication and Information Agency (NTIA) for approval. The Initial Proposal includes OBD’s processes for identifying projects and distributing BEAD funds. OBD hopes to receive approval of the Initial Proposal by February 18th. Assuming this happens, OBD expects to begin accepting requests for grants this summer and possibly award the first grants this fall.
The timeline depends on NTIA’s approval of the Initial Proposal, and certainly, that timing could “slip.” It is also possible that NTIA may modify some of the details of the Missouri proposal, but the fact remains that after years of waiting, the next few weeks and months likely will determine what locations will receive a share of the BEAD money, and what broadband infrastructure technology will be built over the next five years.
In other words, for communities across the state that lack adequate broadband access, now is the time to become engaged in efforts to finally bridge the digital divide.
What to Expect
The state’s Initial Proposal calls for action to commence immediately following NTIA approval. This will involve two preliminary steps – (1) finalize the locations eligible for BEAD funding and (2) prequalify ISPs that will be eligible to participate in the BEAD proposal and funding process. Following the first two steps, OBD will begin accepting specific proposals for the first of at least two funding rounds. Proposals for round one will ideally be accepted between June 1 – July 31, 2024, with the first awards made by October 2024.
The first round of funding will be designed to favor proposals that connect locations using the fastest and most robust broadband infrastructure — fiber optic cable to the premises (FTTP). The second round of funding will target locations not funded in the first round because they are harder to reach and less economically viable. Other forms of reliable infrastructure, such as cable and wireless connections, likely will be used more for this round of funding. Both funding rounds will be numerically scored, and in each case the amount of BEAD grant funds requested will be a very important, but certainly not the only, factor in determining whether a proposal will be funded.
Identify BEAD Eligible Locations
When NTIA approves the Initial Proposal, OBD will publish its proposed set of eligible BEAD funding locations. Generally funding is available for unserved and underserved locations, determined by the download and upload data speeds, with minimum requirements for latency (the time it takes for a signal to be transmitted and received). This eliminates satellite internet providers. In addition, locations served only by DSL are considered “underserved” regardless of the stated connection speed. Finally, locations already awarded funding under most federal and state programs or otherwise subject to a “binding commitment” to provide broadband service within the next 12 months will not be eligible for BEAD funding.
Last month OBD released its preliminary map of unserved and underserved locations in Missouri. This map, based on the FCC’s FABRIC, is the most comprehensive effort yet to accurately identify locations (homes, businesses and institutions) that should have access to broadband service, locations where ISPs claim to be providing service, and finally the advertised speed of the connection at the location. The preliminary map will be modified by OBD, based on criteria set out in its Initial Proposal (as previously described).
ISPs and Public Organizations will then have at least 45 days to “challenge” the status of a particular location or group of locations based on one of several criteria. These challenges can result in locations being found ineligible for BEAD funding or be reclassified as unserved or underserved. While it is hoped that most of the inaccuracies that plagued earlier FCC maps have been corrected, there likely still will be errors, and this makes participation in the process very important to the overall success of the BEAD program.
ISP Prequalification
Experience has taught OBD the importance of carefully vetting ISPs through a prequalification process before allowing them to submit proposals for BEAD funding. The FCC’s Rural Digital Opportunity Fund (RDOF) Program illustrated the folly of failing to adequately vet participants prior to the competitive bidding process. Many months after preliminary grant recipients were publicly announced, the FCC disqualified two of the largest “winners” of the competitive bidding process because they lacked the technology and/or the financial wherewithal to actually complete the promised projects.
To avoid repeating this result, OBD’s Initial Proposal requires ISPs to prequalify before they can participate in the BEAD funding program. Assuming the Initial Proposal is approved as expected, the Prequalification Process for the first round of BEAD funding is expected to begin on April 17 and close by May 31.
The BEAD Award Process
After establishing eligible funding locations and prequalifying ISPs, OBD will proceed to “round one” of the BEAD awards. During the month of April, OBD will amend its maps to create areas that will be eligible for BEAD funding. These areas will be selected by OBD based on factors such as the location of nearby qualified ISPs and the feasibility of connecting unserved and underserved locations to existing networks.
Approved ISPs will then be able to submit proposals for BEAD funding for any one or combination of these areas, but they must agree to serve every location in the area or areas they have selected. Further, in this first funding round only, proposals that offer FTTP for all locations, will be awarded BEAD funds even if other technologies could provide service at a lower cost, so long as the amount of BEAD funds requested does not exceed a maximum BEAD outlay amount established by OBD.
In the case of multiple proposals for a given area, awards will be based on a numeric scoring matrix, that takes many factors into account. However, three of those factors seem likely to be most relevant. First, the amount of BEAD funds requested (the BEAD Outlay) likely will be very important in determining which ISP receives a BEAD grant. The scoring matrix will favor proposals that request a lower BEAD Outlay. Second, while the BEAD Outlay is important, proposals that offer FTTP rather than other alternate technologies and proposals with shorter deployment times will receive more points. Finally, a substantial number of points will be awarded for proposals that have public support, and this is especially true for proposals where Public Organizations are providing some level of financial support.
What is the Strategy for Public Organizations?
This is a multipart blog, and future articles will focus on specific ways Public Organizations can help make the BEAD program a success in their communities. However, it’s clear Public Organizations can take steps now to set the stage. OBD’s preliminary map enables every community to see each home, business and structure that needs a broadband connection and to identify the ISPs that claim to be able to provide service to that location – and the maximum level of service they can provide.
Local Public Organizations are uniquely able to verify that data because they are a part of the local community. This is especially important because individuals cannot challenge the FCC data or OBD’s map directly. This means that Public Organizations will need to play a critical role in developing challenges to the map when that is necessary. Equally important, local Public Organizations can serve a vital role in assessing, and if necessary, rebutting challenges to the map that are raised by ISPs in the area.
In addition, the data in the preliminary map gives Public Organizations a list of the providers serving each location – both in the community and in surrounding areas. In all likelihood, these ISPs will be making the business decision regarding whether they will participate in BEAD funding, and if so, the specific locations where they will extend service, and the type of technology (fiber, cable or fixed wireless) they will use.
These decisions will not be made in a vacuum. Among other considerations, ISPs will assess the ease of obtaining permits, right of way, and easements to construct the improvements, and the level of customer subscriptions they can expect in the new service area. As will become evident in later blogs, Public Organizations can do much to help and encourage ISPs as the grapple with these issues. However, the first step (and perhaps the most important one), is for Public Organizations in the community to reach out to each local ISP to let them know they are interested in participating and assisting them in the process of developing a BEAD proposal.
*** BEAD offers communities across the state an historic opportunity to finally become connected to the internet in ways that will improve the health, education and economic opportunity for everyone. For our state, this truly is “our shot” .. and we must not throw it away.
