Some states will be filing their initial proposals in the BEAD rural broadband funding program soon if they haven’t already—and once NTIA approves a state’s proposal, the state will be eligible to receive 20% of its initial allocation in the program. That 20% can be a big number—exceeding $200 million for some states.

It’s unlikely, however, that we will see that money being awarded for broadband deployments, as the rules for how the initial 20% of funding can be used are somewhat restrictive.

As an NTIA spokesperson explained in response to an email inquiry from Telecompetitor:

“The primary use anticipated for a subset of the 20% of initial funds will be use by eligible entities to fund the conduct of their state challenge processes and their subgrantee programs. Once those are complete, eligible entities will submit their final proposal unlocking the remaining funds to implement their projects holistically. We recommend states take this approach prior to looking to use funds for other uses to ensure their deployment projects can be funded in full.”

“If eligible entities wish to use any initial funds for any other projects, and it’s approved by the Assistant Secretary, they can begin deployment in high-poverty areas where 80% of the locations are unserved. In all instances, it will be critical for eligible entities to remain focused on their mission of connecting all unserved and underserved locations.”

As the spokesperson explained, NTIA doesn’t automatically release the initial 20% of BEAD funds when a state’s initial proposal is approved.

To access the funding, states and territories must submit an initial proposal funding request, which is different from the initial proposal, the spokesperson explained.

“This is essentially the administrative grants process that requires a budget and description of the use of the funds,” the spokesperson said.

The spokesperson added that, in spending funding once it is obligated, states and territories must comply with all rules detailed in the BEAD notice of funding opportunity (NOFO).

Some states likely will receive their initial 20% of funding well in advance of other states. The deadline for filing initial proposals isn’t until December 27, which means that those states that wait until that time to file will not receive their initial 20% until 2024.

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