Six of the country’s largest regional Internet Service Providers (ISPs), covering 44 states, are seeking alternatives to the current letter of credit requirement for participation in the Broadband Equity Access and Deployment (BEAD) program.
In a letter to Secretary of Commerce Gina Raimondo and Assistant Secretary of Commerce for Communications Alan Davidson, the ISPs highlighted industry-wide concerns that the current letter of credit requirement is overly burdensome and will reduce private investments to expand broadband, particularly in rural areas.
The ISPs — Brightspeed, Altafiber, Altice, Consolidated Communications, Windstream, and Ziply Fiber — also discussed the ways the current letter of credit requirements hold them back from BEAD deployment goals.
“Small, rural, municipal, and tribal ISPs have been vocal about the burden this requirement will create for their companies, organizations, and governments. We may be larger companies, but we will face similar burdens. These financial demands will reduce broadband investment by our companies, because we will either have to divert funds from ongoing network deployment or not participate in the BEAD program at all,” the letter said.
The letter continued: “We understand and are sympathetic to the goals of ensuring that an ISP is both financially able to build the promised networks and that the government can recoup its investment in the event of a default. However, the NTIA’s requirements go far beyond any other federal or state broadband funding program.”
Understanding the importance of the BEAD program and the need for guardrails that protect taxpayer funding, the companies propose alternatives that would “both show financial capability and protect taxpayers in the event an ISP defaults, while at the same time allowing the BEAD program to achieve its goals.”
This isn’t the first time that providers have expressed concern about letter of credit requirements stalling funding programs.