The National Telecommunications and Information Administration (NTIA) released the long-awaited new rules for the $42.5 billion Broadband Equity, Access, and Deployment (BEAD) rural broadband funding program today. The new rules eliminate the preference for fiber that was part of the initial rules.
The rules establish new scoring criteria that states must follow in selecting funding recipients and direct states to select the lowest-cost applicants (with a few caveats).
The previous three-tier system of priority, reliable, and extremely high-cost technologies is eliminated. Instead, any technology is equally eligible if it meets the new definition of a “priority broadband project.”
That definition includes projects that provide broadband service at 100/20 Mbps speeds, have a latency less than or equal to 100 milliseconds and “can easily scale speeds over time to meet the evolving connectivity needs of households and businesses and support the deployment of 5G, successor wireless technologies and other advanced services.”
States are not required to establish an extremely high cost per location threshold but are expected to reject projects with “excessive” costs.
Impact on the States
States that already have selected or are in the process of selecting awardees must conduct at least one additional subgrantee selection round for every BEAD-eligible location. Applicants planning to use any technology meeting the new “priority” definition will be able to participate in that round.
All existing final proposals must be resubmitted, reflecting the results of the additional round within 90 days. NTIA pledged to review the new proposals within an additional 90 days.
States that conducted a prequalification process will be required to accept additional applications for prequalification.
New Scoring Criteria
The new scoring criteria are as follows:
Primary: Minimal BEAD outlay
The rules call for states to consider all applications within 15% of the one with the lowest BEAD outlay. Those applicants will then be judged based on secondary criteria.
Secondary:
- Speed to deployment
- Speed of network and other technical considerations
- Preliminary/provisional subgrantees can get extra points
States will not have to redo the challenge process for eligible locations but will have to eliminate locations where the only service meeting performance requirements use fixed wireless technology operating in unlicensed spectrum.
States will also be required to make locations eligible for BEAD if previously funded deployments will not occur as planned. That will be good news for areas that experienced Rural Digital Opportunity Fund (RDOF) defaults.
In selecting applicants, states may no longer use criteria such as affordability, equitable workforce development and job quality, open access, or local and Tribal coordination.
Non-deployment Funding
In the policy notice released today, NTIA rescinds approval of all non-deployment activities approved in initial proposals. The agency pledged to issue new guidance on that topic “in the future.”
How Big a Windfall is This for Starlink?
Some stakeholders had been expecting the rules to change to favor Elon Musk’s Starlink low Earth orbit (LEO) satellite service.
A few thoughts on this:
- LEO satellite operators will be required to quantify service using “LEO capacity subgrants” — attesting to their ability to offer service meeting performance requirements for 10 years. How extensively Starlink will be able to make this commitment is unclear.
- Starlink isn’t the only LEO satellite operator pursuing BEAD funding. Amazon’s Project Kuiper already has tentatively won some BEAD funding and is prequalified to apply in numerous states.
- It isn’t out of the realm of possibility that President Trump, currently feuding with Musk, might impose additional BEAD changes to tip the scales away from Musk.
- As Washington insider and New Street Research policy advisor Blair Levin noted in a research note this morning, Republican governors may now be more open to criticizing Starlink and states will still have some may be able to use waivers to favor terrestrial broadband options.
Stakeholder Reactions
“The American people will get the benefit of the bargain, with connectivity delivered around the country at a fraction of the cost of the original program,” said Commerce Secretary Howard Lutnick in a prepared statement.
Many stakeholders will disagree.
Provider associations have been protesting the anticipated changes, as have public interest groups.
