Nearly one-third of electric co-ops have declined BEAD awards – NRECA

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An industry group representing electric cooperatives is taking its quest for a "course correction" on the Broadband Equity Access and Deployment (BEAD) program to the Trump administration, and flagging that "many" of its members are declining their awards due to ongoing complications with the broadband deployment program.

In a letter addressed to Commerce Secretary Howard Lutnick, Jim Matheson, CEO of the National Rural Electric Cooperatives Association (NRECA), called upon the administration to "correct course" on the $42.5 billion BEAD program "and ensure remaining funds are deployed in ways that advance, rather than hinder, rural broadband deployment."

The letter, dated September 16, followed a prior statement NRECA released to the media in which the organization flagged several concerns with the direction of the BEAD program and asked that NTIA address those issues as it opens up funding for a secondary bidding round.

Related:Electric co-ops want a BEAD 'course correction'

Now, in his follow-up letter to Lutnick, Matheson noted a significant number of electric cooperatives that won BEAD awards are declining them, with more expected to do so.

"63 electric cooperatives across 27 states received provisional BEAD awards to offer reliable high-speed broadband to some of the most challenging eligible locations in the country. But delayed implementation and shifting guidance have created a program defined by uncertainty and confusion. Instead of accelerating deployment, continual revisions to the program have discouraged participation," said Matheson.

"To date, 20 of the 63 electric cooperatives originally slated to participate in BEAD have withdrawn from the program. Many others are considering withdrawal, citing concerns over the application of extra-statutory pole attachment requirements as a condition of participation," he added.

Of course, the supplemental funding round is designed to fill in location gaps where BEAD bidders, like the aforementioned co-ops, have dropped their awards, as well as where providers have defaulted in other broadband programs since BEAD's funding map was drawn. But NRECA's letter stresses that the BEAD program's current conditions are making it difficult for many providers to participate at all.

In turn, the association asks that NTIA make multiple changes "applicable to both the initial and forthcoming supplemental deployment phases." Those include increasing the cost thresholds "to better reflect equipment/labor cost increases and supply chain issues" as well as increasing the Build America, Buy America de minimis $1 million per project cap, which the group says is problematic because it "unfairly impacts larger projects" and because "fiber prices increased 40% in August alone from at least one supplier."

Related:Electric co-ops 'not happy' with BEAD

NRECA further asks NTIA to nix "extra-statutory mandates (such as requiring statutorily exempt pole owners to adhere to FCC pole rules) that increase regulatory burdens and costs." The group also suggested using remaining BEAD dollars (those "non-deployment" funds) to streamline permitting processes, increase rural middle-mile capacity and bolster the broadband workforce.

In addition to Lutnick, NRECA's letter is addressed to NTIA Chief Arielle Roth, as well as Stuart Levenbach at the Office of Management and Budget (OMB) and Jacob Marco at the National Economic Council (NEC).

Remaining locations may vary...

Meanwhile, as some stakeholders seek to influence the direction BEAD takes from here, a new study gives a clearer picture of the funding and locations leftover for NTIA's recently announced supplemental funding round. It also raises questions about just how many of those locations will successfully remain on the funding map.

According to an analysis authored by Alex Karras and Michael Santorelli with the Advanced Communications Law and Policy Institute (ACLP) at New York Law School, there are likely an estimated 1,041,099 million remaining locations on NTIA's list for the supplemental funding round, resulting in an anticipated allocation of between $5.3 billion and $8.8 billion for deployments. That would leave $12.2 billion to $15.7 billion in actual "non-deployment" funds, for which the NTIA has yet to issue guidance.

Related:SpaceX doubles down on push to abolish rural broadband subsidies

But whether or not those billions in supplemental funding get awarded for all remaining 1.04 million locations may come down to challenge processes, wherein ISPs can "challenge" the idea that a location is unserved and eligible for public funding by proving they already provide service there.

As ACLP's study notes: "A challenger can strike a location off the list with evidence of service on copper, cable, fiber, licensed or licensed-by-rule fixed wireless, unlicensed fixed wireless, and non-geostationary (i.e., LEO) satellite."

That may prove problematic indeed. According to ACLP's data, low-Earth orbit (LEO) satellite is available to 1,038,504 locations, "or 99.8% of those on the supplemental list," while unlicensed fixed wireless is available at 155,826 locations, or 15%.

"Consequently, 99.8% of locations on the list could be challenged by either LEO or ULFW, leaving only 2,561 locations with no challengeable technology of any kind according to the latest FCC data," states the ACLP analysis.

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