A few months back, the National Telecommunications and Information Administration (NTIA) announced the key details for its Broadband, Equity, Access, and Deployment (BEAD) Program, a $42.5 billion initiative to expand broadband access and adoption in unserved and underserved areas across the United States.
The BEAD Program is designed as a block-grant program, which means that states, the District of Columbia, and territories will receive funding based on the number of unserved households in their jurisdictions. The funds can be used to support a variety of activities, including:
- Building new broadband infrastructure
- Expanding access to existing broadband networks
- Providing affordability assistance to low-income households
- Promoting digital literacy and skills training
Allocation of BEAD Funds
The NTIA has released a formula for allocating BEAD funds to states. The formula takes into account the number of unserved households in each state, as well as the state’s median income. States with the highest number of unserved households and the lowest median incomes will receive the most funding.
Broadband Speed Standards
All projects funded by BEAD must ensure a minimum broadband speed of 100 Mbps download and 20 Mbps upload. This is in line with the Federal Communications Commission’s (FCC) definition of broadband.
Emphasis on Digital Equity
A significant highlight of the BEAD program is its stress on digital equity. This means that the program is designed to ensure that all Americans, regardless of their income, race, or location, have access to affordable, reliable broadband.
To achieve this goal, the BEAD Program requires states to integrate their Digital Equity Plans into their BEAD Five-Year Action Plans. These plans must identify and address the barriers to broadband adoption and use in their jurisdictions.
Affordability and Accessibility
Broadband projects financed through BEAD will need to introduce both a middle-class affordability plan and a low-cost broadband service option. This is expected to lead to a diverse range of affordability definitions across states and territories. The program further emphasizes robust stakeholder engagement, involving a wide range of community organizations, advocacy groups, and other stakeholders.
Extending Access
BEAD funds are eligible to be used to extend broadband services to multi-tenant buildings, particularly in low-income urban areas. This includes the deployment of Wi-Fi infrastructure to buildings that lack high-speed broadband access.
Prioritizing Broadband Expansion
The BEAD Program focuses on deploying broadband to unserved areas (those with less than 25 Mbps download/3 Mbps upload speeds) and underserved areas (those with speeds between 25-100 Mbps download/3-20 Mbps upload). An additional emphasis is placed on connecting Community Anchor Institutions lacking gigabit service. Priority is also given to projects utilizing fiber-optic technology.
Next Steps
The NTIA is expected to release additional guidance on the BEAD Program in the coming months. States are required to submit their BEAD Five-Year Action Plans by December 31, 2023.
The BEAD Program is a significant investment in broadband infrastructure and access. It is designed to close the digital divide and ensure that all Americans have the opportunity to participate in the digital economy.
BEAD winners will need significant private capital as well to fulfill their obligations such as a letter of credit and matching funds. Be sure to reach out to RT Advisors to learn more about how a flexible and experienced, investment banking team can help get you through this process.
Aside from his role as CEO of TMC and chairman of ITEXPO, Rich Tehrani is CEO of RT Advisors and a Registered Representative with and offering securities through Four Points Capital Partners LLC (Four Points) (Member FINRA/SIPC). RT Advisors is not owned by Four Points.
RT Advisors continues its mission of assisting tech companies in M&A and capital raising using our unique tech media background and relationships to aid companies to optimally position themselves. In addition, as of late we have been increasingly assisting fast-growing tech companies in obtaining non-dilutive capital. Please let us know if we can be of assistance. The above is not an endorsement or recommendation to buy/sell any security or sector mentioned. No companies mentioned above are current or past clients of RT Advisors.
