Nation’s Largest Broadband Grant Program Launches Second Funding Round

PDF

The National Telecommunications and Information Administration (NTIA) recently announced the launch of a second funding round under the Broadband Equity, Access, and Deployment (BEAD) Program, the largest broadband grant initiative in the nation’s history. The second funding round follows NTIA’s approval of BEAD Final Proposals submitted by each state/territory broadband office and aims to capture locations that still may remain unserved. The new funding round will draw on part of the estimated $21 billion left over after NTIA fundamentally restructured the BEAD Program to move from a performance-focused approach that prioritized end-to-end fiber networks to a more cost-focused approach that required broadband offices to apply technology-neutral criteria to grant decisions. The new funding round generally will follow the rules governing the initial funding round, although on a compressed timeframe that will require quick action from broadband offices, service providers, and other stakeholders in contrast to the years-long slog to initial BEAD funding. NTIA’s announcement is notable not only for what it says, but also for what it leaves unaddressed. In particular, NTIA provides no further details on when or how broadband offices may utilize the rest of the remaining BEAD funding, including long-awaited agency guidance on potential support for broadband adoption, affordability, and other non-deployment projects.

NTIA identifies three types of locations that may still need BEAD support following Final Proposal implementation.

• First, initial BEAD awards excluded locations covered by preexisting federal/state broadband grants. However, some service providers have since defaulted on these grants, leaving locations potentially unserved without a follow-up BEAD funding round.
• Second, the original list of BEAD-eligible locations was subject to a challenge process where entities – including service providers – claimed that certain locations were already served and therefore ineligible for support. NTIA now suggests that some of these service claims may have been misreported or overstated, and that previously challenged locations may still be unserved.
• Third, NTIA indicates that the latest federal broadband maps identify additional unserved locations not covered in the Final Proposals due to missed construction, reporting errors, or other data issues.

NTIA plans to capture all remaining BEAD unserved locations through a multistep, back-and-forth process:

• Supplemental BEAD Eligible Location Lists – At the same time it announced the second BEAD funding round, NTIA provided each state/territory broadband office with a supplemental list of locations that may remain unserved for the reasons listed above. The list’s scope appears to be narrow. The list apparently only identifies locations considered “unserved” (i.e., lack access to broadband with speeds of not less than 25/3 Mbps) and would not include locations merely considered “underserved” (i.e., lack access to broadband with speeds of not less than 100/20 Mbps). The list also does not appear to include potentially eligible community anchor institutions, such as hospitals, educational institutions, and government buildings, possibly creating a coverage gap in the second BEAD funding round. As with the initial BEAD funding list, the supplemental list will not account for locations already covered by state/local grant commitments; the broadband offices will be responsible for ensuring such locations do not receive duplicative BEAD support.
• Review and Publication of Revised BEAD Eligible Location Lists – Broadband offices must complete their initial reviews of the supplemental lists and make any necessary corrections within 30 days of receipt. Broadband offices must then publish their revised BEAD-eligible location lists for public inspection within 7 days of completing their initial reviews.
• Abbreviated Challenge Process – Broadband service providers, local governments, and nonprofit organizations (but not individuals) will have 30 days from publication of the revised lists to submit evidence that a purportedly unserved location actually is served or will be served (i.e., speeds of at least 100/20 Mbps, latency of no more than 100 ms round trip) within the next year and should thus be excluded from eligibility. This challenge process can only be used to remove locations from eligibility, and not to reclassify locations from served or underserved to unserved. Challengers bear the burden of submitting sufficient evidence to warrant removing a location from BEAD eligibility, including through evidence of existing customers, performance data, physical verifications, and planned service milestones. NTIA notes that the evidence necessary for a successful challenge may vary by technology (e.g., as-built diagrams for wireline networks, propagation studies for fixed wireless networks, spot beam capacity/backhaul information for satellite networks). Challenge process service claims also must meet the requirements for a BEAD-standard installation, including service initiation within 10 business days of a request at no extra customer charge. Broadband offices must adjudicate challenges within 30 days of the close of a challenge window. There will be no rebuttal round, and NTIA reserves sole discretion to reverse a broadband office’s challenge determination.
• NTIA Review and Funding Limits – After completion of the challenge process, broadband offices will submit their final proposed supplemental BEAD-eligible location lists to NTIA for review and approval. The amount of additional funding approved by NTIA will be a broadband office’s average deployment cost per location under its Final Proposal multiplied by the number of additional unserved locations in the supplemental BEAD-eligible location list. This may lead to a budgetary shortfall, because the locations covered by this second funding round may be some of the costliest to serve due to remoteness, environmental conditions, or other deployment barriers. Broadband offices may seek additional funding but will be required to demonstrate “extraordinary circumstances,” including that they took all practicable steps to complete deployment within the established budgets, including consideration of the most cost-effective technologies.
• Second BEAD Application Round – Once NTIA approves a supplemental BEAD-eligible location list, the relevant broadband office will have 90 days to run a second BEAD application round for those locations consistent with the scoring criteria and other requirements applied during the initial BEAD application round. The broadband offices will then make their provisional award decisions and submit their plans to NTIA for final review and approval.
• NTIA Final Approval – NTIA will have 90 days to approve a broadband office’s plan and reserves the right to reject any plan that lacks sufficient detail, imposes excessive costs, or otherwise violates BEAD rules or NTIA policies. NTIA was not shy about exercising its review powers in the initial BEAD funding round, and there is no reason to think it will not do so again to require broadband offices to undergo multiple curing rounds before issuing final approvals.

While this process will take several months to complete, service providers should prepare now to investigate newly eligible locations, submit location challenges where necessary, model potential funding amounts, and consider whether to apply to serve additional areas under this second funding round. In particular, service providers should start gathering data if they plan to meet the evidentiary requirements imposed for challenges, as it appears broadband offices and NTIA plan to subject service claims to more scrutiny this time around.

NTIA’s announcement still leaves one major question unanswered: when will the remaining billions in BEAD Program funding be made available and for what purposes? The second BEAD funding round likely will put a modest dent in the estimated $21 billion currently remaining in the BEAD Program coffers. NTIA has repeatedly delayed guidance on the authorized uses for such funds, originally promising direction by March 2026 and then stating it would arrive by summer’s end. The BEAD Program statute states that remaining funds may be used to support broadband adoption, affordability, and other nondeployment projects, but NTIA has not authorized any such projects since overhauling the program. As a result, NTIA’s recent announcement may only be a prelude to a much larger funding opportunity later this year.