CCG Consulting President Doug Dawson thinks NTIA chose the worst features of the Rural Digital Opportunity Fund (RDOF) in its new BEAD restructuring notice. The notice makes the following major changes to the process of choosing BEAD grant winners, Dawson notes in his Pots and Pans Broadband for All blog:
- Any technology that can deliver 100/20 Mbps broadband today is now eligible to win a BEAD grant. While there is a caveat that a winning technology must have the capability over time to scale to support rural 5G and other wireless needs, there is no specific commitment required by a grant winner to make future upgrades.
- The new process requires State Broadband Offices to consider eliminating any BEAD locations that are already served by unlicensed fixed wireless. If a WISP already claims a speed of at least 100/20 Mbps in the FCC maps for a BEAD location, the WISP can certify that it is providing served speeds and these locations are removed from BEAD. This could conceivably eliminate millions of BEAD locations from BEAD grants, Dawson states.
- The primary criteria for picking a winner is the requested BEAD funds per eligible location. Whoever asks for the least amount of money wins. Broadband Grant Offices can consider speed to deployment and broadband speeds, but only if a grant application is within 15 percent of the lowest bid. This feels like a one-round reverse auction, according to the broadband consultant.
The fiber preference was eliminated in the new notice, Inside Towers reported. Dawson says that preference resulted in a lot of electric cooperatives and others winning RDOF funding to build fiber. “Since BEAD will now allow fixed wireless, LEO satellite, and FWA cellular wireless to compete head-to-head with fiber, it seems likely that fiber only wins in places where no other technology is seeking funding. We can only guess how many fiber grant requests that will kill – but it’s not hard to imagine these rules killing 80 percent or 90 percent of fiber awards,” he says. It’s going to boil down to how much BEAD funding the wireless ISPs and satellite companies will pursue. He believes the more interesting dynamic will be the bidding battle between fixed wireless and satellite – because both can easily underbid fiber projects.
“State Broadband Offices can require wireless and satellite providers to swear they will have the capacity to serve everybody,” he states but Dawson believes every ISP that decides to pursue BEAD will make this promise. “The BEAD grant will be awarded and built, and everybody will forget about the original intent – except the households who still don’t have good broadband.”
The notice also ignores the second big purpose of the BEAD grant program – to provide jobs to build and operate networks, according to Dawson. “It’s clear to me that the NTIA wants to spend as little as possible of the $42.5 billion money. The U.S. Department of Commerce wants to take credit for saving money and doesn’t care about getting good broadband to rural areas,” states Dawson. He says the notice “has a clear message: Congress said we have to build broadband everywhere, so we’ll build what is barely adequate for today and ignore what’s needed for the future. This Notice punts the rural broadband gap down the road for the next generation to solve.”
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