By Mike Saperstein, SVP Government Affairs and Chief Strategy Officer
The road to universal American broadband connectivity is a long one rife with uncertainties. Will each state’s share of the BEAD program, a historic $42 billion Congressional investment in broadband, be sufficient to cover the costs of connecting the unconnected? Will service providers show up and offer to provide service to every last mile? Which blend of technologies makes the most sense in a state’s varied terrain and density? To try to reduce this uncertainty, NTIA and other parties have provided sophisticated models for how things could play out in an ideal world. Models can be helpful planning tools, but experienced policymakers and infrastructure providers know that the model doesn’t always work as planned.
This version of “best laid plans” is playing out today via an important NTIA requirement of the BEAD process: setting the Extremely High Cost Threshold (EHCT). As we’ve written before, the EHCT is a minimum cost-per-location-passed below which states cannot consider applications for non-fiber deployments. This requirement is not derived from the underlying statute but is part of NTIA’s implementation of the BEAD program. As long as a state receives a fiber proposal with a per location cost below the threshold, the state must select it over a non-fiber alternative, regardless of the cost differential and other considerations. Given few states will be able to achieve 100% fiber with BEAD funds alone, the EHCT could become an early pitfall to achieving the right mix of technologies by limiting a state’s flexibility in spending its BEAD allocation. Even worse, if a state sets the wrong threshold out of the gate, many worthy service providers may opt to sit the program out altogether. Why do the hard work of preparing a bid that likely won’t even be reviewed? That’s a shame because reliable broadband services like Fixed Wireless Access are rapidly increasing in popularity due to their performance and affordability.
A number of recent reports and analyses from fiber proponents produce sophisticated models to help states set the appropriate EHCT. Though perhaps economically sound in theory, using these models at this early stage risks feeding into the mistaken approach that a state should be setting an exact EHCT at this stage of the process—or at all. Producing cost models that would pre-determine an EHCT may unnecessarily limit participation and add in substantial programmatic risk, before the application period even opens.
Given this backdrop, it has been refreshing and reaffirming to see states taking a wider-angle view in their broadband plans, recognizing that job #1 is to promote the maximum amount of participation in their programs. Participation in turn increases the potential areas of coverage and provides real world insight into where (even in a subsidized environment) providers are willing to serve, with which technology, and for how much subsidy. No model can accurately recreate that.
Louisiana’s broadband office ConnectLA, as one of the first states out of the gate to release their Volume 2 initial proposals for BEAD implementation, is taking a practical, forward-looking approach to ensuring statewide connectivity. The premise is simple: design an inclusive program to attract the most potential service providers at the outset to cover every location in the state. They realize what every party planner knows: it’s best not to cut the guest list until you are sure people are going to show up. In their words:
ConnectLA’s EHCT focus is on the risk that the actual applications received may not be fully resolvable to deliver either FTTH or some other reliable broadband service to all eligible locations. Indeed, ConnectLA also seeks to guard against the risk that all eligible locations may not receive awardable proposals even via lower performance “reliable” applications from Cable/HFC or licensed fixed wireless providers. (ConnectLA, BEAD Initial Proposal Volume 2 at 38-39 (emphasis added)).
And importantly, ConnectLA emphasizes that while fiber is a significant part of the solution, it knows it will not be the only solution for solving the state’s connectivity challenges and would be short-sighted to deter other reliable broadband providers. So they don’t. They take an appropriate wait-and-see approach to see how the real world reacts to their plans.
By declining to establish any ex ante EHCT value, ConnectLA therefore is communicating that the state seeks active participation from all types of broadband providers and that an “all of the above” broadband technology strategy is in the best interests of the citizens of the state. (ConnectLA, BEAD Initial Proposal Volume 2 at 39 (emphasis added)).
Similarly in Wisconsin, its five-year action plan spends two pages (61-62) explaining that real-world costs at build-time in 2025 can be drastically different than a model using 2023 variables. It notes that current estimates are “subject to other variables that drive uncertainty” and changes in a few variables “could increase the cost of universal service by perhaps $100 to 200 million,” which is 10-20% of their total funding allocation.
This runs directly counter to the fiber proponents’ narrative that not only should states be setting a model-based EHCT at this early-stage, but that it should be set as high as possible because “[i]f an EHCT is set too low, fewer homes will receive fiber connectivity.” As we’ve pointed out before, the mechanics of the EHCT don’t work like this. Regardless of where the state sets its EHCT, it is free to pick a fiber provider at any cost—whether above or below the EHCT. Instead, states would be only limiting their own flexibility to pick the right technology at the right cost.
What makes ConnectLA’s vision even more remarkable is that NTIA’s model indicates that Louisiana likely has sufficient funding to take an all-fiber approach. Maybe. Yet they are “cognizant of the practical constraint that all eligible locations may not actually receive such an FTTH application, that costs may prove significantly higher in some areas or that certain locations may receive an application that cannot be granted due to overlap with a higher scoring application that cannot be resolved by the de-confliction mechanisms.” In other words, at some point the real-world kicks in. And planning for that at the outset is a true model for other states.
The post Maximizing Participation is the True Model for Planning BEAD Projects appeared first on Wireless Infrastructure Association.
Read the full story .