U.S. Commerce Secretary Gina Raimondo is urging small broadband providers to apply for Broadband Equity, Access, and Deployment (BEAD) grants, despite some in the industry having concerns over whether the program provides a level playing field.
Speaking at the RTIME 2024 conference, Raimondo addressed small, rural providers.“We want you to apply. We need you to apply. We will work with you and hold your hand so that you can apply. The message is: Prepare to compete and win. You can win," she said.
The National Telecommunications and Information Administration (NTIA), located within the Department of Commerce, is overseeing the largest broadband investment in U.S. history through the $42.5 billion BEAD program.
In a discussion with Raimondo, Shirley Bloomfield, CEO of NTCA–The Rural Broadband Association, expressed concerns about bureaucratic hurdles facing rural companies applying for BEAD grants. "I’m concerned that a number of [NTCA] members might look at this program and say it's too administrative, it’s too burdensome, there are too many rules, there are too many hoops to jump through,” Bloomfield said.
In response, Raimondo emphasized the importance of small provider participation. With 90% of the unserved U.S. population living in rural areas, bigger providers "aren’t necessarily interested in serving those areas," she said. Many rural communities are so remote that she doesn't "think we can get it done unless NTCA members step up and apply and participate. We are depending on them to get in the game with us.”
Keeping BEAD simple
While maintaining standards to “protect taxpayers,” Raimondo said the NTIA is committed to reducing bureaucracy and red tape to make applying for BEAD simple. The success of the massive BEAD investment, she added, rides on NTIA's collaboration with various agencies and organizations.
Particularly for smaller providers that lack resources like lawyers, lobbyists and compliance teams, streamlining the process will help them “deal with the labryinth of [NTIA's] applications." That said, the administration is communicating with governors’ offices in order to provide a single point of contact for broadband providers applying in each state.
Additionally, the NTIA is ready to hear feedback on BEAD’s rules and application process. “It’s a pitch and catch between [providers] and us,” said Raimondo. For example, after pushback against the BEAD program’s letter of credit requirement for BEAD, NTIA applied changes to the rule, offering waivers and accommodations.
And if companies see any other parts of the program as “too bureaucratic or burdensome,” she added, “let us know, we will find solutions.”
Supply chain concerns
The supply chain is another concern for small providers, Bloomfield noted. When BEAD money starts to hit the market in late 2024 and 2025, fiber providers and other technology or infrastructure resources could be overrun by “anybody and everybody,” she said, leading companies to hoard supplies as many did during the COVID-era supply chain pileup.
But the NTIA has seen some of these supply issues in the past, Raimondo said, adding “We’re going to do whatever we can to not let that happen now.” Specifically, she highlighted that the Build in America initiative is being taken seriously by the administration.
The Build America Buy America Act (BABA) places regulations on the sourcing and manufacturing of materials used in government-funded projects like BEAD, requiring that materials be both manufactured and sourced predominantly from within the U.S. The NTIA has had to navigate through the BABA provision amid concerns it could “cause significant delays in actual deployments.” In response to those fears, it issued a proposed waiver to some of the Buy America rules for BEAD recipients.
But even though the NTIA will allow some materials to be made outside of the U.S., Raimondo said the administration is “also serious about creating jobs in America.”
“We’re making this in America which should give all of us some comfort that not only will we create jobs here but we’ll have the supply and we’ll have it domestically,” she added.
According to Dell’Oro analyst Jeff Heynen, BABA requirements are already starting to impact the market for PON equipment, as more vendors interested in being part of projects have announced domestic manufacturing relationships. For example, Nokia last year announced it would team with longtime manufacturing partner Sanmina to bring production of fiber network electronics to the U.S. state of Wisconsin. Both CommScope and Corning announced expanded manufacturing plans, as well.
Workforce woes
As the U.S. faces historically low unemployment rates, a nationwide labor shortage means that small providers in rural areas are also facing an especially limited talent pool for building and operating networks.
“It is a real challenge,” said Raimondo. “But it’s such an exciting opportunity.” Despite being branded as a broadband infrastructure investment, she called BEAD “a jobs program,” too. The NTIA estimates that BEAD will create at least 150,000 jobs laying fiber and connecting homes.
Many of those won’t require college degrees, so the administration has “a huge focus” on workforce development. For example, its Million Women in Construction Initiative started in 2022 aims to bring more women into the broadband construction industry.
Noting that some broadband construction positions can pay up to $70 an hour, Raimondo said NTIA will continue placing an “emphasis on jobs, job training and finding people who might be in lower wage jobs who want something better and are willing to get trained.”