There is $21 billion available in Broadband Equity Access and Deployment Program (BEAD) funds that will be distribute to 722 recipients across the U.S., these BEAD funds have the potential to be transformational for bringing broadband access to new areas. To help highlight the upcoming BEAD implementation, Phillips Lytle Special Counsel Barlow Keener was joined by Marc Powell, Managing Director of Alvarez and Marsal for a conversation on PL Radio, the official podcast of Phillips Lytle LLP.
Barlow is a member of Phillips Lytle’s Telecommunications Industry Team and his expertise encompasses data centers, fiber networks, cell towers, wireless spectrum, and satellite matters. He has served as general counsel for a media company, in-house counsel for a telecommunications provider, and co-founder of an internet service provider startup. Marc possesses deep expertise in public infrastructure planning and projects. His background includes consulting with service providers on planning and deploying networks in addition to working with the broadband offices for several states, including Texas, Missouri, South Carolina and Montana.
Their conversation explores key components of the BEAD implementation and what municipalities and providers need to be aware of as they prepare to take on these funds. This is the first in a series of excerpts from their conversation. You can find the full podcast by following this link. This conversation has been edited for clarity.
Barlow Keener: What sort of services will sub-grantees across the country be searching for as they prepare to utilize BEAD funds?
Marc Powell: The BEAD program has been around for a long time. I think it started probably four years ago or so with the Infrastructure Investment and Jobs Act (IIJA). The way the program has worked is that money goes from the federal government to the states, and then from the states to internet service providers and telecom companies, who were essentially bidding on the amount of subsidy they would require in order to deploy internet service or broadband service in unserved and underserved areas. The program was initially thought out under the Biden administration, and there was a lot of complexity that each state had to go through in order to be eligible. So, they had to do an assessment of the service in their state. Then the states had to do a broadband plan as to how they were looking at closing that gap. They had to do what was called an initial proposal, which was a very complex kind of articulation of how they would run this massive procurement and select the recipients for the money, which had a lot of complexity around how recipients would qualify, what would be the criteria for selection, and how they would meet several federal requirements. Then, the states run the procurement and do what is called a final proposal, which is the articulation of this: ‘We’ve done everything you’ve asked us to do. This is who we plan to distribute the money to. Please approve our plan.’ And then the National Telecommunications Industry Administration (NTIA), under the Department of Commerce, would award and distribute the money. That’s where we were about a year ago.
BK: And how has that all changed after President Trump’s re-election?
MP: When the new administration in the federal government came in, they kind of canceled all of the final proposals and basically created what’s been referred to colloquially in the industry as BEAD 2.0 and BEAD 2.0 has new criteria for selection of the recipients. So essentially the states had to reevaluate and redo their final proposal, and we’re basically now at the point where, in the last, I would say in the last two months or so, last I looked, about 40 of the 50 states [have been approved]. This isn’t an exact number and the anticipation is that everyone will be approved in the next month or so. So, for those who have been approved, they’re about to be off to the races. And the main issue that we’re finding is that you have two types of awardees. You have fiber, fixed wireless and satellite. I tend to think also of big companies versus small companies. There are large awardees: AT&T, Comcast, Charter, Starlink, those guys. They’ve done federally funded work before. So they’re very comfortable with all of the requirements that come along with federal funding. But I’ll give an example. I won’t name the company, but a client of ours, is a company that has about $10 million in revenue annually, and they’re awarded around $150 million in BEAD funds across four different states. So, they have a complexity that they now have to deal with which is in some sense outsized with their company. Not that they can’t do it, but they have two or three years to deploy capital program spending – which is like four if you annualize it – that’s going to be three or four times their annual revenues. So, they need a lot of help and we’re helping them in multiple ways, and I can mention three ways in which we help them. One way we help is the whole issue of compliance and reporting. So this firm, like many others, has not done much federally funded work before and certainly not work funded by the NTIA through the states in the way they are. So, the whole issue of compliance, reporting and maintaining an audit trail is something that they need help with. Just the sheer complexity of managing subcontractors across four states that are under different regulations with different counties, different cities, is also very complicated. They also need help in program management and owner’s rep, if you want to call it that. And then finally, there’s a requirement of generating some matching funds. Because BEAD covers 75%. So you need a 25% matching fund. It varies. Some states are putting in some of that money. But in general, you need to find 25%. So they also need help with financing. So, all of the above are the areas where we help those clients.
Part two of our series on BEAD 2.0 deployment will be published in this space. It explores how internet service providers will be affected by Build America, Buy America, and the solutions available to providers as they navigate new rules and regulations. The entire podcast featuring Barlow and Marc can be found here.
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