What Do BSPs Need To Consider When Thinking About BEAD?

The Broadband Equity Access and Deployment Fund (BEAD) is a game-changer, set to revolutionize the broadband funding landscape. BEAD offers an unprecedented infusion of funds aimed at scaling and connecting 100 percent of locations that still lack reliable or sufficient broadband access. This presents a rare opportunity for broadband service providers (BSPs) to make a lasting impact.
 

However, despite the immense potential of BEAD, a recent webinar by Calix revealed a surprising hesitation among potential participants. Nearly half of attendees were uncertain about their involvement in the program. As more states and territories begin receiving approval of their initial proposals from NTIA, the urgency to engage with the BEAD program becomes even more apparent.
 

Ultimately, the money is going to be distributed to someone. If you don’t want your competition to overbuild/take over your market share, you must consider applying. In this article, we delve into the key considerations for prospective applicants to maximize their chances of success.

1. Challenge period. If your state or territory still has an active/upcoming challenge period, be sure to participate—regardless of if you will be applying for the funds or not. Participating in this process will not only allow you to protect your current service area from competitors, but it will also ensure the locations that receive funding are those that truly need it. After completing the challenge period, you will then want to begin conducting feasibility studies and engage with your local broadband office directly. The greater your relationship with them is, the better prepared you will be to receive your fair share of the BEAD funding.
   
   
2. Matching funds. Every applicant must be ready to provide at least a 25% match on their total project cost. As you can expect, applicants that provide a higher match may be given preference over those who provide the minimum. This can provide an edge to larger tier one providers who can afford to provide matches of up to 50%! At the end of the day, while these tier one providers can afford higher matches, they aren’t going to be the ones to expand into those extremely rural areas and connect those who truly need it. It’s going to be the smaller local providers who live in those communities. To level the playing field, Calix created our Private Funding Program, where we can assist with finding an investor who can enable you to accomplish your goals and meet the needs of your communities.
   
   
3. Letter of Credit (LoC) and performance bonds. Attached to every BEAD Grant will be the requirement to provide a 25% LoC on the grant portion of the award. Or, you can provide a 100% performance bond on the total project cost. These bonds will be underwritten like a loan. Therefore, your balance sheet performance will become critical to understand what your bonding capacity looks like. Every sub-grantee should be prepared to provide at least three years of CPA-produced financials. In addition to our group of investors, we also have numerous partners who assist with securing a performance bond or LoC that fits your budget.
   
   
4. Cyber security and risk management. Not only are BEAD funds meant to connect the un(der)served, but they are also meant to build secure and resilient networks. In order to secure your funding, it is important to implement an effective cybersecurity and risk management plan. We recommend you adhere to the NIST Cybersecurity Framework as closely as possible. This framework is what your local broadband office will be looking for, so the more consistent your plan is, the more competitive your application will be. You can also find additional e-Learning courses in Calix University under our "Cybersecurity Awareness" bundle.
   
   
5. Labor and wages. Fair labor practices are one of the primary criteria in the scoring rubric for each state and territory. All the sub-grantees must have records of compliance with federal labor and employee laws for the last three years, including disclosure of any violations. These records will also be required from other stakeholders, like contractors and subcontractors. If you are a new start-up and don’t have these records yet, include fair labor protections into your future plans. Requirements will vary depending on your location, so be sure to consult with your local broadband office.
   
   
6. Workforce development. Recruiting a diversely skilled workforce is crucial for sub-grantees and even state offices. Each applicant must certify that their workforce is appropriately skilled and credentialed—employees must be technically qualified to complete all funded activities. Any non-deployment funds can be used to support workforce development goals, including upskilling and apprenticeships. Calix University offers a course on Workforce Development as well, filled with curated certifications, educational content, and programs for you to leverage for free.
   
   
7. Post-award requirements. After you successfully apply, qualify, and receive BEAD funding, you will need to shift your focus to building, but more importantly: reporting and compliance. Take a close look at your award agreement to catch any additional requirements and make sure you’re compliant with them all. It is also reasonable to expect regular reporting on a semi-annual basis. 

Note: Each state or territory may have slightly different takes on each of these points above. Be sure to review your local Initial Proposal Vol.2 and work with your broadband office to be as knowledgeable of these intricacies as possible.
 

In conclusion, the BEAD program presents an unparalleled opportunity for BSPs to bridge the digital divide and expand access to reliable internet connectivity. By considering the critical factors outlined in this article, applicants can position themselves for success in securing BEAD funds. As the digital landscape continues to evolve, proactive planning can not only drive business growth but also empower communities and pave the way for a more connected future.

To learn everything you need to know about funding, download "The Ultimate Guide to Broadband Funding: How To Win Funds for Your Broadband Business” or schedule a free funding consult with us.