2023 set the stage for the $42 billion Broadband Equity, Access and Deployment (BEAD) program, as the NTIA announced how much funding each state would get and states began drafting their initial proposals.

But as we shift into 2024, the broadband industry is wondering how states are parsing through the BEAD requirements as well as next steps to kick off the challenge process and eventually the deployment phase.

According to Sarah Morris, NTIA’s principal deputy assistant secretary and deputy administrator, 2024 will be “the year of execution” for BEAD. The agency is working to approve states’ initial proposals as quickly as possible so that states can get started on their challenge process.

The BEAD challenge process will determine which locations in states and territories are eligible to be served by grantees, and it’s “really where the rubber meets the road to ensure BEAD funding goes where that money is needed most,” Morris said at a USTelecom webinar Wednesday.

Once the NTIA approves volume one of a state or territory’s initial proposal, that entity can kick off its challenge process. As of last week, seven states have begun accepting BEAD challenges, said Morris. Three of those states, Louisiana, Kansas and Virginia, finished accepting challenges.

To keep the public informed of how states are progressing with BEAD, the NTIA has launched both a challenge process tracker and a dashboard that displays the status of each entity’s initial proposal.

“We’re working with urgency to approve all initial proposals,” Morris said. “We’re approving them on a rolling basis as they come in and different proposals need different amounts of feedback. So it’s not like a first-in, first-out sort of thing necessarily.”

Now that the initial proposal deadline has come and gone, she noted states are “really in the driver’s seat.” The challenge process will take a different amount of time for each state, depending on the complexity of the deployment landscape and how much BEAD funds it received relative to the number of underserved locations in that state.

“You’ll see a little bit more variability than what we’ve seen so far,” said Morris. “That’s partly why we have the initial proposal dashboard to kind of help folks right-size expectations relative to where states are in the process.”

But what aspects of the BEAD plan do states find most challenging? For Valarry Bullard, director of the New Jersey Broadband Office, it’s outreach.

New Jersey established its broadband office just last year and “spent a good amount of time” connecting with partner agencies and local organizations “to help break down what broadband really means…making sure everyone knew we were here and [they know how to contact us].”

The mapping challenge process is another top-of-mind concern, Bullard said, especially “helping our local governments and nonprofit agencies understand the kind of data that’s going to be collected and some of the requirements.”

“So that by the time we do launch our [challenge] portal, everyone will understand what that process looks like,” she said.

She added New Jersey’s broadband office reached out to some of the local governments when it submitted challenges to the FCC’s national broadband map, “so some of them are familiar with what that process entails.”

“But we do know that with 21 counties, we will have to continue those efforts and remind them how important it is to secure that FRN number,” which is an identification number for entities doing business with the FCC, “and how important it is to understand the data from CostQuest…all the technicalities that come with that.”

Concerns from ISPs on implementing BEAD

BEAD program proposals are going to be different in each state, so it’s critical to get those right “or you won’t have broadband providers participating in the program,” said Pamela Sherwood, Brightspeed’s VP of Regulatory, Compliance and Broadband Office.

One concern Brightspeed has brought up is how states are defining project scope areas in their initial proposals.

“We’ve had a few states that proposed really large project areas and it makes it very challenging for providers that don’t have footprint that mirrors that to come in and build, because we’re leveraging our existing infrastructure and upgrading DSL customers in our footprint to new and better technologies,” she said.

ISPs are also thinking about how to fulfill all the compliance reporting requirements for BEAD. It partly involves “having that internal infrastructure” to meet the reporting obligations of each state, said Katharine Saunders, VP and deputy general counsel at Verizon.

“I think NTIA has done some really important stuff in terms of the Part 200 guidance they issued recently to make some of those obligations a little bit more cohesive across the states,” Saunders noted.

“We’re not just looking for a short-term fix,” she added. “I would encourage the states to be looking really hard to make sure it’s not just the table stakes of building what you say you’re going build in your bid. It’s also being able to fulfill those requirements down the road and serve the constituents in that state for years to come.”

Although the NTIA has sought to clarify BEAD requirements, there are still a lot of “gray areas” from a compliance perspective, said Kristi Westbrock, CEO at Consolidated Telephone Company (CTC). And it’s particularly challenging “when you’re looking across state lines.”

“Like this [state] program is going to require this, [while that] is going to require something else. Really the management of that and the resources that it takes,” she said.

“Especially when you’re a smaller provider in that rural telecom space. You don’t have all those resources at your fingertips to manage that many pieces of compliance.”