NTIA released a conditional waiver of the Broadband, Equity, Access and Deployment (BEAD) program’s letter of credit (LOC) requirement yesterday. In September, hundreds of individuals and groups urged the agency to remove the requirement, citing potential limitations on small providers’ participation.
With the waiver, subgrantees may receive an LOC from any U.S. credit union that is National Credit Union Administration-insured with a Weiss credit union safety rating of B- or better. Or they can provide a performance bond issued by a company holding a certificate of authority and equal to 100% of the BEAD sub-award.
WISPA – Broadband Without Boundaries applauds the NTIA’s action
“NTIA’s announcement of this important action explicitly recognizes that smaller broadband providers have unique experience in serving America’s hardest-to-reach communities, allowing them to play a significant role in the success of BEAD. By reducing the cost, complexity and market hurdles to access LoCs, NTIA’s programmatic waiver will improve the pool of available solutions for states, inviting more providers needed to reach the millions of locations that truly lack reliable broadband. Inviting more providers to help bridge the digital divide equals better outcomes. This waiver will help smaller players embrace the opportunities within BEAD to reach our un- and underserved farms, manufacturers and service centers, isolated and sparsely-populated communities, Tribal areas, and public institutions, among others,” the trade organization said WISPA VP of Policy Louis Peraertz in a statement.
The waiver allows eligible entities to reduce their LOC obligation amount below 25% or performance bond below 100% over time based on meeting deployment milestones. It also lets the initial LOC or performance bond amount to be 10% of the sub-award amount if an entity issues funding on a reimbursable basis of no more than six months.