NTIA Announces Conditional Waivers of BEAD Letter of Credit Requirements
Recognizing the unique challenges of small and independent broadband providers, the National Telecommunication & Information Administration (NTIA) announced conditional waivers to its Letter of Credit requirement in the Broadband Equity Access and Deployment (BEAD) Notice of Funding Opportunity (NoFO). Previously, the NoFO required BEAD subgrantees to obtain a Letter of Credit for an amount equal to 25% of the total award from a large bank with total assets ranked among the largest 100 U.S. banks. In its waiver announcement, NTIA reiterated its goal of funding sustainable broadband networks and noted that “where larger ISPs may have the resources to deploy quickly, smaller providers often have unique expertise in serving some of the hardest-to-reach communities in America.”
NTIA’s waivers are as follows:
• Subgrantees may use a Letter of Credit from a Credit Union that is insured by the National Credit Union Administration and that has a credit union safety rating issued by Weiss of B− or better.
• Subgrantees may use a Performance Bond for the full award amount instead of a Letter of Credit.
• Applicants may decrease the original Letter of Credit or Performance Bond amount upon achievement of buildout milestones.
• If an Eligible Entity (i.e., state/territory/Tribal entity) chooses to issue funding on a reimbursable basis, it can reduce the Letter of Credit or Performance Bond amount to 10% of the total award.
In written comments and in-person advocacy, JSI urged NTIA to increase flexibility in the Letter of Credit requirement and applaud NTIA’s waivers as critical measures ensuring robust participation in BEAD by a variety of broadband providers. Contact Amanda Molina with any questions regarding BEAD or if your company needs assistance with Federal, regional, or state broadband grants.