US Department of the Treasury Proposes Important New Guidance for Broadband Projects

On March 28, 2023, the Treasury Department issued and invited comments on proposed compliance guidance applicable to broadband projects funded through Coronavirus State and Local Fiscal Recovery Fund (SLFRF) or Capital Projects Fund (CPF) awards. The Proposed Guidance addresses a variety of important questions relating to the use of SLFRF and CPF funds for broadband projects, including:

• The crucial distinction between ISPs acting as “contractors” vs. “subrecipients”;
• The proper treatment of ISP revenue as “program income”;
• How ISPs can obtain title to grant-funded infrastructure;
• The scope of the Federal Interest in grant-funded property;
• Requirements for transfer of grant-funded property to a third party;
• Procurement requirements (must a contract be put out for bid?); and
• Audits and monitoring requirements.

If Treasury adopts the Guidance generally as proposed, it could have significant ramifications for grant-funded broadband projects around the country. Comments are due by April 11.