Why the Letter of Credit requirement could sink BEAD

The Broadband Equity, Access, and Deployment (BEAD) program, the US government’s $42 billion broadband grants program, requires recipients to provide a Letter of Credit for 25% of the grant award. Alongside the additional 25% match requirement, this capital barrier will shut out a huge number of internet service providers (ISP).The small and community-centered ISPs, minority and women-owned businesses, nonprofits, and municipalities that the program claims to be targeting will be most affected. These are the providers best positioned to connect un(der)-served Americans. There are alternatives that can safeguide taxpayer dollars while ensuring a wide pool of providers can participate in BEAD. Together, we must engage the National Telecommunications and Information Administration (NTIA) to explore these alternatives and ensure the ‘Equity’ is not lost from the Broadband Equity Access and Deployment program. Let’s be clear: the requirement comes with good intentions. Nobody wants to see billions of dollars of taxpayer’s money handed to providers that default on projects and fail to deliver the broadband so many desperately need. However, there’s a balance to be found to mitigate this risk while honoring the program’s aim to broaden the pool of awardees and fund community-oriented networks.

Calum Cameron is Communications Manager at Connect Humanity.