Senate Commerce Republicans Press NTIA to Strip Rate Regulation, Other BEAD Rules

Senate Communications Subcommittee ranking member John Thune of South Dakota, Commerce Committee ranking member Ted Cruz of Texas and nine other panel Republicans pressed NTIA Thursday to “revise or issue a new” notice of funding opportunity for the $42.5 billion broadband, equity, access and deployment (BEAD) program “to address” a range of GOP concerns. They want the agency to respond by May 4 (see 2304200001). Many of the BEAD NOFO concerns Senate Commerce Republicans raised in its Thursday letter to NTIA Administrator Alan Davidson echoed what they cited during a June hearing (see 2206090072).

“As numerous states and stakeholders have articulated, current BEAD rules divert resources away from bringing broadband service to rural America and are inconsistent with NTIA’s statutory authority in the Infrastructure Investment and Jobs Act,” Thune and the other GOP senators wrote Davidson. NTIA’s “failure to resolve these concerns will prolong the digital divide and put billions of scarce taxpayer dollars at risk.” Thune has been doing his own review since December of all federal connectivity programs’ oversight of funding disbursals independent of Senate Commerce Democrats (see 2212060067). NTIA didn’t comment.

The GOP senators want NTIA to “make it clear that states do not have the authority to regulate rates, and NTIA should refrain from introducing any new rules relating to rate regulation or wholesale access requirements that are inconsistent with its direction from Congress.” They cited current NOFO language that “requires states to ‘ensure that high-quality broadband services are available to all middle-class families in the BEAD-funded network’s service area at reasonable prices.’” The notice also includes “an additional form of rate regulation by giving preference to providers that agree to interconnect with their competitors at wholesale rates,” the lawmakers said.

Thune and other Republicans seek removal of NOFO language that “gives favorable treatment to government-owned networks over private investment,” including a requirement that states “include ‘an explanation for awards to traditional broadband providers when one or more non-traditional providers submitted competing proposals.’” They’re concerned the notice “generally prohibits non-fiber projects from receiving BEAD funding” even though IIJA “permitted all technologies, including wireless service, to be eligible for funding as long as they meet” the law’s “network requirements. Further, under the NOFO’s rules, a state that does not use fiber must submit an overly complex and burdensome waiver request, inconsistent with Congress’ intent.”

The Republicans urged NTIA to “work alongside stakeholders to develop a consistent” process for waiving a requirement for purchasing “broadband products and supplies from American workers and businesses” for “certain components of a broadband network” if an entity meets “a number of strict thresholds.” They want NTIA to excise NOFO labor provisions that went “far beyond” IIJA’s directive to “give priority to eligible broadband providers that have a ‘demonstrated record of and plans to be in compliance with Federal labor and employment laws.’” The senators are also concerned the NOFO “makes several references to and includes a policy that was not included in the IIJA relating to climate change.”

Thune and other Republicans are reinforcing their concerns about the NOFO now so they can “put Davidson on the record” ahead of expected appearances on Capitol Hill in the coming months and in anticipation of NTIA finalizing its BEAD funding numbers for states by the end of June, said an industry lobbyist who follows GOP deliberations. It’s unclear whether Thune or other Republicans will pursue legislation aimed at altering the NOFO if NTIA doesn’t change the language in question.

The matter is likely to come up during a planned Wednesday Senate Appropriations Commerce, Justice and Science Subcommittee hearing on the Commerce Department’s FY 2024 budget request that will include testimony from Commerce Secretary Gina Raimondo, lobbyists said. That panel will begin at 2:30 p.m. in 192 Dirksen. The subcommittee’s members include two Commerce Republicans who signed the letter to Davidson: Shelley Moore Capito of West Virginia and Deb Fischer of Nebraska. Appropriations CJS ranking member Jerry Moran, R-Kan., is also a Commerce member but didn’t sign the letter. Raimondo got some BEAD-related questions during a House Appropriations Committee hearing earlier this week (see 2304180001).

The Wireless ISP Association “wholeheartedly agrees ” with the Republican senators’ concerns that “the BEAD NOFO favors only one approved technology for the States and their subgrantees to access BEAD funds for broadband deployment,” said Vice President-Government Affairs Matt Mandel. “This rigid and inconsistent view of the law will harm the very communities Congress sought to help.” Wireless ISPs “stand ready to help the IIJA and BEAD succeed,” he said: “But BEAD’s narrow technological bias … will sideline many of the most able players that can do the job, ultimately undermining the IIJA’s and BEAD’s success.”