Rumored BEAD Caps Are Real

Preliminary awardees are on the clock

Earlier this week, in a special LIVE edition of CBAN's Broadband Action podcast (available on our LinkedIn page), CBAN and guests Doug Adams (Broadband Marketers) and Christopher Mitchell (Institute for Local Self-Reliance) talked about rumors that the NTIA was considering telling states to go back to their preliminary awardees and make them sharpen their pencils if their proposals exceeded a certain cost cap. 

Well, it's happening.

A CBAN (https://broadbandaction.com) member in Iowa received an email just after the close of business yesterday informing them that their project costs have been deemed excessive by NTIA and require immediate corrective action within 72 hours (by Monday, September 22nd at 8:00 am).

The email from the state broadband office explains that NTIA has established three cost tiers based on "cost per passing" (federal funds divided by number of locations served):

  • Tier 1 ($10,000-$17,999): State will provide general justification; applicants may submit additional project-specific justifications

  • Tier 2 ($18,000-$20,699): Applicants must renegotiate costs below $18,000 and submit updated budgets by the deadline, or risk losing their awards

  • Tier 3 ($20,700+): Requires a "best and final offer" submission where all applicants compete regardless of priority classification, with the lowest cost proposal selected

This stems from NTIA's BEAD Restructuring Policy Notice, which reserves the right to reject projects with excessive deployment costs. Applicants can reduce costs by cutting expenses or increasing matching funds. For Tier 3 projects that cannot meet the $18,000 threshold, applicants may provide extraordinary circumstances justifications.

The email explains that failure to respond by the deadline will result in locations being awarded to other applicants. The state submitted its BEAD Final Proposal on September 4th and is now in the federally-mandated Remediation Phase.

What's next is anybody's guess for this particular CBAN member and dozens of others offering to serve very high-cost rural areas with fiber networks. Likely, some of these preliminary awardees will simply walk away, and the people they would have served will be left with satellite or fixed wireless as their only choice.