Broadband Providers Push Back against US Gov LC Requirement

A coalition of internet service providers, broadband associations, and digital equity advocates in the US are challenging a requirement that applicants for federal broadband funding must furnish a letter of credit in order to receive funds.

The National Telecommunications and Information Administration (NTIA), a part of the US Department of Commerce, oversees the Broadband Equity, Access, and Deployment (BEAD) program which provides USD 42.45 billion for expansion of high-speed internet access to US communities and other entities lacking such service.

The program requires grant recipients to provide an LC for 25% of the award, with a 25% match requirement. Opponents of this requirement argue that it favors large, well-established internet service providers, while disadvantaging smaller providers and minority-owned businesses for whom the program is intended.

More than 50 internet providers, digital equity advocates, and industry associations jointly signed a letter sent to NTIA in August 2023 which they proposed alternatives to the LC requirement such as performance bonds or delayed reimbursements to “ensure proposals are viable and that applicants have the capacity to perform.”