Arkansas’ $1B Broadband Push Faces Shake-Up After Feds Overhaul Grant Rules

File photo of a technician installing fiber optic cables

Arkansas must reevaluate its more than $1 billion in broadband grants amid a restructuring of the federal Broadband Equity Access and Deployment (BEAD) program.

The National Telecommunications and Information Administration (NTIA) released a sweeping “BEAD Restructuring Policy Notice” on Friday that requires all eligible entities — including the Arkansas State Broadband Office — to abandon what the notice called “burdensome and non-statutory requirements.”

Glen Howie, the state’s director of broadband, told Arkansas Business, “Arkansas is proud of the best-in-class BEAD program our state has developed and executed to date. Our approach has delivered highly efficient, market-driven outcomes that reflect both the needs of Arkansans and the realities of our state’s broadband landscape. We look forward to working with the administration to carefully evaluate the updated guidance, continue to reduce bureaucracy and taxpayer expense, and chart a path forward that ensures full compliance while preserving the integrity, structure, and momentum of our existing, nationally leading program.”

The new policy notice modifies and replaces many requirements outlined in the BEAD Notice of Funding Opportunity (NOFO). Each “Eligible Entity” has 90 days to comply to receive allocated funds.

After three rounds of competitive bidding for the BEAD funding closed on April 23, the Arkansas State Broadband Office (AR Connect) had received nearly 2,700 bids from 44 different providers and preliminarily selected awards for 99% of the state’s eligible locations.

Among the preliminary bids, 880 were selected across 32 providers, representing $585.3 million in total allocated outlay.

Now, AR Connect will have to rescind all preliminary and provisional sub-award selections and notify applicants that a further round of applications will be considered before final awards are made.

Arkansas must submit a letter to NTIA requesting a correction to incorporate the terms of the policy notice into its previously approved initial proposal.

The broadband office must also conduct at least one “Benefit of the Bargain” round and submit a final proposal that reflects the results of that round. The new round requires the office to reopen pre-qualification to all interested applicants, allow existing applicants to modify bids (reduce costs, add locations) and welcome new applicants using any qualifying technology.

An email sent from AR Connect on May 29 stated that Arkansas was originally “well-positioned” to finalize selections and submit its final proposal to NTIA ahead of schedule.

“The Benefit of the Bargain Round must permit all applicants — regardless of technology employed or prior participation in the program — to compete on a level playing field undistorted by the non-statutory regulatory burdens eliminated above,” the notice states.

The eliminated “burdens” include requirements related to labor and workforce development, climate resilience planning, stakeholder engagement with demographic groups and state control over low-cost service pricing.

So instead of Arkansas’ formula-based $36.83 monthly rate for low-cost plans, providers will now propose their own rates.

Some specific eliminations include the preference for weather-resistant buried fiber, DEI requirements and fair labor scoring.

Also under the new requirements, the primary scoring criteria becomes “minimal BEAD Program outlay,” meaning Arkansas must select “the combination of project proposals with the lowest overall cost to the Program.”

This eliminates Arkansas’ previous comprehensive scoring rubric. However, if another project is within 15% of the cheapest proposed project, the office can then evaluate which is better based on speed to deployment, speed of network, technical capabilities and which project was previously a sub-grantee.

Arkansas did already accept applications from all technologies, including fiber, cable, fixed wireless and low-Earth-orbit satellite, which is another new requirement.

“These reforms are necessary,” the document states.

“As always, our priority is to deliver results — not red tape — and to eliminate the digital divide in Arkansas with speed, accountability and transparency,” Howie said in an email to stakeholders.

Arkansas had not yet submitted a final proposal to NTIA, though the office did rescind its approval of all the final proposals that had been submitted by states like Louisiana, Delaware and Nevada.

The new process follows the termination of the $1.44 billion Digital Equity Capacity Grant Program (DECPG), which included $10.1 million in funds already distributed to Arkansas and $7 million set to be distributed across the next two years.