Unpacking Approved BEAD Volume 2s: South Carolina

NTIA recently approved South Carolina’s Initial Proposal Volume 2. After reviewing and comparing the final version of South Carolina’s BEAD Volume 2 with the last cured version it released in August, the ACLP found that the versions are identical. Following is a summary of the ACLP’s prior analyses comparing previous iterations of the state’s V2. The most notable recent change was the state’s reluctant embrace of a low-cost option price.

Analysis of SC’s August V2 vs. July V2

The only major change evident when comparing this draft with the cured draft released by the state in July is located in the Low-Cost Option section. The state has given in to NTIA demands and has set a price for the low-cost option. This leaves Florida as the only state that has yet to set a price for the option. To date, at least four other states - GA, MO, MT, and VA - have also given in and set a price for the low-cost option.

In its latest cured V2, South Carolina notes that “Without the establishment of an approved low-cost broadband service option, the NTIA will not open to the State of South Carolina its additional allocation of $546,535,983.05 in BEAD funds. Accordingly, the SC Broadband Office (SCBBO) establishes the low-cost broadband service option below only to avail the State of its additional $546,535,983.05 in allocated BEAD funds and, the SCBBO is not claiming the right, nor making an attempt, to rate regulate.”

In terms of the Low-Cost Option parameters, subgrantees satisfy the low-cost option requirement if they price the offering anywhere in the $30-$75/month range. The state notes that “in making awards pursuant to BEAD, the Internet Service Provider is not evaluated on the individual components of its low-cost plan, but only whether it offers a qualifying low-cost plan.”

Analysis of SC’s June V2 vs. April V2

Subgrantee Selection Process

Scoring - Fair Labor Practices

The state reduced from 10 to 6 the number of elements in a workforce plan for which an applicant can receive points if they are included in their application. The elements that the state eliminated from its rubric include (1) evidence that the entity offers opportunities for workers to participate in programs like a 401(k) matching program, etc.; (2) working with local technical colleges, local universities, and HBCUs to hire recent graduates; (3) participation in local job fairs; and (4) posting open positions on the SCDEW website.

Project Areas

The state made a small but important change in this part of the subgrantee selection process. Initially, the state said that it will require applicants to accept all unserved and underserved BSLs in the PA. In the latest cured V2, the state says that it will only “encourage” applicants to do so.

Fiber Priority

Throughout this section, and in particular in the Extremely High-Cost threshold section, the state makes clear its preference for funding as much FTTH as possible, especially in the first round, during which it will do everything it can to avoid funding non-fiber projects.

Implementation Activities

The state clarifies that it will use $7M of its BEAD allocation to support state apprenticeship programs, $20M in Virtual Primary Care, and some remaining funds in an MDU grant program.

Middle-Mile

The state removed mention of potentially using BEAD funds to support middle-mile enhancement via Santee Cooper. However, the state provided additional information about its other middle-mile initiative, the Rural Resource Networks, which was teed up in previous drafts:

“Through a non-deployment investment in the Rural Resource Networks (RRNs) Grant Program, the SCBBO will provide the essential intrastate middle-mile foundation to improve regional internet performance, resolve cellular problem areas, and enhance statewide telecommunications resilience. The SCBBO will work to identify and prioritize existing buried fiber network segments which may be enhanced to ring or mesh topology with the addition of network segments that may be installed to close loops or improve speed or resilience.

“The future of the internet will require network interconnection, datacenter services, cloud on-ramps, and content to be located closer to end-users. Technologies like Artificial Intelligence (AI), quantum computing, precision agriculture, Internet of Things (IoT), and 5G have the potential to transform healthcare, agriculture, manufacturing, and education in South Carolina; however, each of these systems require high performance (100Gb+ symmetric capability), low-latency (<10ms) fiber backbones to function.

“The SCBBO has allocated an initial tranche of $203,505,264 BEAD funding to support this initiative. In addition, while not required for non-deployment funds, the SCBBO would like to achieve a 25% match rate for this program and has set forth an estimate of $67,835,088 in the IPFR budget to account for the match. RRN grants will be awarded through a competitive grant process that is described in the Initial Proposal.”

Low-Cost Broadband Service Option

In its previous cured V2, the state included verbiage that pushed back on NTIA’s model plan and made clear that it would not set a price for the option. The updated cured V2 retains the state’s overall approach to the low-cost option - i.e., it will let applicants set their own price for the option - but it has removed the verbiage about how “requiring ISPs to commit to a fixed price for broadband service for an undisclosed amount of time is not reasonable and will likely result in a hardship for local providers throughout the state….” It also increased the amount of time that the option must be offered by subgrantees from 3 years to 10 years.