ACLP Files Comments on New York’s BEAD Initial Proposal Volume 2
The ACLP at New York Law School recently filed comments regarding New York’s BEAD Initial Proposal Volume 2. The comments are available here.
The ACLP’s comments focused on the following aspects of NY’s Volume 2:
Project Areas. New York has proposed creating bespoke project areas (PAs) that may be as large as counties. As noted in a recent ACLP analysis of the issue, PAs that are too big could discourage ISPs from pursuing projects in those areas because the costs of serving every location in the PA may be prohibitive. The ACLP’s PA analysis underscored the benefits of establishing PAs that are as small as possible.
Open Access Scoring. New York has proposed assigning 14% of available points in its BEAD scoring rubric to applications that include open access commitments. This is by far the most points that any state will award to open access (the national average is 4%). In addition to noting the uneven track-record of open access networks across the U.S., the ACLP argued that such generous scoring for this specific business model created significant advantages for open access firms, tilting the field in their favor vis-à-vis established ISPs. Accordingly, the ACLP recommended that the state reduce the number of points for open access by at least half.
Affordability Pricing and Scoring. New York has proposed an all-or-nothing affordability scoring approach that commits subgrantees to pricing gig service in BEAD-funded areas at no more than what they charge in non-BEAD areas. The ACLP noted that this approach does not reflect the realities of offering broadband service in rural areas and could leave BEAD-funded networks vulnerable to operating revenue shortfalls if ISPs are unable to charge reasonable prices. To address this issue, the ACLP recommended that the state consider a sliding scale approach that uses the FCC Urban Rate benchmark as a reference price. The ACLP’s comments also notes that, regardless of the approach taken, any effort by the state to set a price for broadband could be considered rate regulation and might be vulnerable to legal challenge.
Subgrantee Eligibility. The state appears to have structured its scoring to entice new entrants, some of which might lack any track-record in the broadband space. However, the state has not offered a more stringent set of vetting criteria for new/untested firms; instead, it has proposed adopting the minimum set of eligibility criteria detailed in NTIA guidance. The ACLP highlighted this dynamic in its comments and urged the state to adopt more rigorous vetting requirements for new/untested subgrantees. In addition, the ACLP recommended repurposing some open access points for use in rewarding applicants with an established track-record in the broadband space, an approach taken by many other states.
Michael Santorelli is the Director of the ACLP. Alex Karras is a Senior Fellow at the ACLP.