An Interview With Brooke Coleman - BEAD Preparedness

[00:00:10] Speaker A: Welcome to closing the digital divide on our new platform, AGL information and technology. So we're excited to be here, but I am even more excited to have my friend Brooke back with me today. Brooke, how are you? [00:00:25] Speaker B: I'm doing well. Thanks for having me, Charles. [00:00:27] Speaker A: Certainly. So, Brooke, it's been a while since we've chatted. What's been going on in your world? Before we get started here, tell us a little bit about what you've been up to. [00:00:37] Speaker B: Sure. Well, I think last time I was here, I'm working for Nokia, and I've been with them for about a year and a half now. So it's been a lot of learning, but it's been really great. I got assigned the territory of Tennessee, which is where I live. So I'm very grateful to be here in my home state and service the customers that are, that are here in Tennessee. I get the opportunity to drive out into the mountains and see these rural operators and mountains and see some beautiful areas of the state and have really gotten a lot more comfortable in my role. I'm an account manager, so, basically sales for existing customers as well as new customers. But I'm happy to be here in my home state and keep learning about Nokia and all the different products and services that we can help provide rural America. [00:01:26] Speaker A: Well, so, wait a minute. You get to stay home. It's almost like a vacation because you're traveling to all these beautiful places. I mean, what more can you ask for there? [00:01:37] Speaker B: And I tell people, too, my job is to bring donuts and ask questions. So, I mean, in the mornings, I bring people donuts, and then in the evenings, we go out and have steak dinners. So I've gained probably 20 pounds. But, you know, it's worth it. I'll make that sacrifice. [00:01:53] Speaker A: Well, it sounds. It sounds like you're having a lot of fun there. I'm very happy for you. Thank you, Brooke. We're getting close to execution. I'll call it for beat. Most of the states have their volume two completed. Many of them are in their challenge process and rebuttal process, but we're kind of getting ready to move on to that next stage. And I know you are. You're definitely in tune to what's going on in your role that you have. What are kind of the next steps that ISP's should be thinking about or should be executing at this time? [00:02:34] Speaker B: Yeah. Well, so since volume two s are approved, next step is the application. Some states do have a pre application process that if you want to actually apply to bedev you have to be pre qualified. So be sure you're keeping an eye out for those states and those pre qualification processes. Some states, it's a simple form that you fill out and you say, hey, I'm interested. You basically raise your hand and say, hey, I want to apply other states. It's a little bit more involved and you have to submit, you know, financial information, documentation about your company, your organizational status, just a little bit more about your company to make sure that you're a qualified company before you go into the application process, which you know has its pros and cons. That way you get cleared to be an official applicant before having to go through the application process. But then you also have to supply all this data and information to the state beforehand. So that's one thing is checking for the pre application process for your state, what that is, and get that done before the deadline, because if you aren't pre qualified, then you can't apply. The second thing I would suggest is engineering. Looking at the maps that are probably in process of being finalized with the state and with the NTIA, they have to officially, the NTIA has to officially finalize the state map and kind of give their blessing. But looking at those maps and figuring out where do I want to build? What do I want to build, how am I going to make this happen? And getting those high level engineer plans and designs done now is critical because we all know they take time and we all know they take an investment, but they are critical in order to have a good plan to submit for the application. [00:04:26] Speaker A: Let's talk about the application process a little bit. If I'm an ISP and I fill out the application and I'm assuming there's an approval process in the applications, if I'm not approved in my initial application, is there an opportunity to maybe challenge that approval or what's that process like? [00:04:52] Speaker B: Yeah, usually there is back and forth, you know, between the applicant and the state and what that's called as an RFI or a request for information. So the state may have a request for additional information from the applicant and they'll send you an email and say, hey, I have maybe a question about this piece of your application, or maybe you're missing a document here. Do you have that? Can you send it? And it's just, it's an email or a phone call, you know, back and forth sharing of information. So there is a process where you can provide the additional information that may be missing in your initial application. But I will make the caveat. There's usually a deadline with that process because the states are held on the timeline, so they're going to hold the applicant on the timeline. So, you know, every state is different from what this timeline is. Sometimes it, you know, three business days, sometimes it's seven business days or, you know, a week. But there will be time constraints around when you are responding to those questions to the state. [00:05:56] Speaker A: So we've, there's been a lot of conversation around mapping the map or the number of maps and challenges to the map and what is the right map. And the NTIA has their map and the states have their map and the. [00:06:15] Speaker B: FCC has their map. [00:06:16] Speaker A: Yeah, FCC has their map. ISP's have their map. How is all of that going to kind of come together where there's a single path forward to say, and I love what you just said there, what is the truth as an ISP? You know, we've been in the business for a little while. We know that some guys may tend to exaggerate their coverage area. And so how do we, how do we get to the truth there? [00:06:59] Speaker B: Yeah. So to be honest, it's business. Will we ever get to the truth? I not totally sold that we will, but I do believe that they're trying to do their best. So how we get to that is this, that is the purpose of the whole challenge process, is to get to the truth and to get to that one source of truth map. And so what will happen, and is starting to happen in some states is they will have a finalized map for the state that is approved by the NTIA. Once the, the rebuttals and everything finishes out with the challenge process, that is the ultimate and that will be the ultimate source of these are the eligible locations that you can apply for. Bede, you know, whether or not those are truly unserved or underserved, it still may be up to debate, but at some point in time they're going to put their foot down and say, no, this is the official map. These are the beat eligible locations. These are not the beat eligible locations. You submit an application for these eligible locations and that's that. And that will be coming here very soon for some states. I know Tennessee very well, obviously, because I live here and this is my territory. They have a map of areas that are project area units that if you are applying to bed, you're going to apply to this sort of chunk of, of areas of eligible locations. We don't know what those specific eligible location BSL locations are yet because the NTIA has to approve those final locations and so right now the map is with the NTIA and NTIA has to give it their final approval. Then we will get those individual dots of those beat eligible locations. And so in the same story is across, across the board and all the other states as well. [00:08:47] Speaker A: So I'm an ISP and I'm speaking for all the ISP's out there, right? Yeah, not really. I've submitted my application. I've been approved for my application. I know the area that I want to serve under be there's a proposal process or a submittal that has to be done. There's also a PE certification that has to be done. Can you walk us through that a little bit, what that may look like? [00:09:25] Speaker B: Yeah. So different states call it different things, but it's, you know, it's the grant application. There are some states that are going to call it an RFP, a request for proposal. There are some states that are going to call it a grant application. The word doesn't matter. It's going to be the same sort of process of you're going to have to submit your design, where you want to build, how you're going to build, which areas you're going to build after, how much that's going to cost. It's a grant. So you're going to be picking your own budget. You're going to say, it's going to cost me x, Y and Z dollars in order to build to all of these locations. And you're going to have to submit financial information about your company as well as a performa kind of projecting what your financials will be shall you win this project. You're going to have to have the PE certify that design that you come up with. And you also have to submit a timeline that says, I'm going to build this project within x number of years or x number of months, whatever that timeline is. And the PE also has to certify that that is a realistic timeline in order for you to get that project done because a lot of states are connecting their scoring criteria with how quickly you can build this project. So if you're saying you're going to build it in two years, then you get additional points on your application, but anyone can say, hey, yeah, I can build that in two years, no problem. But the PE certification is what kind of holds them to that? Making sure that it's realistic. [00:10:57] Speaker A: So we've had a number of programs that people have certified, oh yeah, we can do this for X amount of dollars and in X amount of time. You know, we're going through that with, with odd off right now, what kind of parameters has NTIA put in place to help curtail, you know, failure? Making this. I mean, we all want this to be a success, right? What parameters do they have in place to, as, as best we can make sure that this program is successful? [00:11:38] Speaker B: Well, so they've designed it so that it's a reimbursement program. So again, I know I'm a broken record, but each state has a little nuance to that. But the applicant or the awardee, the Internet service provider who wins the grant will not get a dime unless they spend money. So they have to have sort of initial investment. There's also the matching funds, which is a whole other topic. But as far as you know, they have to show that they are purchasing things for the grant and that they are making progress on their builds. So an example, some states will give you 10% of your grant fund up front to help you get started. Those, in my opinion, those states are very, very generous and they'll give you a little bit of money to kind of kick start. And then you get the 20% of your funding once you've passed 20% of your eligible locations. Then you get 30% of your funding once you've passed 30% of your eligible locations. So you have to show physical build progress in order to get money into order to get your money back that you're spending. Other states are straight up a reimbursement program. So you spend money on buying your Nokia electronics and then you get reimbursed 30 days later from the state for making that purchase. So it's a direct, you can't, you're buying things for the build and then you're getting reimbursed later. And then the other component that they put in there is the monitoring. And state broadband offices are going to be constantly monitoring your progress. You'll have to submit quarterly or monthly, maybe every six months kind of reports to the state talking about your progress. What's happening with your build. You'll have to be showing speed tests for the locations that you are serving. You'll have to be providing a lot of data to the states that to show and demonstrate that you are actually building these networks that you promised to build. There are states like Tennessee is one of them, that they will go on site and they will look to go see and make sure that there is fiber where you said there is fiber or whatever the technology may be. They are going to physically go out to your build and make sure things are happening so I do believe it is going to be different than Rdoff just because of the way that they structured the flow of the money. [00:14:02] Speaker A: So let's talk a little bit more about the money part of it, because that's very integral and important part for ISP. So there's the reimbursable part, there's matching funds, there's either the performance bond or letter of credit. So walk us through that process a little bit. [00:14:25] Speaker B: Yeah, so I mean, those are all the different pieces and components and parts that are going to, they're just a fact of the program that you just need to have a financial plan for. You know, whether it's, you know, maybe your matching funds are straight up cash if you have that luxury, or maybe you're using in kind matching funds and leveraging your resources a little bit or your partnerships in order to come up with that matching fund. It does not have to be 25% cash, you know, of your, of your grant application. Some states also do require you to use that matching fund first before you're allowed to dip into the actual, actual grant funds. So this is just, there are a lot of different financial requirements, which is why when you submit an application, they want to see your audited financials. They want to see a pro forma to show that you have business sense and can plan for long term financial success because they don't want these projects to build these networks and then not be able to sustain them long term. So not sure if that really answered your question, but no, absolutely. [00:15:38] Speaker A: Absolutely. So I guess it's really real important for ISP's to really be in touch with their state broadband rules as they walk through this part or even before they get in. [00:15:49] Speaker B: Absolutely. I feel like I've been saying that for about two years, that if you don't know your state broadband office, you need to know them. So, yes, absolutely. [00:15:59] Speaker A: So I'm going to play the ISP role again, and I've gone through the whole process. We know that the challenges of smaller to midsize ISP's can be a little more exhausting than larger ISP's or even ISP's that have, that are in urban or ex urban areas where the population is a little bit heavier. Man, I'm working hard through this whole process. We're getting some things done, but we're not quite there. We're not keeping on schedule. What penalties do we need to be concerned about as we're going through this bill process? [00:16:49] Speaker B: So from my perspective, I've had a lot of conversations with state broadband offices. And they want to help, especially these small rural providers. They understand that you have limited staff, that you have limited funds and that you are working your tail off. You know, once you build that relationship with the state broadband office, they get it and they know and as long as you're in constant communication with them, that's the other reason for the reporting is it is to inform the state broadband office of your progress. But it's not to get you in trouble. It's to see where you're at, to see, you know, how can they help? How can the state broadband office help you push things along? Yes, everyone has timelines and deadlines, but they aren't the enemy. They are your friend and they are there to help and support these small rural providers because they want them to participate in the bead program and they want them to help the communities because they live in the state, they live in these communities and they want to see them grow and serve all of these locations. So that's just, I think my opinion, in the Ntiab NoFO, there are some parameters around, you know, if you are not meeting, build milestones and things like that, the consequences are they could, you know, take funds back. If you don't build the network in the timeframe that you stated that you would, they can roll back those funds and they can ask for their money back. But likely, and I'm hopeful that, you know, as long as everyone is communicative and honest about what's happening, then, you know, they'll just get an extension. You can request, you know, a six month extension if your project needs a little bit more time. And hopefully the state broadband office is amenable and will accommodate that. But that's what the reporting is for, the relationship with the state broadband office. But you are getting government funding at the end of the day. So there are going to be consequences if you don't fulfill the requirements. [00:18:48] Speaker A: So as a sub grantee then are ISP's really partnering with the state and federal? Is this is a, through the state, a partnership with the federal government. [00:19:05] Speaker B: So the program starts at the federal level and then it goes down to the state. And every state has sort of designed their own, their own program and the states have the funds in order to distribute down to the sub grantee or the Internet service provider. So I would say, you know, it's, it's just semantics. But I think, you know, the Internet service provider, you're, I feel like you're partnering with the state because they are your advocate to the NTIA and they are the one who you are working directly with, with receiving your reimbursements. You're going to get your reimbursements from the state, not from the NTIA, not from the federal government. It's coming from the state and you're going to be sending all your reporting data to the state and you're doing all of these things also because then the state has to turn around and do all of that reporting to the NTIA. So, and that's another reason for all the timelines and the deadlines because the state is going to be held accountable for doing this work. And so the state then has to report up to the federal level. So it's all sort of interconnected and just understanding there's all of these deadlines and reports and timelines that will have to be met at all stages from all parties. [00:20:16] Speaker A: Well, you know, Brooke, we're almost out of time, but I got two more areas I want to touch on real quick. There's been in going to dip my toes into the political arena, just my little toe. There's been a lot of talk around and you've heard a lot of noise that people are talking and holding hearings and things on Capitol Hill about this process is not moving fast enough. I read an article just the other day where I someone said it's a failure and it really hasn't get started. What's your response to that? [00:20:54] Speaker B: I think folks are comparing the Bead program to other programs, specifically capital projects fund, which was 10 billion to get, you know, coronavirus relief funds out to get broadband to folks quickly. And it's not fair to compare the two programs because they're two different agencies and they have two different purposes. The capital Projects fund money did go out much faster, that is true, but there was a whole lot less regulation around it. There was a whole lot less requirements. And it was here we need to get broadband out to folks as fast as possible because we are in a crisis and people need to work from home, kids need to do school from home. Like we need to get Internet out as fast as possible. And that was the mission of that program. Beat is different and I think folks need to take, give it a little bit more grace because there are a lot more requirements and, you know, things around it like Baba NEPA, all of the acronyms of the compliance components. There's a lot more depth to the BEaD program as far as that goes. But additionally, and probably more importantly, it is to serve the hardest areas of our country. It is the unserved and underserved locations that have been neglected forever. So we are trying with the BEaD program to serve the hardest served locations and provide Internet to everyone. That's a different program, that's a different mission than the other programs that it's being compared to. So because of that, yes, I agree, the BEaD program has taken longer than everyone has expected, and that is disappointing. But you have to understand the reasonings for it is we are trying to do the impossible. We're trying to provide Internet in acts, high speed access to every single resident in the country. It is not, you know, an easy task. And additionally, like we've talked about, we want the money to go towards the projects. We don't want the money to be wasted like it was in these other projects. So because of that, they've designed the program differently in order to ensure that it has success. So when you do that and you have all of the government regulations and red tape, it's going to take longer. [00:23:08] Speaker A: And there's really two large entities involved with this. You have federal government and you have the state, and they both have regulations and requirements and parameters around this to help ensure its success. All right, one last thing. I want to talk. And by the way, we could literally spend a couple hours on compliance. Right? I didn't even have that as part of my notes because I knew that would take too long. Yeah, I do want to talk a little bit, though, about the, and I'll call it the broadband toolbox. You know, every state, it was given a specific allocation of funding based on their needs. What's your opinion, or how do you look at how states can, can really utilize all of the tools in the toolbox to make sure that everyone gets connected. We all know that Bead is a fiber focused program. And let's be honest, a wired to wired fiber connection to a home is going to give you the best performance. That's no longer an argument. Right? Regardless of what some of my friends on the fixed wireless side say, it's really not an argument. But we know that not every household, there's not enough funding to get every household connected. I had been advocating for a while now. Hey, we need to use all the tools in the toolbox if we're going to connect everyone. What's the, how do you, how do you view that, that argument? I guess not really an argument, but a statement. How do you view this? [00:24:52] Speaker B: Yeah, no, I think it. I think it. I have a broken record. I am sorry, but it depends on the state. There's some states that are going to have more than enough money to provide fiber to all, and then they're going to be able to provide it to the community anchor institutions and then spend it on other things, which is great. But there are other states, like you mentioned, that do not have enough funding and it will not be physically possible to provide fiber to all those locations. And I think the states know that the states are recognizing, and they, you know, now that the maps are getting closer to final, we're getting closer to understanding of money and understanding of the industry and how much it costs to build these networks. So states where they don't have enough funding, they recognize it. They have stated it in their initial proposal, volume two. I've read through way too many of them, and it literally will say, we don't have enough money to provide fiber to everyone. So some states are going to prioritize their unserved locations to make sure those that are unserved get served first. Some states are going to take a hybrid approach to it. And I also encourage you to look at the application process for each of the states, because some states will have multiple application rounds where the first round will be for fiber projects only and the second round will be for other technology proposals, and then maybe a third round to get any sort of final locations. And then the other variable that you have to think about is how are they defining their, how can you apply? There's a project area unit. So some states are clumping all of their eligible locations together and saying you have to apply for this chunk, and then you have to serve all of those locations within that chunk. Other states are saying you can just apply for individual broadband serviceable locations and you tell us what the project area should be. Some states are saying you have to build to the whole county. In situations where you have to build to the whole county, it may not make financial sense for you to build fiber everywhere. Maybe you build fiber in some spaces and then wireless or, you know, another solution in the other parts. And I feel like at this point, another benefit actually for this program taking so long is the state broadband offices have become very well educated on the technologies and the options that are out there and the reasons for us not being able to provide fiber to every single location. So I think that they are open, at least most states are open to having, you know, maybe a hybrid type approach where you provide fiber where you can, where it makes sense, where it doesn't seem, you know, too expensive, and then you have another solution for those maybe high cost areas, and then that's another piece we didn't even touch about yet is the. The high cost area, how they come up with that number, what that number is going to be. So I'll just keep it high level and say that most states are going to determine that high cost threshold after they have received all of their applications, and that's when they'll set that number. [00:27:53] Speaker A: So there's a reason why we didn't touch on those because I got to get you on the hook to come back for another session. [00:27:59] Speaker B: There we go. Before we get started, I see how. [00:28:02] Speaker A: You did that, Brooke. Every time I talk to you and listen to you speak, I get smarter. And I know our audience gets smarter. I feel like I'm sitting in a college classroom right now. Professor is speaking. I want to thank you so much for taking time out of your busy schedule. I know you got little ones running around and you're getting ready for the weekend and all of this fun stuff, being the awesome person that you are. So thank you very much for taking time out. No problem. [00:28:36] Speaker B: It's a joy. You're welcome. [00:28:37] Speaker A: Help everybody get ready for feed. And we all want this to be a great success. So until we talk again, thank you very much and take care. [00:28:49] Speaker B: Thank you. Bye.