Unpacking Approved BEAD Volume 2s: Texas

NTIA recently approved the Initial Proposal Volume 2 for the state of Texas. We compared the final version with the version submitted by the state to NTIA for review last year. A redlined comparison is available here. The following changes were evident:

Subgrantee Selection Process

Project Areas

In response to NTIA pushback to Texas’s original proposal to let applicants define their own PAs at the BSL-level, the state will now “allow BEAD applicants to design project areas using census tracts as the minimum size building block.”

Shifting to this approach also allows the state to adopt a contiguity requirement: “Requiring contiguity for tract-level projects will help keep projects at manageable sizes, provide a manageable range of eligible locations that must be served by each project, and limit the number of overlaps between projects, thus reducing the complexity of deconfliction.”

In addition, the state “will require applicants to submit severability matrices with their Round 1 applications, which will detail subproject areas they would be willing to accept on an independent basis if the BDO cannot award the entire application.”

Texas Match Assistance Program

After receiving voter approval of a constitutional amendment to create a $1.5B Broadband Infrastructure Fund, the state will “provide match assistance to all BEAD applicants who request state matching funds on a dollar-for-dollar basis up to a maximum of 12.5 percent of the total project costs for each individual project. The purpose of the TMAP is to assist BEAD applicants with the federal match requirement. Applicants will not be permitted to request nor receive funding from the TMAP for projects in “high-cost areas” designated by NTIA or for other projects for which NTIA has wholly waived the non-federal match requirement.”

Scoring – Minimal BEAD Outlay

The state has changed how it will score this category. Notably, it will now use a reference price as part of its formula for computing points. Per the approved V2: “Before the application period begins, the BDO will set a reference price for each Project Area Unit (PAU). The BDO expects the reference price will be informed by a variety of factors (e.g., total BEAD allocation for Texas, cost estimates such as the CostQuest Associates (CQA) cost models as provided by NTIA’s Eligible Entity Toolkit, and data from previous broadband funding opportunities).”

Scoring – Affordability

The state has adopted a $95/month price-point for 1/1 Gbps service as its affordable service benchmark. Points will be awarded relative to the prices for this offering proposed by applicants.

Scoring – Fair Labor Practices

The state increased the number of points available in this category from 24 to 34. Allocation of points remains all-or-nothing and depends on the robustness of the documentation provided by applicants.

Secondary Criteria

The state made several adjustments to these requirements, including:

• Addition of two new categories in response to a new state law: (1) Broadband Data Submission, 1pt available to ISPs who have an enforceable deployment commitment (e.g., an RDOF project) and have submitted requested data to the Comptroller (ISPs without enforceable commitments will receive 1pt); (2) Performance on Enforceable Commitments, 2pts available if ISP has never defaulted on an enforceable commitment (zero points if they have).
• Removed the Project Readiness-Engineering Designs, Diagrams and Maps category
• Speed to Deployment – points are now available for timelines that are longer than two years and shorter than 3.5 years.
• Addition of Unique PAUs category worth 20pts. Per the approved V2: “Eligible applicants that submit projects containing at least one unique PAU within their footprint that are not covered by any other projects of the same prioritization tier (Priority or Non-Priority) [will] be afforded additional weight as the BDO seeks to provide universal service to all unserved locations.”

Scoring & Selection

The approved V2 provides significantly more detailed information about how the state will score and deconflict applications, including a thorough discussion of its use of candidate pools and how it will address instances where no proposals have been received for certain PAUs.

Low-Cost Option

The state clarified that, “In the event that the ACP sunsets and has no successor, the cost will be the same for Tribal and non-Tribal lands.”

The state also included an extended discussion of its decision not to lower the low-cost option price-point or otherwise account for the expiration of ACP. Per the state, “Adding more aggressive affordability provisions in the current BEAD proposal that is already compliant with the affordability components may also jeopardize the BEAD program’s chief objective: achieving universal 100/20 broadband access… Altering the low-cost service option would undermine customer revenues and compromise potential BEAD subgrantees’ ability to earn adequate returns on investment from BEAD projects or perhaps even to sustain them commercially at all.”