Senate Commerce Republicans Attack NTIA BEAD Requirements

Wicker and Communications ranking member John Thune of South Dakota led the GOP criticism of NTIA’s connectivity money plans, which in part focused on the agency’s recent notice of funding opportunity (NOFO) for the $42.5 billion broadband equity, access and deployment (BEAD) program (see 2205130054). Wicker and Thune cited NOFO language Republicans view as a back door to state-level broadband rate regulation. The NOFO “disregards Congress’ intent” in IIJA by “heavily” leaning “into regulating broadband rates,” in part by requiring participating states to “include a middle-class affordability plan to ensure that all consumers have access to affordable high-speed internet,” Thune said. He suggested “these types of price controls” are a form of “de facto rate regulation” that flouts IIJA’s “statutory prohibition on rate regulation.”

“Nowhere in [the NOFO] do we set a price for broadband and we believe we are consistent with the spirit and letter of the statute in that regard,” Davidson told Thune. “We believe that affordability is a critical component of what we’re trying to achieve” via the IIJA broadband money, Davidson said. “The statute tells us that it is, and we know that affordability is not a luxury, it is a necessity.” NTIA has “looked at different ways to make sure that we’re promoting affordability while still giving states the flexibility to approach it in the ways that are appropriate for their state,” he said.

“I’m encouraged” by language in the NOFO “requiring states to use the FCC’s updated broadband maps for determining unserved and underserved locations and encouraging states to streamline their permitting process for accessing poles and right of way, a major problem in the past,” Wicker said. “I am concerned by other provisions which I fear could undermine the program’s success,” including a lack of clarity on “whether it will wait for the FCC to resolve challenges to its maps before allocating funds to the states.” NTIA “fails to take a technology-neutral approach to deployment” and “prioritizes government-run networks, as well as other non-traditional providers, that lack a record of successful deployments,” he said.

Net Neutrality, Labor

Thune decried NOFO language requiring states to ensure that prospective BEAD subgrantees don't impose unjust or unreasonable network management practices, something they see as a potential back door for net neutrality regulation. “Net neutrality requirements were not included in” IIJA, Thune said. He specifically raised concerns about the issue as a reason he wasn’t supporting Davidson’s confirmation (see 2112140074). Thune pressed Davidson to make clear to states they’re “not authorized to impose net neutrality requirements on subgrantees as a condition of a BEAD award.”

“We do not believe” the NOFO language constitutes “a net neutrality requirement,” Davidson said. “We do believe that consumers should have control over the broadband that they pay for,” but “there are other agencies and organizations … that are the right place to approach the net neutrality issue,” including the FCC and Congress. “There are several reasons we included” prohibition “but we know that neutrality is a much broader concept than that.”

Thune and other Republicans slammed labor-focused language in the NOFO, including reporting requirements on BEAD subgrantees they see as disadvantaging rural right-to-work states. “If NTIA keeps this requirement, the overall cost of deploying broadband services is going to increase, resulting in fewer individuals being connected,” Thune said. “We’re concerned about how you all are going to preference” projects based on use of a unionized workforce, said Sen. Marsha Blackburn, R-Tenn. “I’m going to be very watchful. Our state is a right-to-work state” and “it appears that what you are doing is putting in place the ability to preference union states and to disregard and not give any kind of priority to states that are right-to-work states.”

“These are not requirements for states,” Davidson told Blackburn. “There are reporting requirements for states, but they’re not requirements for states.” NTIA does “take these labor issues very seriously” and “what we’ve done here is not a requirement that we think goes against a state law,” he said. “We expect that we are going to be creating tens of thousands of jobs and we do want to make sure that the workers on the front lines of building these networks have safe and good-paying jobs,” Davidson earlier told Thune. “This is not intended as a bar” on non-union states. “We’re open to conversation and willing to continue to discuss it,” but “we don’t think it precludes providers in” South Dakota and other non-union states “from participating in” BEAD, Davidson said.

Lujan strongly rejected Republicans’ criticisms of the NTIA plans. “Ensuring low-cost options actually are low cost is not rate regulation,” he said. “I hope that everyone embraces this” and recognizes it “was built into a piece of legislation that received overwhelming” bipartisan support in Congress. “This issue’s been addressed,” Lujan said. “I certainly hope that we can see that, because without that, there’s going to be a lot of people left that don’t have connectivity” once the IIJA-funded projects are built.

Lujan also assailed criticisms of labor-focused BEAD reporting requirements. “Research shows that prevailing wage laws boost worker productivity,” he said. “When we talk about a prevailing wage, that’s how much someone makes an hour. They should have a good wage with a good job. That’s what this bill promised to help foster.” Adopting “a prevailing wage standard” will “bolster the broadband workforce, an area of significant need across the nation but especially in rural states,” Lujan said. “I’m hopeful that by having that strong prevailing wage in states that are hard to connect or we don’t have that workforce established, this will establish it.”

Senate Indian Affairs Committee Chairman Brian Schatz, D-Hawaii, raised concerns about NTIA’s handling of tribal entities in broadband money rollout. Schatz focused on NTIA’s yearlong delay in distributing $90 million from the Tribal Connectivity Program created in the FY 2021 appropriations package to the Department of Hawaiian Home Lands. “I am concerned NTIA has no experience dealing with native Hawaiians [who] are not a federally recognized tribe,” Schatz said. “This’ll get me a little hot."

Maps, Spectrum

There was again bipartisan interest in criticizing the FCC’s broadband coverage maps, with Senate Commerce members focusing on whether the commission’s delay in releasing updated data will impact NTIA’s timeline for distributing the broadband money due to a requirement that some IIJA money remain unavailable until the FCC releases the maps. The FCC currently estimates it will have first drafts of the maps by November(see 2205120061).

Commerce Chair Maria Cantwell , D-Wash., asked Davidson how the updated maps will “help us” have a better understanding of “who does not have connectivity,” including differentiating between unserved and underserved areas. “The maps in the past have not been good because they’ve not been granular enough,” but Congress’ mapping requirements in IIJA will ensure the updated maps “will be much more granular at the location level” and “will give us much better insight,” Davidson said.

“What bothers me is we don’t have the maps, and the things you are using to make decisions are not necessarily accurate,” said Sen. Jerry Moran, R-Kan. "The maps are essential” and “are the biggest thing slowing us down,” Davidson said. “We have to get the maps right.” He later told Sen. Dan Sullivan, R-Alaska, he’s aware of state and local governments that want to have the option to challenge the FCC’s draft maps “and we’re committed to that."

Cantwell and Sen. Ted Cruz, R-Texas, were among a few Commerce members who talked about spectrum matters. Cantwell questioned how NTIA will be able to “play a more leadership role in sorting out” various “agencies within the administration who have different views … on spectrum” matters. Davidson’s “cautiously optimistic” about his “close working relationship” with FCC Chairwoman Jessica Rosenworcel following their February spectrum coordination agreement and a joint task force’s formal start of work aimed at updating the 2003 memorandum of understanding between the two agencies (see 2203300043).

Cruz cited “language floating around on Capitol Hill right now that some senators want to see included” in the FY 2023 National Defense Authorization Act that “would allow DOD to bypass NTIA in its role in ensuring that all federal agency stakeholders’ needs are considered,” which “in turn could create significant conflicts in terms of overall allocation.” DOD appears to “be trying to go around the well-established practices for spectrum allocation and management for federal users,” Cruz said.

NTIA “would have concerns” about such language and has communicated them to the Senate Armed Services Committee, Davidson said. “This only works if we’re all well-coordinated and our role by statute” is in part to “be the manager of federal spectrum resources.” NTIA respects “our colleagues in this space,” including “a good working relationship of late” with DOD, but “I do think we need to make sure we’re all coordinated and that agencies aren’t given incentive to go off on their own and make these kinds of decisions unilaterally,” he said.