The biggest Internet service providers will dominate a $42.45 billion broadband grant program unless the Biden administration changes a rule requiring grant recipients to obtain a letter of credit from a bank, according to a joint statement from consumer advocacy groups, local government officials, and advocates for small ISPs.
The letter sent today to US government officials argues that “by establishing capital barriers too steep for all but the best-funded ISPs, the LOC [letter-of-credit requirement] shuts out the vast majority of entities the program claims to prioritize: small and community-centered ISPs, minority and women-owned ISPs, nonprofits, and municipalities.”
The rule is part of the Broadband Equity Access and Deployment (BEAD) program that’s being administered by the National Telecommunications and Information Administration (NTIA).
Edit: I missed the part where municipalities in certain states are allowed to get LOCs due to state law, so the grant program would exclude ISPs directly owned by the municipality. To me that is a state issue rather than a fed issue, especially as the NTIA says it will waive the requirement on a case-by-case basis
I’m sorry except for the smallest WISPs (which wouldn’t qualify as broadband anyway), how does requiring a letter of credit from a bank represent a barrier? Carrier grade equipment is not cheap, nobody is paying is paying cash for it. So they should have a good relationship with a community bank anyway.
Go out and try to get one as a small ISP then come back and let us know how it went.
Yeah I also don’t understand how it’s a barrier. Unless I’m thinking of the wrong thing I know some people who had to get a letter of credit when getting some service at their new property in order to not have to pay some equipment deposit. As private individuals (although commercial property with no history of income), it took them a phone call, 2 emails and about 30 minutes to get one.
I really can’t see any small ISP that isn’t some scheme having trouble getting one.
