FBA, Cartesian release BEAD Threshold Financial Model

The Fiber Broadband Association and Cartesian launched a BEAD Threshold Financial Model to help states calculate their extremely high cost per location threshold for fiber deployments. #pressrelease

August 21, 2023

3 Min Read

ORLANDO, Fla. – Today at Fiber Connect 2023, the Fiber Broadband Association (FBA) and Cartesian unveiled their BEAD Threshold Financial Model that helps states calculate their Extremely High Cost Per Location Threshold (EHCT) for fiber broadband deployments using Broadband Equity, Access, and Deployment (BEAD) funding from the Infrastructure Investment and Jobs Act. The sophisticated tool leverages geospatial analysis to build a financial model that states can use to develop their own cost thresholds for fiber deployments. The BEAD Threshold Financial Model is FBA’s latest resource that will help state broadband offices and others within the fiber broadband ecosystem connect every community to high-quality broadband and close the digital equity gap.

The BEAD Notice of Funding Opportunity (NOFO) directed states to expend program funds for all-fiber deployments except in the highest-cost areas, where alternative broadband technologies can be used instead. The National Telecommunications and Information Administration (NTIA) developed EHCTs to determine at what point—or threshold—states would find the cost to deploy fiber unreasonably high and therefore be allowed to use other technologies. However, no single threshold will universally meet program goals for every state because funding allocations are different for each state and the economics of deploying broadband technologies vary greatly among jurisdictions.

FBA and Cartesian partnered to create the BEAD Threshold Financial Model to give states a credible methodology for arriving at a reasonable, tailored threshold. The goal is to set a threshold high enough to maximize fiber deployments but not so high that providers do not apply or do not agree to serve eligible locations, thereby stranding households without qualifying service.

“The NTIA has just allocated $40 billion to the states, and now it is the states’ turn to use this funding to maximize fiber deployments by setting the correct EHCT. Everyone recognizes this task is critical, but also challenging. Our BEAD Threshold Financial Model addresses that challenge head-on,” said Gary Bolton, President and CEO of the Fiber Broadband Association. “Now that we’ve created this tool we’re making it available to all states and we’re willing to work directly with each state to use the model with different variables and look forward to that opportunity. At the end of the day, setting a reasonable threshold is essential to the success of the BEAD program and our ability to connect every American to fiber broadband service.”

The BEAD Threshold Financial Model allows states to test various inputs and visualize the implications of different thresholds. It considers the extent of fiber coverage, the extent of alternative broadband technology coverage, and whether any funds remain. As a starting reference point for states to leverage, FBA and Cartesian ran the model using realistic but general assumptions, leveraging national average build costs and simple provider contribution estimates, to develop a reasonable, directionally-accurate threshold for each state.

FBA and Cartesian will explore the BEAD Threshold Financial Model tool further in a webinar on Wednesday, August 30, at 12:00 PM EDT. States can also find a guide for the BEAD Threshold Financial Model here. This financial modeling tool broadens the library of BEAD funding resources that FBA offers to state broadband offices, broadband service providers, and others. Since 2022, the FBA and NTCA have published multiple iterations of their Broadband Infrastructure Playbook to help states develop plans for the distribution of BEAD funding. To learn more about FBA research and resources, visit fiberbroadband.org/research-and-resources.

Read the full press release here.

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