Republican lawmaker Andy Harris has sent a letter to US commerce secretary Gina Raimondo regarding the National Telecommunications and Information Administration's (NTIA's) requirements for its Infrastructure Investment and Jobs Act (IIJA) broadband programmes.

The letter expresses the US congressman's concerns about the letter of credit (L/C) requirement included in the NTIA's two new grant funding programmes to stimulate the rollout across the US of broadband infrastructure.

Harris says the L/C requirements in the Enabling Middle Mile Broadband Infrastructure Programme (MM) and the Broadband Equity, Access and Deployment Programme (BEAD), impose an unreasonable financial burden on all applicants in the programmes, especially small providers.

Inequitable and discriminatory

"Under this requirement, for a broadband provider to be eligible for a grant under the MM and BEAD programmes, it must obtain a standby irrevocable L/C from a bank that equals 25 per cent of the grant amount," the congressman explains in his letter.

For several reasons, "this L/C requirement contravenes the IIJA because it prevents the distribut[ion of] the funds in an equitable and non-discriminatory manner" to all broadband providers, both small and big," he argues.

Large providers favoured

Harris says the L/C requirement favours large providers, as well as small providers with well-funded parents, affiliates or investors.

"In contrast, small, nimble, and efficient providers of broadband, without such well-funded parents, affiliates, or investors, typically do not have such significant spare funds available to satisfy this financial obligation," he concludes.

Questionable logic

Harris also argues that the requirement does not demonstrate a broadband provider's financial capability to provide the high-quality broadband services. Rather, he says, the L/C requirement simply requires that the provider has significant liquid funds available.

Earlier this month, internet service providers in Arkansas expressed concerns over how the use of L/Cs in newly revised state-level grant funding requirements could hamper broadband internet expansion across the US state (DC World News, 12 September 2022).

The letter from Andy Harris to US commerce secretary Gina Raimondo can be found here.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.