The National Association of Surety Bond Producers (NASBP) and The Surety & Fidelity Association of America (SFAA) have jointly unveiled a Broadband Equity, Access, and Deployment (BEAD) Program Surety Bond Information Kit. This initiative responds to the National Telecommunications & Information Administration's (NTIA) acceptance of surety bonds as an alternative security form for the BEAD Program, broadening the options beyond the previously mandated letters of credit (LOCs).
This pioneering kit includes specially designed bond forms to align with the NTIA's recent announcement, offering essential guidance for state broadband offices and internet service providers (ISPs) engaged in the BEAD Program. The program's goal is to enhance broadband accessibility throughout the United States, particularly in underserved regions.
Following the NTIA's programmatic waiver in November 2023, which adjusted the security prerequisites for BEAD grant beneficiaries, NASBP and SFAA established a surety working group. This team crafted two performance bond forms, model language for state broadband offices to integrate into award agreements, and a sample letter template. These tools aim to simplify the use of surety bonds to satisfy BEAD Program security demands.
The two bond forms address distinct needs: one for ISPs directly qualifying for bonding with state broadband offices, and another for scenarios where the ISP's construction contractor is more suited to qualify. This adaptability caters to the diverse requirements of various stakeholders in broadband infrastructure projects.
Mark McCallum, CEO of NASBP, underscored the significance of this advancement, noting, "Broadband access is pivotal for communities to connect, access information, and seize opportunities, especially in rural or underserved areas." He further explained that surety bonds would aid in the successful implementation of critical broadband systems.
The adoption of surety bonds as an LOC alternative is anticipated to profoundly influence the industry. Julie Alleyne, SFAA Vice President of Policy & General Counsel, emphasized the advantages for smaller ISPs, who frequently face challenges in obtaining LOCs. Additionally, she highlighted the enhanced protection for state broadband offices and taxpayers, as surety companies issue bonds only to entities deemed capable of completing the work after a comprehensive prequalification process.
This development mirrors the common practice in public procurement, where surety bonds are a recognized form of performance security. The new option grants qualified companies receiving federal grants for broadband infrastructure development a practical alternative to bank LOCs.
The BEAD Program Surety Bond Information Kit is now accessible for download from the SFAA website. This resource is poised to be instrumental in advancing broadband infrastructure expansion across the United States, especially in areas lacking adequate services.
As the broadband sector evolves, the inclusion of surety bonds as a security option for the BEAD Program represents a pivotal move towards more adaptable and inclusive funding solutions. This progress has the potential to hasten broadband deployment, ultimately aiding communities nationwide by enhancing access to vital digital infrastructure.
