The Broadband Equity, Access and Deployment (BEAD) Program provides $42 billion in funding to expand high-speed internet access across the United States. Part of the Infrastructure Investment and Jobs Act, BEAD will fund high-speed internet planning, infrastructure deployment, and adoption solutions.
According to a 2022 report by the America Achieves, “Creating and Expanding a Diverse Broadband Workforce with Good Jobs and Career Pathways,” the stakeholders involved in broadband deployment are represented by the following;
- Multistate and regional internet service providers
- Rural local electric exchange carriers
- Electric cooperatives
- Broadband construction contractors
- Installation/technician contractors
- Electric utility companies
- Broadband electronics and materials manufacturers
BEAD is administered by the National Telecommunications and Information Administration (NTIA). Part of the application process requires states adopt financial assurance measures for entities bidding on work associated with the program. Originally a letter of credit requirement, the NTIA recently announced that surety bonds would be an acceptable instrument to meet this need.
In most cases, the bonding requirement will be a 100% performance bond which may be reduced upon completion of milestones. While this level of bonding is typical on government funded projects, participating in BEAD will significantly increase the amount of surety capacity required by participants in this program. According to the “Subgrantee Selection Primer” published by the NTIA and US Department of Commerce, deployment work for participants in the BEAD program may include:
- Construction
- Network improvement
- Facility acquisition
- Engineering and design
- Workforce development
- Cybersecurity training
As individual state requirements and criteria are pending, we expect the surety market to take a cautious approach on extending capacity for the BEAD program. Planning and strategic discussions around bond programs will be critical in the next few months, as states move quickly to deploy these funds.
Strategy set today can provide meaningful improvement in future surety program results. The WTW Surety team provides measurable results for our clients by:
- Maximizing surety capacity via broad market reach and long-term relationships with the largest surety carriers in the U.S.
- Negotiating market-leading surety terms and conditions for clients in all industries and at various levels of credit quality
- Leading program administration and back-office services to ensure efficiency and accuracy
