On November 1, 2023, the National Telecommunications and Information Agency (NTIA) released a Programmatic Waiver loosening several aspects of the subgrantee letter of credit requirements to participate in the $42.5 billion Broadband Equity, Access, and Deployment (BEAD) program.  The waiver is welcome news for all broadband providers intending to participate in BEAD, especially small and rural providers.

Previously, the NTIA's BEAD Notice of Funding Opportunity (NOFO) required all subgrantees to maintain a letter of credit with certain banks in the amount of 25% of the total subgrant funding.

The NTIA Programmatic Waiver provides that:

• The letter of credit may be issued by any credit union with a Weiss Rating of B- or better;
• The subgrantee may use a performance bond of 100% of the subgrantee's award, instead of a letter of credit;
• The letter of credit or performance bond may be reduced over time based on the satisfaction of certain performance milestones, as established by the relevant State;
• Subgrantees using a performance bond are not required to provide a letter of credit bankruptcy legal opinion letter; and
• The letter of credit or performance bond may be reduced to 10% of the subgrantee's award if the award follows the NOFO Section IV.C.b reimbursement approach and such reimbursement periods are no more than six months, provided that such bonds or letters of credit are maintained until build-out completion.