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HomeMy WebLinkAboutBroadband and Digital Equity Planning PUBLIC SERVICE COMMISSION OF WISCONSIN Broadband and Digital Equity Planning 5-BP-2023 ORDER This is the Order directing Commission staff to finalize the Broadband, Equity, Access and Deployment (BEAD) Initial Proposal Volume 2 document for submission to the National Telecommunications and Information Administration (NTIA). INTRODUCTION On November 16, 2021, the U.S. Congress enacted the Infrastructure Investment and Jobs Act (Infrastructure Act), also known as the Bipartisan Infrastructure Law, which includes the BEAD Program. The Infrastructure Act states that “[a]ccess to affordable, reliable, high- speed broadband is essential to full participation in modern life in the United States,” and that the digital divide “is a barrier to the economic competitiveness of the United States . . .” and “disproportionately affects communities of color, lower-income areas, and rural areas.”1 To provide access to high-speed broadband, the Infrastructure Act created the BEAD Program. The NTIA, which is a part of the U.S. Department of Commerce, administers the BEAD program and has delegated primary administration and implementation to states and other eligible entities.2 Under Wis. Stat. § 16.54, Governor Tony Evers authorized the Commission to administer BEAD Program funds. 1 Sec. 60101. Infrastructure Investment and Jobs Act, Pub. L. No. 117-58 (2021), https://www.congress.gov/117/plaws/publ58/PLAW-117publ58.pdf. 2 See Notice of Funding Opportunity, Broadband Equity, Access, and Deployment Program https://broadbandusa.ntia.doc.gov/sites/default/files/2022-05/BEAD%20NOFO.pdf PSC REF#:489683 Pu b l i c S e r v i c e C o m m i s s i o n o f W i s c o n s i n RE C E I V E D : 1 / 2 6 / 2 0 2 4 7 : 4 5 : 0 4 A M Docket 5-BP-2023 2 The BEAD Program provides $42.45 billion nationwide with the principal focus of deployment of broadband service through a state-administered competitive funding program. States and other eligible entities are allocated BEAD funds based on a nationwide location-by- location map of broadband service (the National Broadband Map 3) compiled by the Federal Communications Commission (FCC) as required by the Broadband Data Improvement Act.4 The NTIA has determined Wisconsin’s BEAD funding allocation is $1,055,823,573.71.5 The NTIA required each state or other eligible entity to submit to the NTIA a Five-Year Action Plan informed by robust engagement and planning no later than 270 days after its receipt of Initial Planning Funds.6 Wisconsin was allocated $5 million from its total BEAD allocation for the initial planning phase, which included research, capacity building, and outreach and engagement to inform the BEAD Five-Year Action Plan. Commission staff detailed a roadmap for establishing broadband goals and priorities, and a plan for a comprehensive needs assessment to inform the BEAD Five-Year Action Plan, informed by the findings from the BEAD Local Planning Grant Program and the BEAD Workforce Planning Grant Program. Commission staff submitted the BEAD Five-Year Action Plan to the NTIA on August 27, 2023.7 Wisconsin must submit to the NTIA the BEAD Initial Proposal (Initial Proposal) by December 27, 2023. According to NTIA guidance, the Initial Proposal which includes 20 total requirements should describe the process by which Wisconsin intends to use BEAD funding to 3 See FCC National Broadband Map https://broadbandmap.fcc.gov/home 4 See Broadband Data Improvement Act, Pub. L. No. 110-385 (2008), https://www.govinfo.gov/content/pkg/PLAW- 110publ385/pdf/PLAW-110publ385.pdf. 5 See National Telecommunications and Information Administration BEAD Allocation Press Release https://ntia.gov/press-release/2023/biden-harris-administration-announces-state-allocations-4245-billion-high-speed 6 See Notice of Funding Opportunity, Broadband Equity, Access, and Deployment Program https://broadbandusa.ntia.doc.gov/sites/default/files/2022-05/BEAD%20NOFO.pdf 7 See Wisconsin Public Service Commission, BEAD Five-Year Action Plan https://psc.wi.gov/Documents/broadband/5YearActionPlan.pdf Docket 5-BP-2023 3 ensure that every resident and business has access to a reliable, affordable, and high-speed internet connection. The Initial Proposal must be submitted in two parts, Volumes 1 and 2, which may be submitted together or separately. Wisconsin has submitted Volume 1 ahead of Volume 2. (PSC REF#: 486312.) The approval of Volume 2 triggers the 365-day deadline for making sub-awards of BEAD funding, and submitting the volumes separately is intended to support administrative efficiency and timeliness by beginning to carry out the challenge process addressed in Volume 1 before the sub-award timeline begins. The goal of the Initial Proposal Volume 1 was to address the four statutory requirements as detailed in the BEAD NOFO that will result in the determination of the locations and community anchor institutions (CAI) that are eligible for BEAD funding for broadband expansion projects and enable the PSC to conduct a challenge process to validate and finalize those determinations. Volume 2 addresses the remaining 16 requirements for the Initial Proposal. Central to the Initial Proposal Volume 2 is Requirement 8: Deployment Subgrantee Selection Process, which details the proposed sub granting process for BEAD funding. The remaining requirements include plans to ensure labor standards and protections are strongly enforced; plans to prepare workforce for broadband deployment; an assessment of climate threats and mitigation options relevant to broadband infrastructure; process for supporting and tracking supplier diversity; assets and resources for cost and barrier reduction; affordability measures including a low-cost service requirement; and compliance and regulatory provisions. As required by the BEAD NOFO the Commission published a draft of the BEAD Initial Proposal Volume 2 for a 30-day public comment period beginning on November 10, 2023, and Docket 5-BP-2023 4 received 59 public comments. The Commission considered the matter at its open meeting of December 14, 2023. Findings of Fact 1. It is reasonable for Commission staff to work with NTIA to update and incorporate the Letter of Credit Conditional Programmatic waiver with the goal of offering potential applicants flexibility and increasing participation 2. It is reasonable to for Commission staff to work with NTIA to address the engineering certification requirement by seeking a waiver to give applicants the flexibility to use alternative methods for project diagrams, network design and cost information to allow for the certification or modified certification to come as part of a later phase of the process. 3. It is reasonable for Commission staff to clarify who is eligible for a “simple questionnaire” in relation to Letter of Intent and which prior grant recipients are included. 4. It is reasonable for Commission staff to incorporate flexibility to adjust the cost model scoring range and points if applications are consistently above the modeled cost. 5. It is reasonable for Commission staff to adjust the cost model for multi-dwelling units to recognize that it reflects the cost to serve the location and not internal units as the cost to build within a building may significantly exceed the cost to connect the location. 6. It is reasonable for Commission staff make the following changes to the scoring metric relating to price commitments: a. Reduce the Priority Affordability scoring criteria points from 23 to 18 and increase the Fair Labor Practices scoring criteria from 12 to 17. Docket 5-BP-2023 5 b. Allow participants to adjust initial price commitments every year based on the Consumer Price Index (CPI). 7. It is reasonable for Commission staff to modify the application of the low-cost plan (Requirement 16) to apply only to the BEAD project areas rather than the provider’s entire state footprint. 8. It is reasonable for Commission staff to modify the criteria for the low-cost plan to identify a cost of $40 per month or less for the first 12 months of service for every provider, regardless of company size. 9. It is reasonable for Commission staff to work with NTIA to allocate funding from BEAD to reduce the barriers to deployment and increase the cost efficiency associated with underground locating services and other permitting processes. 10. It is reasonable for Commission staff to incorporate any feedback received from NTIA to ensure alignment with the goals and guidance provided in the Infrastructure Investment and Jobs Act and Broadband Equity, Access and Deployment Program Notice of Funding Opportunity Conclusions of Law 1. The BEAD program is created under the Infrastructure Investment and Jobs Act of 2021, Division F, Title I, Section 60102, Public Law 117-58, 135 Stat. 429, 47 U.S.C. § 1702(b). The BEAD NOFO describes the requirements under which NTIA will award grants in connection with the BEAD Program. 2. Pursuant to Wis. Stat. § 16.54 and gubernatorial approval, the Commission has the authority to receive and administer BEAD funding. Docket 5-BP-2023 6 3. The Commission has particular expertise to oversee and allocate BEAD funding due to its administration of the Broadband Grant Expansion program under Wis. Stat. § 196.504 and its administration and allocation of American Rescue Plan Act (ARPA) broadband grant funds. 4. The Commission may impose any term, condition, or requirement necessary to protect the public interest pursuant to Wis. Stat. §§ 196.02 and 196.395. 5. The Commission has authority under Wis. Stat. § 15.02(4) to delegate any function vested by law to the Commission to any officer or employee of the Commission had delegates authority to Commission staff to finalize the BEAD Initial Proposal Volume 2 document for submission to the NTIA consistent with the terms and conditions of this Order. Opinion The Commission has extensive experience and specialized knowledge in establishing the design and scope of broadband grant programs. The design of the BEAD Initial Proposal Volume 2 will decide the competitive subgrantee selection process for awarding BEAD grant funds, as well as the details of other key program requirements such as a low-cost service option, labor standards, climate resiliency, workforce development and diversity, and cost and barrier reduction. The Commission utilized model federal guidance, research, experience, and best practices to draft the BEAD Initial Proposal Volume 2, and ensure the proposal meets the federal statutory requirements. The Commission also considered the 59 public comments received within the designated comment period from consumers, providers, industry associations, local governments, a Tribal and Regional Economic Development organization, labor unions, investor-owned utilities and other stakeholders. The Commission identified several themes from Docket 5-BP-2023 7 the received public comments which informed consideration of modifications to the draft proposal, related to affordability and pricing, provider eligibility, cost modeling, labor practices, and utility locating services. A number of commenters raised considerations related to the provisions of the draft Volume 2 establishing a low-cost service option (Requirement 16). The low-cost service option is a federal requirement that must be provided by subrecipients of BEAD funding. In order to ensure limited deployment barriers for providers, while maintaining affordability for residential consumers, the Commission directs staff to establish a low-cost service option requiring all providers, regardless of size or subscriber base, to establish an offering that sets prices of $40 per month or less for eligible households. Additionally, the Commission finds it reasonable to require that providers extend this low-cost service option only to eligible households in BEAD- funded project areas, and not to a provider’s entire service footprint across Wisconsin. Additional points are made available for applicants’ voluntary price commitments to support affordability in the secondary and additional criteria, as allowed by NTIA. The Commission directs staff to establish that subrecipients who choose a price commitment may adjust their affordability commitments each year based on the Consumer Price Index. Regarding provider eligibility, the Commission recognizes the value of ensuring a robustly competitive process that encourages participation by all eligible applicants. The Commission recognizes that the Letter of Credit requirement may serve as a substantial financial barrier for applicants and that a waiver to that requirement could provide both flexibility in the application of the requirement, as well as a reduced level of credit required. The Commission Docket 5-BP-2023 8 directs staff to work with NTIA to clarify the Letter of Credit waiver to give providers as much flexibility as possible with this federal requirement. The Commission received multiple public comments identifying additional administrative and programmatic barriers that could be lowered to support participation by eligible BEAD applicants. The Commission directs to staff to seek a waiver from NTIA so providers can use alternate certifications for their BEAD project engineering plans, and for staff to not require this certification from applicants until the end of the subgrantee selection process. Additionally, the Commission directs staff to further clarify which applicants are eligible for the simplified Letter of Intent at the start of the subgrantee selection process. Based on public comments received, the Commission directs staff to incorporate the needed flexibility to adjust the cost model used for scoring applications, in the case that the cost model is realized to be underestimated during the subgrantee selection process. The Commission acknowledges that the actual estimated costs of deployment submitted by applicants will be realized when the application process begins, and in the case that actual costs are on average higher than the cost model estimated, it will be necessary for staff to adjust the model accordingly to avoid a scoring outcome where the majority of applications receive minimal or no points due to the misaligned cost model. This may be particularly important for proposals that include multi dwelling units, which reflect the cost to serve the location rather than all the individual household units at the location. Multiple comments requested that more scoring weight be applied to the labor standards scoring metric. The Commission finds that increased weighting is appropriate to recognize the significance of maintaining strong labor standards and provide balance in the scoring rubric Docket 5-BP-2023 9 between merit criteria, and directs staff to increase the fair labor practice maximum score from 12 points in the initial proposal to 17 points, while reducing the reduce the priority affordability scoring criteria from 23 to 18 points. Public comments identified cost and efficiency challenges associated with providing utility infrastructure locating services and fulfilling permitting requirements in support of broadband projects. The Commission recognizes that both increased capacity and personnel for locating services, as well as funding support to improve efficiency of locating and permitting processes will be critical for the successful deployment of the influx of BEAD broadband infrastructure projects. The Commission directs staff to consider dedicating funding or resources for training assistance or other related effort to reduce costs and the overall efficiency of locating services and other permitting processes. Order 1. Commission staff shall work with NTIA to update and incorporate the Letter of Credit Conditional Programmatic waiver with the goal of offering potential applicants flexibility and increasing participation. 2. Commission staff shall seek to reduce administrative barriers for the required engineering certification within the bounds of what is allowed by NTIA and pursue a waiver to give applicants the flexibility to use alternative methods for project diagrams, network design and cost information to allow for the certification or modified certification to come as part of a later phase of the process. 3. Commission staff shall further clarify which applicants are eligible for the simplified letter of intent for the forthcoming BEAD subgrantee selection process. Docket 5-BP-2023 10 4. Commission staff shall incorporate flexibility to adjust the cost model scoring range and points if applications are consistently above the modeled cost and to adjust the cost model for multi-dwelling units to recognize the higher cost to connect individual units. 5. Commission staff shall reduce the point allocation for the Priority Affordability application scoring criteria from 23 points to 18 points and increase the point allocation for the Fair Labor Practices criteria from 12 points to 17 points. 6. Commission staff shall adjust the low-cost service plan in Requirement 16 to require all BEAD subgrant recipient providers to offer service of $40 per month or less to eligible households for the first 12 months of BEAD-funded network operation and then adjust annually to the consumer price index for seven additional years. 7. Volume 2 shall allow BEAD subgrantees to adjust their price commitment related to the priority affordability scoring criteria in Requirement 8 annually to the consumer price index (CPI). 8. Commission staff shall adjust requirement 16 to require BEAD subrecipients to offer their low-cost service option to eligible households only within their BEAD grant-funded service footprint. 9. Commission staff shall work with NTIA to allocate funding or resources from BEAD to reduce the barriers to deployment and increase the cost efficiency associated with underground locating services and other permitting processes. 10. Commission staff shall incorporate any feedback received from NTIA to ensure alignment with the goals and guidance provided in the Infrastructure Investment and Jobs Act and Broadband Equity, Access and Deployment Program Notice of Funding Opportunity Docket 5-BP-2023 11 Dated at Madison, Wisconsin, January 25, 2024. For the Commission: Cru Stubley Secretary to the Commission CS:JF:TK:AK:RT:MM:kle DL: 01981956 See attached Notice of Rights Docket 5-BP-2023 12 PUBLIC SERVICE COMMISSION OF WISCONSIN 4822 Madison Yards Way P.O. Box 7854 Madison, Wisconsin 53707-7854 NOTICE OF RIGHTS FOR REHEARING OR JUDICIAL REVIEW, THE TIMES ALLOWED FOR EACH, AND THE IDENTIFICATION OF THE PARTY TO BE NAMED AS RESPONDENT The following notice is served on you as part of the Commission's written decision. This general notice is for the purpose of ensuring compliance with Wis. Stat. § 227.48(2), and does not constitute a conclusion or admission that any particular party or person is necessarily aggrieved or that any particular decision or order is final or judicially reviewable. PETITION FOR REHEARING If this decision is an order following a contested case proceeding as defined in Wis. Stat. § 227.01(3), a person aggrieved by the decision has a right to petition the Commission for rehearing within 20 days of the date of service of this decision, as provided in Wis. Stat. § 227.49. The date of service is shown on the first page. If there is no date on the first page, the date of service is shown immediately above the signature line. The petition for rehearing must be filed with the Public Service Commission of Wisconsin and served on the parties. An appeal of this decision may also be taken directly to circuit court through the filing of a petition for judicial review. It is not necessary to first petition for rehearing. PETITION FOR JUDICIAL REVIEW A person aggrieved by this decision has a right to petition for judicial review as provided in Wis. Stat. § 227.53. In a contested case, the petition must be filed in circuit court and served upon the Public Service Commission of Wisconsin within 30 days of the date of service of this decision if there has been no petition for rehearing. If a timely petition for rehearing has been filed, the petition for judicial review must be filed within 30 days of the date of service of the order finally disposing of the petition for rehearing, or within 30 days after the final disposition of the petition for rehearing by operation of law pursuant to Wis. Stat. § 227.49(5), whichever is sooner. If an untimely petition for rehearing is filed, the 30-day period to petition for judicial review commences the date the Commission serves its original decision.8 The Public Service Commission of Wisconsin must be named as respondent in the petition for judicial review. If this decision is an order denying rehearing, a person aggrieved who wishes to appeal must seek judicial review rather than rehearing. A second petition for rehearing is not permitted. Revised: March 27, 2013 8 See Currier v. Wisconsin Dep’t of Revenue, 2006 WI App 12, 288 Wis. 2d 693, 709 N.W.2d 520.