The National Association of Surety Bond Producers (NASBP) and The Surety & Fidelity Association of America (SFAA) have 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 traditional letters of credit (LOCs).
Designed to assist state broadband offices and internet service providers (ISPs), the kit includes specialized bond forms, model language for award agreements, and a sample letter template. These tools aim to simplify the adoption of surety bonds for meeting the BEAD Program's security requirements, marking a pivotal shift in how broadband projects can secure funding.
The kit features two distinct bond forms tailored to different scenarios: one for ISPs directly engaging with state broadband offices and another for situations where the ISP's construction contractor is the primary bond qualifier. This dual approach ensures flexibility and accessibility for a wide range of participants in broadband infrastructure development.
Mark McCallum, CEO of NASBP, underscored the significance of this development, noting the critical role of broadband access in connecting communities, particularly in rural or underserved regions. The adoption of surety bonds is poised to enhance the feasibility of deploying essential broadband systems nationwide.
Julie Alleyne, SFAA Vice President of Policy & General Counsel, highlighted the advantages for smaller ISPs, which often face challenges in obtaining LOCs. Additionally, the use of surety bonds offers enhanced protection for state broadband offices and taxpayers, as surety companies conduct rigorous prequalification assessments before issuing bonds.
This innovation mirrors the prevalent use of surety bonds in public procurement, providing a trusted alternative to bank LOCs for companies receiving federal grants for broadband projects. The BEAD Program Surety Bond Information Kit is accessible for download on the SFAA website (https://surety.org/suretyprotects/), offering a vital resource for stakeholders in the broadband expansion effort.
The introduction of surety bonds into the BEAD Program represents a forward-looking approach to funding broadband infrastructure, promising to accelerate deployment and extend digital connectivity to underserved communities across the United States.
