In a significant development for broadband infrastructure funding, the National Association of Surety Bond Producers (NASBP) and the Surety and Fidelity Association of America (SFAA) have jointly released a comprehensive information kit designed to support the Broadband Equity, Access, and Deployment (BEAD) program.
This resource follows the National Telecommunications and Information Administration’s (NTIA) decision last November to allow surety bonds as a form of security in place of letters of credit for BEAD-funded initiatives.
Recognizing the need for standardized tools, NASBP and SFAA established a specialized working group tasked with developing model bond forms and language that meet the BEAD program’s requirements. As a result, two distinct bond forms were created: one for internet service providers (ISPs) who qualify to provide bonds directly to state broadband offices, and another for contractors working with ISPs who are better positioned to secure bonding.
Mark McCallum, CEO of NASBP, emphasized that allowing the use of surety bonds enhances the safeguarding of federal and state investments in broadband projects, ensuring vital infrastructure projects are completed. Meanwhile, Larry LeClair, NASBP’s Director of Government Relations, noted the organizations’ commitment to educating ISPs about how surety bonds can support their participation in BEAD-funded projects.
Julie Alleyne, Vice President of Policy and General Counsel for SFAA, highlighted that this shift provides much-needed alternatives for smaller ISPs, many of whom faced difficulties in obtaining letters of credit. She pointed out that surety companies conduct thorough prequalification assessments before issuing bonds, offering greater assurance of project completion compared to letters of credit, which primarily require cash collateral without evaluating the contractor’s performance ability.
Prior to this change, providers had to secure letters of credit amounting to 25 percent of project costs, often tying up significant capital and presenting major obstacles, especially for smaller broadband providers. The introduction of surety bonds as an alternative security method represents an important step toward greater participation and protection within the broadband expansion landscape.
If your organization is preparing to participate in a BEAD-funded project or any broadband expansion initiative, having the right surety bond partner is essential. National Surety Services, Inc. is ready to help you navigate the bonding process with experience, speed, and expertise. Contact us today at 1-800-953-6699 to discuss your surety bond needs and ensure your project moves forward with confidence.