PART 1. COMPTROLLER OF PUBLIC ACCOUNTS
CHAPTER 16. COMPTROLLER GRANT PROGRAMS
SUBCHAPTER B. TEXAS BROADBAND DEVELOPMENT OFFICE
DIVISION 1. BROADBAND DEVELOPMENT MAP
The Comptroller of Public Accounts adopts new §16.21, concerning broadband development map; §16.22, concerning map challenges and criteria; §16.23, concerning challenge process and deadlines; and §16.24, concerning map challenge determinations, with changes to the proposed text as published in the October 13, 2023, issue of the Texas Register (48 TexReg 5957). The rules will be republished. These new sections implement changes to Government Code, §490I.0109, made by Senate Bill 1238, 88th Legislature, R.S., 2023. The new sections will be located in Subchapter B, in new Division 1 (Broadband Development Map).
The comptroller also renames Subchapter B as Texas Broadband Development Office.
The new sections replace §16.33, concerning designated area eligibility, and §16.34, concerning designated area reclassification, which the comptroller will repeal in a separate rulemaking.
Section 16.21 implements the requirement for the comptroller to create, and annually update, a broadband development map depicting the availability of broadband service for each broadband serviceable location in this state. As required by Senate Bill 1238, the new section updates the minimum information that must be displayed on the map regarding the availability of broadband service for each designated area. The section updates the scope of designated areas from a census block level to a county level perspective to provide a more relatable way to visualize broadband availability but retains the discretion of the comptroller to adjust the scope as needed if displaying the required information is not technically feasible or impractical at the county level.
Section 16.22 permits internet service providers and political subdivisions of this state to submit challenges to the broadband development map. Challengers will be permitted to challenge the classification of broadband serviceable locations as shown on the broadband development map. The section limits the reasons for which a challenge can be submitted and requires the office to publish the requirements and criteria for submitting a challenge on its website. The section will also limit the ability to submit a challenge if the comptroller adopts the federal broadband map by imposing a preliminary requirement to first submit a challenge to the federal broadband map before submitting a challenge to the state broadband map.
Section 16.23 outlines the challenge process and deadlines. The section gives the office the discretion to reject a challenge without further action if the challenge does not comply with the requirements of the section or criteria established by the office. To ease administration, the section changes the manner that required notices may be provided to affected broadband service providers and political subdivisions.
Section 16.24 establishes the criteria the office must consider in making a map challenge determination, including: the availability of reliable broadband service; actual internet speed and reliability data; the existence or non-existence of existing federal commitments; and any other information the office determines may be useful in making a determination. The section tracks statutory language regarding when a location that is subject to an existing federal commitment for the deployment of broadband services may be reclassified as eligible to receive funds and re-adopts provisions for recapturing funds if, after making an award, the office later determines that a location was ineligible to receive funding.
The comptroller received comments from the following organizations, interest groups, and individuals: AARP Texas ("AARP"); AT&T; Cherokee County Electric Cooperative Association ("CCECA"); City of Austin ("Austin"); GVEC; Harris County Office of Broadband ("Harris County"); The Honorable Trent Ashby; Nextlink Internet; Tarana Wireless; Texas Cable Association ("TCA"); Texas Electric Cooperatives ("TEC"); Verizon; and Texas Telephone Association ("TTA").
The comptroller thanks Nextlink Internet for its comments expressing appreciation that the proposed rules more closely aligned with the Broadband Equity, Access, and Deployment (BEAD) Program requirements, while enhancing program flexibility and maintaining technology neutrality.
The comptroller also received comments from CCECA that did not address any specific proposed rules. CCECA stated its continuing issue with the lack of state funding being made available to providers bringing broadband to rural areas because those areas are already "locked up" due to existing federal programs like the Rural Digital Opportunity Fund. CCECA stated that it was notably concerned about the apparent strategy employed by some broadband providers to "lock up" areas through the use of existing federal commitments without any true plan on the part of those providers to expand service to those areas and requested that the comptroller provide more flexibility to allow state funding in those areas. While the comptroller appreciates these concerns, the comptroller is statutorily unable to award grant funding to locations that are subject to an existing federal commitment to deploy qualifying broadband service. The comptroller therefore lacks the authority to amend the proposed rules as suggested by these comments.
The comptroller also received general comments from TCA in which they expressed appreciation for the comptroller moving toward a location-based funding approach. At the same time, TCA argued against adoption of §§16.21-16.24. TCA suggested that the Federal Communications Commission ("FCC") map and challenge process should be the primary mapping data source that the BDO should rely upon and argued in favor of adopting the federal map. TCA noted that the FCC map and challenge process were robust and ongoing and therefore questioned the need for a separate state map and challenge process. The comptroller thanks TCA for its comments on this important issue but notes that the BDO is statutorily required to create and update a broadband availability map. While the comptroller may adopt the federal map in lieu of creating its own map, the statute contemplates a state map challenge process regardless of whether or not the comptroller adopts the federal map. The proposed rules are needed to describe the mapping and challenge process consistent with statutory requirements. Therefore, the comptroller will not withdraw the proposed rules as suggested.
TCA submitted a comment on §16.21 in which they proposed amending the rule to make clear that the Broadband Development Office ("BDO") would be required to rely on the FCC broadband maps and its submission and challenge process. The comptroller disagrees with this comment because the rule is consistent with statutory language that permits, but does not require, the comptroller to adopt the federal broadband map. Amending the proposed rule as suggested would limit the comptroller's flexibility to use the best data available when creating or updating the broadband development map. Therefore, the comptroller declines to amend the rule as suggested.
The comptroller received several comments relating to the Broadband Development Map requirements contained in §16.21(b). The comments indicate there is some confusion about the purpose of the proposed mapping changes and how they affect the broadband development program. AARP questioned the reasoning behind the proposed change, noted that counties may be disproportionately large and asked whether the change was made to align with the federal map. Austin expressed a concern that widening the focus of the map to the county level would likely be technically inaccurate and therefore would not be practical in measuring the availability of broadband to all Texans. Austin therefore encouraged the comptroller to adopt the location level measurement that is being used by the FCC in their National Broadband Map. Harris County reiterated the same concerns in its comments regarding the proposed rule, arguing that using county level data would result in the elimination of urban un(der)served areas from program eligibility. In light of these concerns, both Austin and Harris County expressed support for adopting §16.21(c). Similar to the concerns raised by Austin and Harris County, TEC expressed doubt that a county level map would be workable because it would not accurately portray actual service availability. TEC further commented that a separate map representing designated areas by county may result in confusion around eligibility which it correctly identified as being based on granular locations.
The comptroller is adopting the change in focus from the census block level to the county level to better align with the changed purpose of the broadband development map. Under prior law, the comptroller was required to determine the scope of a designated area and for each designated area also determine and display on its map whether the area was eligible for funding under the program based on the percentage of unserved addresses within the area. However, under Senate Bill 1238, 88th Legislature, R.S., 2023, program eligibility is no longer based on designated areas but is instead based on whether individual broadband serviceable locations are un(der)served. In line with comments received by AT&T, the purpose of the change in the scope of a designated area is to make it easier to understand and reference the broadband serviceable locations appearing on the map and to provide the BDO an analysis tool for measuring the availability of broadband in geographically recognizable areas. As outlined by §16.21(d), the BDO is required to display on its map each unserved, underserved, and served broadband serviceable location. Thus, the BDO has already proposed adopting the location level measurement urged by both Austin and Harris County and does not believe that the change in the scope of a designated area will negatively impact the eligibility of urban locations to receive funding under the program. For these reasons, the comptroller disagrees with the comments and adopts §16.21(b) without changes.
With respect to §16.21(b), AT&T further commented seeking confirmation that the proposed change in scope did not mean that project areas proposed by providers must encompass entire counties. The comptroller confirms that project areas proposed by providers will not be required to encompass entire counties as a result of this rule.
TTA commented on §16.21(d) encouraging the comptroller to replace the term "existing federal commitment to deploy" with a newly defined term for enforceable commitment which includes state and local commitments in addition to federal commitments. The comptroller disagrees with this comment because the rule mirrors statutory language which sets forth the minimum requirements for the broadband development map. Therefore, the comptroller adopts §16.21(d) without changes.
The comptroller received many comments regarding the map challenge process outlined in proposed §16.22.
TCA suggested that the FCC map and challenge process should be the primary mapping data source that the BDO should rely upon. TCA noted that the FCC map and challenge process were robust and ongoing and questioned the need for a separate state map and challenge process. TCA expressed concern that the proposed rule would result in confusion due to the existence of separate maps and therefore recommended that the rule either should not be adopted or should be modified to require coordination with BEAD processes. The comptroller disagrees with this comment because the proposed rule is consistent with statutory language permitting, but not requiring, the comptroller to adopt the federal broadband map. Amending the proposed rule as suggested would unnecessarily limit the comptroller's flexibility to use the best data available when creating or updating the broadband development map. Therefore, the comptroller declines to amend §16.22(a) to make use of the federal map and challenge processes mandatory.
Both TCA and TTA submitted comments suggesting amendments to §16.22(c). TCA requested that the comptroller consider permitting limited map challenges on a rolling basis based on newly built locations and locations that are not reflected on the then-current map. According to TCA, such a change would ensure the map was as up-to-date as possible to avoid overbuilding. While the comptroller agrees that having an up-to-date map is desirable, the comptroller does not believe that a rolling challenge process is practical due to limited comptroller resources and would be inconsistent with the current statutory scheme for map challenges. TCA also requested that the comptroller consider allowing challenges where there are pending challenges under the FCC's Broadband Data Collection challenge processes, there are unresolved challenges pending at the FCC, or there has been a successful map challenge in connection with the administration of NTIA's BEAD challenge process. For the reasons outlined above, the comptroller believes a rolling challenge process is impractical and inconsistent with the current statutory scheme if the comptroller has not already adopted the FCC map. And while the comptroller agrees that its map should reflect the results of NTIA's BEAD challenge process, the comptroller already has the authority to update its map using the best available data, including data from the BEAD map challenge process. Therefore, the comptroller does not believe a change to the rule is needed based on this comment.
TTA requested that the time period for making reliable broadband service available at a location as outlined in §16.22(c)(1) should be clarified to be within 10 business days to remain consistent with the federal Broadband Data Act. The comptroller agrees with this comment and will adopt §16.22(c)(1) with changes.
TTA also commented that the term "reliable broadband service" should be expanded to include "qualifying broadband service" for the sake of clarity, noting that a location reclassification can be anything from an unserved, underserved, or served location and that the combined term would make that distinction. The comptroller disagrees with this comment because the proposed rule already considers the distinction between unserved, underserved and served broadband serviceable locations. Therefore, the comptroller declines to make a change to the proposed rule based on this comment.
TCA proposed that the comptroller amend §16.22(c)(2) to delete the reference to "actual" speeds of the fastest available service tier at the location when considering a map challenge. The comptroller disagrees with this suggestion because it is statutorily required to determine whether speed thresholds at broadband serviceable locations are met when determining the availability of broadband service at those locations. Divorcing a consideration of actual speeds and only allowing challenges based on theoretical, advertised speeds would not be consistent with statute. Therefore, the comptroller declines to make a change to the proposed rule based on this comment.
TCA opposed the inclusion in §16.22(c)(4) of a challenge based on existence of a data cap that results in actual speeds of the fastest available service tier falling below the broadband service speed thresholds established by Government Code, §490I.0105(a). TCA argued that nothing in state law permits the BDO to determine that a location is not served based on a data cap. TCA further stated that the status of a location should be determined solely on statutory criteria and that BDO should neither add nor subtract from the definition the legislature employed to determine whether a location is served or un(der)served. The comptroller disagrees that its proposed rule which includes consideration of a data cap exceeds its authority or deviates from the statutory scheme. Under Senate Bill 1238, the comptroller is required to classify each broadband serviceable location based on access to reliable broadband service. The plain, ordinary meaning of "access" includes the ability "to obtain or make use of something." See the definition of "Access" Merriam-in Webster.com. Merriam-Webster, 2023. In addition, the statute does not qualify or otherwise limit the term "access" to permit the conclusion that access to the internet at the required speeds need only be intermittent. The comptroller believes that imposition of a data cap that artificially restricts data speeds and which results in broadband service at a location falling below the statutorily imposed thresholds necessarily means that the location will not have access to the required broadband service. Thus, permitting a map challenge based on the existence of a data cap is consistent with the statutory guidelines.
TCA further argues that adding a requirement beyond the statutorily imposed thresholds would have the impermissible effect of regulating broadband service. For the reasons outlined above, the comptroller believes its interpretation is consistent with statutory language. However, the comptroller also disagrees with the comment that permitting a challenge based on the existence of a data cap amounts to impermissible regulation. The comptroller acknowledges that under Government Code, §490I.0103(c), it is not granted authority to regulate broadband services or broadband service providers. But nothing in the proposed rule imposes an external obligation upon or regulates the activities of broadband service providers. To the contrary, broadband service providers may or may not, at their sole discretion, choose to impose data caps and nothing in the proposed rule acts to regulate the ability of a broadband service provider to do so. For the foregoing reasons the comptroller declines to make changes to the proposed rule based on these comments.
TCA requested that the comptroller consider amending §16.22(c)(5) to add challenges based on the existence of state and local commitments to deploy qualifying broadband. TTA agreed with TCA that the inclusion of state and local commitments as a permissible challenge would be consistent with federal BEAD requirements and would reduce wasted funding on locations that are already going to be served by other means. In addition to existing federal, state and local commitments, TTA also urged the comptroller to consider permitting challenges based on a provider's "planned service" that is coupled with evidence of existing binding obligations to deploy broadband to a given location which would, in their estimation, obviate the need for funding to be expended in that location. TCA also proposed amending the proposed rule to allow challenges to be made based on "planned privately funded new deployments." The comptroller disagrees with these comments. While the comptroller agrees with the goal of maximizing the expansion of broadband service and avoiding duplicative spending, the comptroller is statutorily required to classify each broadband serviceable location based on access to reliable broadband service. With the exception of existing federal commitments to deploy broadband service which are statutorily prohibited from receiving program funds, the comptroller does not believe it has the authority to stretch the plain and ordinary meaning of "access" to include promises of future broadband availability when considering a map challenge. Therefore, the comptroller declines to amend the proposed rule based on these comments.
The comptroller received many comments related to the map challenge process outlined in §16.22(d) which is applicable in the event that the comptroller adopts the FCC National Broadband Map as permitted under Government Code, §490I.0105(q). TEC expressed concerns with adopting the FCC map and the requirement that an entity seeking to challenge the map must first successfully challenge the federal map. TEC stated that many of its members have expressed frustration at the length of the FCC challenge process and argued that the length of delay while awaiting federal action would hamper the ability to fix inaccuracies in the map as adopted by the BDO. TEC further noted its belief that broadband service providers within the state were more likely to be better informed about the actual status of service quality throughout the state than the FCC. Therefore, TEC requested that the comptroller maintain a challenge process that was not dependent on federal action. In addition, while acknowledging that adoption of the federal map is within the discretion of the comptroller, TEC urged the comptroller to consider a process for broadband service providers and others to either challenge or provide input on the decision to adopt the federal map. TTA raised a concern that the prerequisite federal challenge imposes an unreasonable burden on smaller providers who do not have the resources to mount a successful challenge at the FCC. Therefore, TTA also urged the comptroller to modify the proposed rule to allow challenges irrespective of whether they were the subject of a successful challenge at the FCC. GVEC also commented unfavorably against the requirement that an entity seeking to challenge the map must first successfully challenge the federal map, arguing that the federal map challenge process should be managed by the BDO, with challenges from providers flowing through the BDO to the FCC.
The comptroller appreciates the many viewpoints raised by these comments. In the event that the comptroller adopts the federal map, the proposed rule is aimed at ensuring that the federal and state map challenge processes work in tandem to avoid inconsistencies between the FCC map and the federal map as adopted by the comptroller. Consequently, the comptroller respectfully disagrees with comments urging the comptroller to either not adopt the proposed rule or modify the proposed rule to allow challenges irrespective of whether they were the subject of a successful challenge at the FCC. Similarly, while the comptroller acknowledges the concerns raised by TTA and GVEC, the comptroller does not believe the requirement places a significant fiscal impact on providers and any potential burden is counterbalanced by the need to avoid inconsistencies between the state and federal broadband maps. Therefore, the comptroller declines to make changes to the proposed rule based on these comments.
Harris County also expressed concerns with the proposed rule, noting that the proposed challenge process would impose an inefficient and burdensome validation process. In their view, requiring a state challenge to the adopted federal map in addition to a challenge to the FCC map would likely hinder the speedy reclassification of broadband serviceable locations on the state map. Therefore, Harris County recommended simplifying the challenge process by requiring a single challenge to be made to the FCC and having the BDO adhere to the decision. Austin concurred and made the same recommendation. The comptroller appreciates the concerns raised by these comments but unfortunately is unable to implement this suggestion due to statutory constraints. Under Government Code, §490I.0105(l) et seq. providers are afforded the right to petition the BDO to reclassify broadband serviceable locations which then leads to a mandatory review process. Therefore, the comptroller declines to make changes to the proposed rule based on these comments.
GVEC raised a concern that the current state map and federal maps use different unique location identifiers and suggested that the comptroller consider an additional rule requiring the BDO to publish a cross index of the identifiers used in the Broadband Development Map and the FCC National Broadband Map to alleviate the burden placed on providers. The comptroller appreciates GVEC bringing this issue to its attention. The comptroller does not believe a rule is necessary to address this issue but will instead work to create future versions of the Broadband Development Map contain references to the location identifiers used in the FCC National Broadband Map.
The comptroller received several comments regarding §16.23 which outlines the challenge process and deadlines. As noted above, TCA expressed concerns that adoption of the proposed rules, including this section, would result in confusion due to the existence of separate maps and therefore recommended that the rule should either not be adopted or should be modified to require coordination with BEAD processes. In line with their comments above suggesting the comptroller should consider both state and local commitments to deploy broadband, TCA suggested the comptroller adopt a process to gather information about local commitments. For the reasons outlined above, the comptroller may not take into account local commitments for the purpose of map challenges and therefore does not believe an additional rule to outline such a process is necessary.
TCA commented that §16.23(a) should be amended to clarify that challenges may be made after any update to the broadband development map and remarked that the current language implies that there is only one publication and challenge process despite the map being updated on a regular basis. TCA also suggested that challenges should be accepted on an ongoing or rolling basis noting that the maps will be updated regularly by the FCC and the state. As noted above, in the event the comptroller adopts the FCC map, several commenters expressed concern with the requirement to first successfully challenge the federal map before submitting a state challenge and the delays associated with that process. The comptroller notes that the deadline for submitting a challenge may be insufficient if a successful federal challenge is required before submitting a challenge to the federal map as adopted by the comptroller. The comptroller agrees that amending the proposed rule to clarify that challenges may be made after any update to the broadband development map would be useful. In addition, if the comptroller adopts the FCC map, then the comptroller believes extending the deadline for a map challenge is warranted. Therefore, the comptroller adopts the proposed rule with changes to clarify that challenges may be submitted after any update to the broadband development map is published, and extends the deadline for submitting a challenge subsequent to a successful federal challenge of the FCC map. However, the comptroller disagrees with the suggestion that challenges should be considered on an ongoing or rolling basis because doing so would be impractical. A rolling challenge process would result in a dynamic, rather than a static, map upon which neither the BDO or applicants for grant funding could reasonably rely.
The comptroller received two comments regarding §16.23(b). TCA remarked that the words "in this division" do not make sense in context. The comptroller disagrees with this comment because that phrase refers to the new sections that are proposed to be located in Subchapter B, in new Division 1 (Broadband Development Map). Therefore, the comptroller declines to make changes to the proposed rule based on this comment.
TEC noted that §16.23(b) permits the BDO to reject a challenge if the challenge is not submitted on the forms prescribed or if the challenge does not meet any other criteria adopted by the BDO, but requested that the comptroller consider requiring the BDO to state a reason for rejecting a challenge and provide for a reasonable cure period where the deficiency may be remedied by the challenger. TEC remarked that allowing a challenge to be rejected without an ability to cure or resubmit following a deficient filing could inadvertently defeat legitimate challenges that should be considered by BDO. The comptroller disagrees with this suggestion because it would extend an already lengthy challenge process and result in unreasonable delay in finalizing map updates. In addition, the map challenge has statutorily defined deadlines that the comptroller does not have authority to extend. For these reasons, the comptroller declines to make changes based on this comment.
The comptroller also received two comments about the notice requirements in §16.23(c). Due to the potential consequences associated with challenges, TEC expressed a concern that deemed notice of challenges may be insufficient. To alleviate this concern, TEC recommended that the comptroller include a written notice requirement for affected broadband service providers, with the date of notice being the date the written notice was delivered. TTA expressed a similar concern and observed that small businesses with limited staff would be unable to timely check the BDO's website every day for possible notices. At the same time, TTA recognized that, with the proposed rule, the BDO was seeking to streamline its notice procedures and suggested that the comptroller consider including an "opt-in" email distribution list to ensure that interested persons would receive actual notice of map challenges that may affect them. The comptroller agrees with the concern that under the proposed rule affected broadband service providers may not receive notice if the notice is limited to publication on the comptroller's website. At the same time, the comptroller appreciates TTA's recognition regarding the need to streamline the notice process and agrees with its compromise suggestion that the comptroller mandate the use of an "opt-in" email distribution list to provide the required notice to broadband service providers. The comptroller will adopt the proposed rule with changes accordingly.
The comptroller received many comments regarding §16.24. As noted above, TCA argued against adoption of the proposed rule for the reasons outlined above; but more specifically, TCA argues against mapping challenge criteria that are different from BEAD and FCC mapping challenge processes because of the risk of ending up with inconsistent data sets that would make coordination between BOOT and BEAD difficult. TCA also commented negatively about §16.24(a)(4), arguing in favor of adopting criteria permitted with BEAD or FCC challenges. The comptroller agrees with the concern raised in this comment but believes that the criteria adopted by the comptroller are either consistent with the federal mapping processes or permit the flexibility to maintain needed consistency between the state and federal maps. Therefore, the comptroller declines to make changes to the proposed rule based on these comments. TEC also commented on the map challenge criteria and advocated for the inclusion of criteria specifically aimed at assessing the feasibility of an ongoing project. TEC expressed the opinion that if an area is deemed to be served on the basis of an existing federal commitment to deploy qualifying broadband services, the proposed project should be analyzed for continued feasibility and, if determined unfeasible, the locations covered by the project should be reclassified. The comptroller disagrees with this comment as it is inconsistent with statute. Under Government Code, §490I.0106(d) and 490I.01061, the comptroller may not award a grant or other financial incentive for a location that is subject to an existing federal commitment unless the federal funding is forfeited. Consequently, the comptroller may only reclassify a location that is subject to an existing federal commitment only if the funding is forfeited and not because the project covered by the funding is unfeasible. Therefore, the comptroller declines to make a change to the proposed rule based on this comment.
Both TCA and TTA noted that §16.24(a) contains a reference to "designated areas" that should be amended due to changes implemented by Senate Bill 1238. The comptroller agrees with these comments and adopts the proposed rule with changes accordingly.
Several commenters including Representative Trent Ashby, AT&T, Austin, and Harris County requested the comptroller to provide a definition for "reliable broadband service." Representative Ashby provided comments urging the comptroller to adhere to the legislative purpose of Senate Bill 1238 by following federal guidance with respect to broadband reliability and enhanced speed requirements. Likewise, AT&T sought confirmation that the comptroller's proposed definition would be the same as that term is used in the BEAD Notice of Funding Opportunity which is limited to fiber-optic technology, cable modem/hybrid fiber-coaxial technology, digital subscriber line technology, or terrestrial fixed wireless technology utilizing entirely licensed spectrum or using a hybrid of licensed and unlicensed spectrum. Austin and Harris County urged the comptroller to provide a specific definition replete with technical specifications that include broadband download/upload speeds, consistency, quality of service and latency requirements. TTA also expressed the belief that the term "reliable broadband service" in §16.24(a)(1) was unclear and suggested it should be expanded to clarify that challenges may be made based on whether a location is unserved, underserved, or served. The comptroller appreciates these comments and agrees with the need to provide a definition for the term for the sake of clarity. The comptroller will add a definition for the term in a separate rulemaking that adopts amendments to §16.30, concerning definitions.
TCA advocated against the inclusion of speed data as a criterion the comptroller must consider when making map challenge determinations as provided under proposed §16.24(a)(2). TCA noted the difficulty of ensuring that speed tests contain accurate, verifiable information and noted that the FCC only relies upon speed tests as a supplemental source of information and not the sole basis for a challenge. TCA recommended that if the speed tests remain, §16.24(a)(2) be amended to require the speed tests submitted with a challenge to be subject to the same rigor that speed tests are subject to under BEAD program rules. While the comptroller agrees with the importance of ensuring that the information the BDO relies upon when making a challenge determination is accurate and verifiable, the rule does not require the comptroller to make a determination base solely on speed tests, nor does it require the comptroller to accept speed tests data results without evaluating their usefulness. Further, the challenge process itself provides third parties an opportunity to challenge any evidence, including speed tests, submitted by a challenger. For these reasons, the comptroller declines to amend the proposed rule based on this comment.
With respect to §16.24(a)(3) and §16.24(b), TTA reiterated its comments requesting the comptroller consider expanding its consideration of existing federal commitments to deploy broadband to also include state and local commitments. TCA also commented in favor of including state and local commitments when considering map challenges to ensure that all commitments for funding deployment to a location are taken into consideration. TTA also reiterated its comments requesting that the comptroller also consider privately funded planned service when evaluating map challenges. For the reasons previously discussed in the context of §16.22(c)(5), the comptroller declines to amend the proposed rule based on these comments.
The comptroller received several comments related to the claw back period contained in §16.24(d). AT&T, TCA and TTA supported the goal of the claw back provision but recommended that the comptroller limit the claw back to one year after award. AT&T commented that a provider's responsibility for proposing a project area that does not include ineligible locations should be limited to the date upon which the provider submits its application stating that a provider should not be held accountable for locations that became ineligible after its application was submitted. TCA argued that recipients should be able to rely on maps as they exist at the time of award and should not be penalized due to a change of conditions beyond their control. TTA observed that an indefinite claw back period was unreasonable because it could place a provider's funding in jeopardy even after the provider expended the funds to build the broadband Texans need. In addition to limiting the claw back period to one year after award, TTA also requested that the BDO be required to consult with an award recipient before making a decision to allow the recipient to make its case for extenuating circumstances. The comptroller disagrees with AT&T's and TCA's comment that the proposed rule would result in claw backs based on changed conditions because the rule limits claw backs for funding that was awarded in error to locations that were not eligible for an award at the time of making the award. Nor does the comptroller believe that the proposed rule would lead to uncertainty or penalizing a provider long after they have expended the funds because the rule requires the BDO to reduce the amount of any claw backs if it determines that the grant funds were expended in good faith reliance on the award. At the same time, the comptroller agrees that defining a claw back period would reduce uncertainty. In addition, the comptroller agrees that providers should expressly be given an opportunity to provide feedback before a decision to rescind funding is made. Therefore, the comptroller adopts the proposed rule with changes accordingly.
The new sections are adopted under Government Code, §490I.0109, which permits the comptroller to adopt rules as necessary to implement Chapter 490I regarding the Texas Broadband Development Office.
The new sections implement Government Code, Chapter 490I.
§16.21.Broadband Development Map.
(a) The comptroller shall create, update annually, and publish on the comptroller's website a broadband development map depicting the availability of broadband service for each broadband serviceable location in this state. The office shall use the best available information, including information available from the Federal Communications Commission, political subdivisions, and broadband service providers, to create or update the map.
(b) Except as provided by subsection (c) of this section, for the purpose of developing the broadband development map, the scope of a designated area in this state shall consist of a county.
(c) If the comptroller determines that developing the broadband development map at the county level is not technically feasible or practical, the comptroller may develop the map using a smaller geographic unit for which information is available from the Federal Communications Commission.
(d) The comptroller shall, at a minimum, display for each designated area on the broadband development map:
(1) each unserved, underserved, and served broadband serviceable location;
(2) an indication of whether each broadband serviceable location is ineligible to receive funding on account of an existing federal commitment to deploy qualifying broadband service;
(3) the number of broadband service providers that serve the designated area;
(4) an indication of whether the designated area has access to internet service that is not broadband service, regardless of the technology used to provide the service;
(5) each public school campus with an indication of whether the public school campus has access to broadband service; and
(6) the number and percentage of unserved, underserved, and served broadband serviceable locations within the designated area.
§16.22.Map Challenges; Criteria.
(a) Subject to subsection (c) of this section, a broadband service provider or a political subdivision of this state may challenge the designation of a broadband serviceable location located in this state and petition the office to reclassify the location on the broadband development map.
(b) A challenge submitted under this section must be submitted on forms and contain the information prescribed by the office. The office shall publish on its website the requirements and criteria for submitting a challenge under this section.
(c) A challenge seeking reclassification of a broadband serviceable location may only be made on the following basis:
(1) that reliable broadband service at the location is or is not available within 10 business days of a request for service;
(2) that the actual speed of the fastest available service tier at the location does or does not meet the broadband service speed thresholds as established by Government Code, §490I.0105(a);
(3) that the actual round-trip latency of broadband service at the location exceeds 100 milliseconds;
(4) that the availability of reliable broadband service at the location is subject to a data cap that results in actual speeds of the fastest available service tier falling below the broadband service speed thresholds as established by Government Code, §490I.0105(a); or
(5) that the location is or is not subject to an existing federal commitment to deploy qualifying broadband service to the location.
(d) If the comptroller adopts a map produced by the Federal Communications Commission as provided under Government Code, §490I.0105(q), a challenge may only be submitted under this section if the person or entity submitting the challenge provides evidence that the person or entity previously submitted a successful challenge to the Federal Communications Commission for the broadband serviceable locations for which the entity is seeking a reclassification.
§16.23.Challenge Process; Deadlines.
(a) A challenge under this subchapter must be submitted to the office not later than the 60th day after the broadband development map is published or updated on the comptroller's website. If the comptroller adopts a map produced by the Federal Communications Commission as provided under Government Code, §490I.0105(q), a challenge under this subchapter must be submitted not later than the 30th day after the entity seeking to challenge a location submitted a successful challenge to the Federal Communications Commission.
(b) The office may reject a challenge without further action if the challenge is not submitted on forms prescribed by the office or does not otherwise comply with this division or any criteria established by the office as provided by this subchapter.
(c) The office shall provide notice of an accepted challenge to each affected political subdivision and broadband service provider by posting notice of the challenge on the comptroller's website. For the purposes of this section, an affected political subdivision or broadband service provider shall be deemed to have received notice on the date the notice is posted on the comptroller's website.
(d) Not later than the 45th day after the date that the office posts the notice required under subsection (c) of this section, an impacted political subdivision or a broadband service provider may provide information to the office showing whether the broadband serviceable locations that have been challenged should or should not be reclassified.
(e) Not later than the 75th day after the date that the office posts the notice required under subsection (c) of this section, the office shall determine whether to reclassify the challenged broadband serviceable locations and shall update the map as necessary.
(f) In addition to the notice required under subsection (c) of this section, the office shall send written notice of the challenges that have been received under this subchapter to each political subdivision and broadband service provider that subscribes to an email distribution list managed by the office for the purpose of receiving notices from the office. Notwithstanding this subsection, the date the notice is received shall be deemed to be the date a notice issued under subsection (c) of this section is posted on the comptroller's website.
§16.24.Challenge Determinations.
(a) The office shall consider the following in making a determination of whether to reclassify a broadband serviceable location:
(1) the availability of reliable broadband service;
(2) an evaluation of actual Internet speed test and reliability data;
(3) the existence or non-existence of an existing federal commitment to deploy qualifying broadband service to a location; and
(4) any other information the office determines may be useful in determining whether a location should be reclassified.
(b) A broadband serviceable location that is classified as a served location solely because the location is subject to an existing federal commitment to deploy qualifying broadband service may be reclassified if:
(1) federal funding is forfeited or the recipient of the funding is disqualified from receiving the funding; and
(2) the location is otherwise eligible to receive funding under the program.
(c) A determination made by the office under this subsection is not a contested case for purposes of Government Code, Chapter 2001.
(d) If within one year after making an award the office determines that at the time of making the award a broadband serviceable location was not eligible to receive funding under this subchapter, the office may proportionately reduce the amount of the award and the grant recipient shall be required to return any grant funds that were awarded as a result of the classification error. Prior to making a decision to reduce the amount of the award, the office shall provide an opportunity to the award recipient to demonstrate cause for why the award should not be reduced. The office shall reduce the amount required to be returned under this subsection if the office determines, in its sole discretion, that the grant funds or any portion thereof were expended in good faith.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March 4, 2024.
TRD-202400956
Victoria North
General Counsel for Fiscal and Agency Affairs
Comptroller of Public Accounts
Effective date: March 24, 2024
Proposal publication date: October 13, 2023
For further information, please call: (512) 475-2220
34 TAC §§16.30, 16.31, 16.35 - 16.38, 16.40 - 16.42
The Comptroller of Public Accounts adopts amendments to §16.30, concerning definitions, §16.31, concerning notice of funds availability, §16.35, concerning program eligibility requirements, §16.36, concerning application process generally, §16.37, concerning overlapping applications or project areas, §16.38, concerning special rule for overlapping project areas in noncommercial applications, §16.40, concerning evaluation criteria, §16.41, concerning application protest process, and §16.42, concerning awards; grant agreement. Sections 16.30, 16.36, 16.37, 16.40 and 16.41 are adopted with changes to the proposed text as published in the October 13, 2023, issue of the Texas Register (48 TexReg 5959) and will be republished. Sections 16.31, 16.35, 16.38 and 16.42 are adopted without changes to the proposed text as published in the October 13, 2023, issue of the Texas Register (48 TexReg 5959) and will not be republished.
The comptroller renames Subchapter B as Texas Broadband Development Office, reorganizes it into two divisions, and moves all sections located in Subchapter B to Division 2 (Broadband Development Program).
The amendments to §16.30 add new definitions.
The amendments to §16.31 expand the methods by which the office may publish the required notice of funds availability.
The amendments to §16.35 make conforming changes required by Senate Bill 1238, 88th Legislature, R.S., 2023, by deleting the prohibition against making an award to a broadband service provider that does not report certain information to the office and renumbering accordingly.
The amendments to §16.36 provide the office with greater discretion to reject an application that does not comply with applicable program requirements on its face. The amendments also update the reasons for which an applicant may amend and resubmit an application after a protest has been upheld. The amendments also make conforming changes required by Senate Bill 1238, 88th Legislature, R.S., 2023, by prohibiting a broadband service provider from submitting an application protest if the provider has not provided certain information requested by the office.
The amendments to §16.37 revise and streamline the process by which overlapping project locations are resolved by removing the requirement allowing broadband service providers to collaboratively resolve project area overlaps and providing for the office to independently resolve the overlapping areas to avoid duplication. The amendments make changes to how the remaining project area is calculated after overlapping project areas are resolved by the office. The amendments also require the office to provide notice to applicants affected by the determination of the office.
The amendments to §16.38 revise the process by which overlapping project locations are resolved between applications from noncommercial broadband service providers and applications from commercial broadband service providers.
The amendments to §16.40 provide for a new process through which the office shall establish eligibility and award criteria and requires the office to provide notice of the criteria in a notice of funds availability. The amendments expand the mandatory criteria that the office must consider when establishing the eligibility and award criteria, including establishing a preference for fiber optic projects while also allowing the office to consider non-fiber optic projects for high-cost areas.
The amendments to §16.41 update the application protest process by requiring the office to publish on its website the criteria and requirements for submitting a protest. The amendments clarify the basis for which a protest may be submitted and eliminate specific documentation requirements set out by rule. The amendments provide additional notice requirements for applicants affected by a protest determination and make changes to when an affected applicant may submit an amended application if a protest is upheld.
The amendments to §16.42 clarify that the restriction on the use of grant funds only applies to grants for the deployment of broadband infrastructure.
The comptroller received comments from the following organizations, interest groups, and individuals: AT&T; Cherokee County Electric Cooperative Association ("CCECA"); City of Austin ("Austin"); GVEC; Harris County Office of Broadband ("Harris County"); The Honorable Trent Ashby; National Rural Telecommunications Cooperative ("NRTC"); Nextlink Internet; Tarana Wireless; Tekwav; Texas Cable Association ("TCA"); Texas Electric Cooperatives ("TEC"); Verizon; Texas Telephone Association ("TTA") and Wireless Internet Service Providers Association ("WISPA").
The comptroller received general comments in support of the proposed rules from organizations including Nextlink Internet, TCA, and Tarana Wireless. Nextlink Internet expressed appreciation that the proposed rules more closely aligned with the Broadband Equity, Access, and Deployment (BEAD) Program requirements, while enhancing program flexibility and maintaining technology neutrality. In addition to more specific comments, the comptroller also received general comments from TCA expressing support of the comptroller moving toward a location-based funding approach through the proposed rules. Tarana Wireless also commented favorably on the proposed rules noting that alignment with Senate Bill 1238 was a positive stride toward bridging the digital divide. Tarana Wireless specifically expressed its support for the increased discretion afforded the BDO in the application overlap process would strengthen the ability to prevent duplication. Tarana Wireless also supported the consideration of non-fiber technologies as an inclusive and pragmatic strategy that would guarantee the selection of the most suitable tools to address the broadband needs of Texans.
The comptroller received comments from CCECA that expressed concerns but were not directly focused at any specific proposed rule. CCECA raised its continuing concern with the lack of state funding being made available to providers bringing broadband to rural areas because those areas are already "locked up" due to existing funding commitments from federal programs like the Rural Digital Opportunity Fund. CCECA stated that it was notably concerned about the apparent strategy employed by some broadband providers to "lock up" areas through the use of existing federal commitments without any true plan on the part of those providers to expand service to those areas and requested that the comptroller provide more flexibility to allow state funding in those areas. While the comptroller appreciates these concerns, the statute does not allow the comptroller to award grant funding to locations that are subject to an existing federal commitment to deploy qualifying broadband service. The comptroller therefore lacks the authority to amend the proposed rules as suggested by these comments.
The comptroller received many comments regarding the proposed definitions contained in §16.30. TTA expressed its support for the proposed definition for "middle mile infrastructure" noting that the proposed definition was consistent with BEAD and excludes the provision of service to end-users. TTA also supported the proposed changes to the definition of "project area" because it focuses on individual locations and allows applicants to define their proposed project areas.
In line with its comments regarding §16.36(d), TCA requested the comptroller to change the definition of "application protest period" contained in §16.30(2) to extend the period to 45 days. The comptroller disagrees with this comment because the current 30-day period provides sufficient time to evaluate whether an application may be subject to protest. The comptroller therefore declines to make a change to the proposed definition based on this comment.
TTA provided a comment regarding the definition for "broadband serviceable location" contained in §16.30(5), remarking that the term "broadband internet service" as used in that section is not in the BDO's enabling statute and is already included in the definition of "broadband service." Therefore, TTA recommended removing the word "internet" as unnecessary. The comptroller agrees with this comment and will adopt the proposed definition with changes.
TTA also commented on §16.30(6) which outlines the definition of a "census tract" and noted that the term would no longer be used in the subchapter with the repeal of §16.33 and §16.34. Consequently, TTA recommended deletion of the term. The comptroller agrees with this comment and will delete the definition.
AT&T and TCA requested clarification regarding the meaning of "designated area" in renumbered §16.30(9) given the repeal and replacement of §16.33 in separate rulemakings and suggested revision of the definition. The comptroller agrees with these comments and adopts the proposed definition with changes.
TTA commented on the definition of "grant funds" contained in renumbered §16.30(10) noting that the concept of a designated area no longer applied in this context with enactment of Senate Bill 1238. The comptroller agrees with this comment and adopts the proposed rule with changes.
TTA urged the comptroller to expand the definition of a "served location" in §16.30(20) to include not only existing federal commitments, but also state and local commitments arguing that this proposed expansion would be consistent with BEAD guidelines. The comptroller disagrees with this comment because the comptroller is statutorily required to classify each broadband serviceable location based on access to reliable broadband service. With the exception of existing federal commitments to deploy broadband service which are statutorily prohibited from receiving program funds, the comptroller does not believe it has the authority to stretch the plain and ordinary meaning of "access" to include commitments of future availability of broadband service when determining whether a location is served or not. Therefore, the comptroller declines to amend the proposed definition based on this comment. TTA similarly urged the comptroller to replace the term "reliable broadband service" as used in that section with a newly defined term they suggested for "qualifying broadband service" that would incorporate specific speed and latency requirements. The comptroller disagrees with this comment. While the comptroller agrees with adding a definition for the term "qualifying broadband service" is warranted for the sake of clarity, adopting specific speed and latency requirements would unnecessarily restrict the flexibility of the BDO to prescribe differing thresholds based on funding source or changing needs over time. Therefore, the comptroller declines to amend the proposed definition based on this comment.
In addition to commenting on the proposed definitions, some commenters advocated for the inclusion of new definitions. Many commenters, including Representative Trent Ashby, AT&T, Austin, GVEC, Harris County, TCA, TEC, and TTA, remarked on the need for the comptroller to define what constitutes "reliable broadband service." Representative Ashby provided comments urging the comptroller to adhere to the legislative purpose of Senate Bill 1238 by following federal guidance with respect to broadband reliability and enhanced speed requirements. Likewise, GVEC, TEC and TTA requested the comptroller to harmonize its definition with federal guidelines. TEC went further, urging the comptroller to specifically exclude both satellite and unlicensed fixed spectrum from the definition of reliable broadband service. AT&T sought confirmation that the comptroller's proposed definition would be the same as that term is used in the BEAD Program's Notice of Funding Opportunity (NOFO). Austin and Harris County urged the comptroller to provide a specific definition replete with technical specifications that include broadband download/upload speeds, consistency, quality of service and latency requirements. The comptroller agrees with commenters urging the comptroller to adopt a definition for reliable broadband service that more closely harmonizes state law with federal guidance. The comptroller believes that adopting a definition for reliable broadband service that is the same as that found in the BEAD Program's NOFO is needed to fulfill and comply with the legislative purpose of Senate Bill 1238. Therefore, the comptroller adopts the proposed rule with changes to reflect the addition of a definition for "reliable broadband service."
TEC also requested the comptroller to consider inclusion of a new definition for the term "broadband." While noting that a statutory definition exists for the term, TEC opined that a definition should be included in the proposed rules. The comptroller disagrees with this comment because the proposed rules already include the statutory definition of "broadband service."
GVEC noted that the proposed rules use the term "qualifying broadband service" multiple times and suggested that the comptroller adopt a definition for the term. GVEC pointed out that existing federal programs have differing thresholds for delivering internet service and urged the comptroller to adopt a definition that is closely aligned with the higher threshold used by the federal BEAD Program. NRTC and TTA similarly suggested the utility of the comptroller adopting a definition for "qualifying broadband service." TTA offered a proposed definition that incorporates both the speed and latency requirements and the reliability standards contained in the BEAD NOFO. The comptroller appreciates the concern raised by these comments and the need for additional clarity; however, because the threshold for what constitutes qualified broadband service may be dependent on the funding source and may change over time, the comptroller does not believe adopting a defined threshold by rule is the right approach. Instead, to maintain flexibility, the comptroller believes that this threshold should be defined in each applicable Notice of Funds Availability (NOFA) issued by the office. Therefore, the comptroller will amend the proposed rule to add a definition for "qualifying broadband service" that permits the BDO to set the applicable standard as part of the criteria contained in each state-issued NOFA.
TTA also advocated for inclusion of a newly defined term "planned service commitment" for use in the context of map challenges. TTA argued that new term would allow a challenge based not only on the existence of a federal, state, or local commitment to deploy broadband service, but also on a provider's existing plans to provide reliable broadband service to the location within a reasonable time and without government grant funding. TTA further remarked that given the significant number of locations in Texas that do not have access to broadband and limited funding, that planned service commitments as defined by a newly adopted definition would prevent wasteful, duplicative spending by avoiding unnecessary funding of a location when that location would already be served using private investment. While the comptroller agrees with the goal of maximizing the expansion of broadband service and avoiding duplicative spending, the comptroller does not believe it has the authority to consider planned service because it is statutorily required to classify broadband serviceable locations based on their current access to reliable broadband service. Therefore, the comptroller declines to amend the proposed rule based on these comments.
The comptroller received several comments from TCA and TTA regarding §16.31 which provides notice requirements. TTA proposed the office make the publication of a NOFA on its website mandatory as a fundamental part of the process for consistent, fair notice to all applicants. While the comptroller agrees that consistent notice is a fundamental part of the application process, the comptroller does not believe that changing the rule to make publication on its website is necessary. The proposed rule already requires the comptroller to provide notice to interested applicants by publication in either the Texas Register or the comptroller's Electronic State Business Daily search website. Both TCA and TTA suggested that in addition to the publication requirement, the comptroller expand the methods of providing notice by requiring the BDO to provide notice through an email distribution list for interested parties. The comptroller disagrees with these comments because the comptroller's Electronic State Business Daily search website already includes the requested functionality that would allow interested parties to receive email notification of posted funding opportunities.
Both TCA and TTA also urged the comptroller to amend §16.31 to require the BDO to permit interested parties to submit comments on proposed NOFAs before they are finalized. TCA argued that many NOFA provisions are essentially rules with the same impact and effect as administrative rulemaking and therefore deserve the same public comment process. TCA opined that gathering input from interested parties would yield NOFAs that are clearer, fairer and more effective. Therefore, TCA recommended making draft NOFAs available 45-days before official issuance and allowing for informal comment for 30 days. TTA proposed a similar timeline for providing public comment, noting that the process would allow any errors to be corrected. The comptroller disagrees with comments that equate an invitation to voluntarily enter into a contract or grant agreement with rulemaking. The comptroller believes that permitting applicants to shape the grant requirements prior to issuance could prevent open and fair competition. The comptroller notes that the question-and-answer process subsequent to issuance of a NOFA already allows the BDO to provide clarification and correct any errors identified. Therefore, the comptroller declines to make a change to the proposed rule based on these comments.
The comptroller received many comments regarding the application process found in §16.36. TCA submitted a comment requesting the comptroller to consider extending the application publication and protest period found in §16.36(d) to 45 days due to the number and complexity of projects that may be involved. TCA noted that an extended timeframe would allow for more thorough and accurate protests to be made and result in avoidance of frivolous protests. The comptroller disagrees with this comment because the current proposed rules narrow the ground on which a protest may be submitted and ultimately simplify the evaluation process. Therefore, the comptroller believes the current 30-day period provides sufficient time to evaluate whether an application may be subject to protest. TTA also commented on §16.36(d), requesting that the comptroller include broadband serviceable locations among the information the BDO is required to publish on its website. The comptroller notes that its current practice is to publish summary information regarding application protests on its website together with a link that allows interested parties to review the contents of an application protest. Therefore, the comptroller does not believe a change to the proposed rule is necessary based on this comment.
TTA also commented on §16.36(f) regarding the use of the term "location" in two places which they suggested should be preceded with the term "broadband serviceable" for the sake of clarity. The comptroller agrees with this comment and will adopt the proposed rule with changes accordingly.
TCA and TTA commented that the use of the term "designated area" in §16.36(h) should be replaced with "project area" to conform with changes made in Senate Bill 1238. The comptroller agrees with these comments and will adopt the proposed rule with changes accordingly. TTA further commented that the definition of "interested party" contained in §16.36(h) should include applicants. The comptroller notes that the definition for "interested party" is very expansive and already includes a broadband service provider who proposes to provide broadband services in the project area. Therefore, the comptroller does not believe a change to the proposed rule is needed based on this comment.
The comptroller received several comments regarding new §16.36(i). TEC and CCECA supported inclusion of the requirement for broadband service providers to submit required information regarding enforceable federal commitments under Government Code, §490I.01061(b), as a prerequisite for submitting a challenge of another applicant's application. TEC further remarked that while statutory language requires a broadband service provider to submit certain information, the statute is silent as to other consequences for failure to provide that information. TEC reiterated its concerns over the apparent strategy of some broadband providers to include areas that overlap with cooperative provider territories to garner additional funding without a true plan to actually serve customers in those areas. TEC noted that as a result, those areas are "locked up" and ineligible for further funding. TEC added that the information provided under Government Code, §490I.01061 is vital to prevent gaming the system and also ensure the equitable expansion of service and allocation of funding. Therefore, TEC urged the comptroller to consider reclassifying those areas for which the comptroller does not receive the required information as eligible. The plain language of §490I.01061 prohibits the comptroller from awarding a grant to a location that is subject to an existing federal commitment and only provides for a limited exception if the federal funding is forfeited or the recipient is disqualified from receiving federal funding. Consequently, the comptroller does not have the authority to reclassify an area subject to an existing federal commitment based on noncompliance with §490I.01061 and therefore lacks the authority to amend the proposed rules as suggested by these comments.
Harris County opined that the new rule, which replaces language in repealed §16.35(c), does not make broadband service providers sufficiently accountable for their lack of compliance with requests for information under Government Code, §490I.0105 or §490I.01061. Under the previous rule, a broadband service provider that did not provide the requested information was barred from participating in the program. Harris County supported retaining language that bars noncompliant providers from participation in the program. TEC also recommended prohibiting entities that do not provide the requested information from receiving any funding from the broadband development program. CCECA echoed TEC's comments but went further by requesting that the comptroller consider a rule that would make it clear that any application submitted by a broadband service provider that does not provide the required information would be denied. The comptroller agrees with comments suggesting the comptroller has the discretion to impose sanctions for noncompliance that go beyond the limited sanction imposed by statute in which a noncomplying broadband service provider may not submit an application protest. That said, the comptroller does not have the authority to prohibit an applicant from participating in the program because the plain language of Government Code, §490I.01061 requires grant recipients to provide information regarding existing federal commitments. While the comptroller agrees with comments suggesting that a grant recipient that does not provide the required information should be subject to additional possible sanctions, the statute and rules already provide this authority. Therefore, the comptroller declines to make changes based on these comments.
The comptroller received two additional comments regarding §16.36(i). TEC advocated for greater transparency regarding existing federal commitments and recommended that the BDO should make public any information it receives regarding existing enforceable commitments. TEC noted that greater transparency regarding existing federal commitments and the timelines for deployment would assist broadband providers developing their own expansion plans and would provide consumers assurance that public funds will be appropriately leveraged. The comptroller agrees that transparency is needed to ensure that the public has information about the deployment plans of broadband service providers who have existing federal commitments. However, the comptroller notes that the requested information would already be subject to the Public Information Act. For these reasons, the comptroller declines to amend the rule based on this comment. TTA also commented on §16.36(i) requesting that the comptroller permit entities to use a representative to provide the required information. The comptroller does not believe a change to the proposed rule is necessary based on this comment because the rule does not prohibit an entity from using a third party to assist them in providing the required information.
The comptroller received several comments regarding how overlapping project areas would be deconflicted under §16.37. TTA commented generally that the rule should contain defined criteria for deciding between applicants and recommended factors such as past performance metrics, build out time frames, consumer satisfaction ratings, scalability, proven redundancy and reliability. TEC noted that using set criteria will provide transparency to the decision-making process and give applicants a sense of their standing while actively encouraging better performance by providers and rewarding those with better track records of service when separate applications contain overlapping territory. The comptroller agrees with the need for set criteria but notes under the proposed rule the deconfliction decision is not based on a subjective comparison between applicants but is instead based upon a detailed comparison of the proposed projects using the criteria contained in the applicable NOFA. Therefore, the comptroller does not believe a change to the proposed rule is needed based on this comment.
TCA commented unfavorably on §16.37(d) which gives the BDO the discretion to remove an application from consideration where area deconfliction resulted in more than half of the original project locations being removed. TCA advocated for removing this discretion in favor of allowing applicants to choose whether to proceed with a substantially reduced application. The comptroller disagrees with removing the BDO's discretion to remove an application from further consideration in circumstances where the scope of an application is substantially reduced; however, the comptroller agrees that before deciding to remove an application from further consideration the BDO should take into account whether an applicant would like to proceed with a substantially reduced application. The comptroller adopts the proposed rule with changes to require the comptroller to notify the applicant of a substantially reduced application before removal.
TTA commented on §16.37(e) recommending that the threshold for the size of an area after an overlapping location is removed should be clarified to be greater than 50 percent of the broadband serviceable locations in the original project area to make it clear that a geographic area is not being used for the calculation. The comptroller agrees with this comment and adopts the proposed rule with changes accordingly.
GVEC, TCA and TTA commented on the amendment period contained in §16.37(f). All three commenters requested that the comptroller extend the amendment period to allow applicants sufficient time to prepare and submit a revised application. While the comptroller believes 10 business days is sufficient time to submit an amended application without challenged locations as contemplated by the proposed rule, the comptroller recognizes that there may be circumstances in which additional time may be required. Therefore, the comptroller is withdrawing the proposed change that would make removing an application from consideration obligatory to allow the comptroller the discretion to extend the required deadline on a case-by-case basis.
In line with comments GVEC provided regarding §16.37(f), GVEC requested the comptroller to consider extending the amendment deadlines contained in §16.38(b). TTA also commented on §16.38 noting that the time required for noncommercial applicants to amend their applications to eliminate overlapping locations should be extended to 30 calendar days. The comptroller disagrees with this comment because it believes 10 business days is sufficient time to resubmit an application without overlapping locations. In addition, the current rule provides the necessary flexibility for the comptroller to extend the required deadline on a case-by-case basis because it permits, but does not require, the BDO to remove an application from consideration if the deadline is not met. As previously outlined in its response to comments regarding §16.37(f), the comptroller is withdrawing the proposed change to §16.37(f) to retain this flexibility. Finally, because the comptroller has not proposed amendments to that rule the comment is outside the scope of the current rulemaking. Therefore, the comptroller declines to make changes based on this comment.
The comptroller received many comments regarding the evaluation criteria contained in §16.40.
TTA commented that the term "broadband service" as used in §16.40(a) should be updated to be "qualifying broadband service" to be consistent with the objectives of the statute. TTA also recommended inclusion of specific, higher speed and latency requirements that should be applicable to applications that expand access to broadband in schools because, in their opinion, the preference was intended to be given to broadband service that is faster than qualifying broadband service to schools. The comptroller disagrees with these comments because the rule language closely follows the applicable statutory language, and the comptroller may not restrict a mandatory preference established by the legislature. Therefore, the comptroller declines to make a change to the proposed rule based on these comments.
TCA also commented that the language contained in §16.40(a)(3) afforded the BDO too much discretion to set speed, latency, reliability, consistency, scalability, and related criteria outside of rule noting that this negatively impacted certainty and confidence in the process. TCA therefore urged the comptroller to limit the criteria the office may consider to criteria established by rule. The comptroller disagrees with this comment. The text of the proposed rule mirrors the statutory language contained in Senate Bill 1238 which contemplates the need for the comptroller to establish applicable criteria in notices of funding availability. For this reason, the comptroller declines to make changes to the proposed rule based on this comment.
TCA and TTA commented generally on the use of the term "designated area" throughout §16.40(b) and recommended updating where needed to align with changes made in Senate Bill 1238. The comptroller disagrees with this comment as it relates to §16.40(b)(5). In that section, the rationale for using the term designated area (county) remains notwithstanding the map changes resulting from Senate Bill 1238, i.e., assessing the impact of a proposed project in a designated area. However, the comptroller agrees with this comment as it relates to §16.40(b)(6) and (8) and adopts the proposed rule with changes.
Several commenters including AT&T, TCA, TEC, and TTA commented on the evaluation criteria contained in §16.40(b). TEC commented that, given the underlying policy goal of delivering high speed internet and increasing coverage of reliable internet service across the state, it makes little sense to not make delivery of highspeed internet a mandatory consideration when evaluating a project for award. TEC therefore recommended making speed considerations a mandatory provision under subsection (a). The comptroller notes that the purpose of subsections (a) and (b) is to respectively outline the statutorily imposed criteria that the BDO must prioritize during the application evaluation process and the criteria for which the comptroller may provide a preference. The inclusion of broadband transmission speeds in §16.40(b)(2) is not intended to provide a preference for meeting required minimum broadband service speeds but instead to provide notice that the BDO may give a preference to applications in which the technical specifications exceed the required minimum. Therefore, the comptroller does not believe a change to the proposed rule is needed based on this comment.
TCA commented that §16.40(b)(5) should be amended to allow the prioritization to be based on the proportion of unserved and underserved locations in a proposed project area and not the proportion in the designated area (county) in which the project is located. The comptroller disagrees with this comment because the preference is intended to measure the cost effectiveness and impact of a proposed project - in this case the proportion of locations to be served by the project compared to the number of serviceable locations within the designated area(s) measures the percentage of increased coverage in the designated area. For this reason, the comptroller declines to make a change to the proposed rule based on this comment.
TCA strongly opposed inclusion of renumbered §16.40(b)(7) which permits the BDO to consider community, non-profit, or cooperative involvement or participation in a project. TCA observed that the enabling statutes do not contain such a preference and argued that inserting a preference for non-commercial projects runs contrary to the intent to prioritize commercial providers. As an alternative to repeal, TCA advocated for amending the rule to clarify that it reflects community "support" for a project rather than "involvement" in a project. The comptroller respectfully disagrees with the comment that a consideration of community participation conflicts with the commercial provider preference established by Government Code, §490I.0106(d)(2). The commercial provider preference is limited to a mandatory priority between commercial and noncommercial provider applications seeking funding for the same broadband serviceable locations. It neither requires the comptroller to provide a global preference for commercial provider applications, nor prohibits the comptroller from establishing additional, non-conflicting preferences. The comptroller believes local community participation and support of an application is a non-conflicting preference and is an important factor to consider when evaluating applications. Such participation is evidence that a proposed project considers the particular, local community broadband needs and is ostensibly designed to best meet the needs of the area. Therefore, the comptroller declines to repeal the proposed rule as recommended. However, the comptroller agrees with the suggestion that the rule should be clarified to also allow the comptroller to consider community support in addition to active community participation as a criterion. The comptroller will adopt the proposed rule with changes based on this comment.
AT&T commented that under §16.40(b)(8) it is unclear how affordability will be measured and how such a measurement will impact a provider's application. They further noted that the proposed rule provides no affordability standards upon which such a measurement would be based and cautioned that providing a better preference score for "affordability" based on lower rates may be considered, for all practical purposes, a form of rate regulation, which is not permitted on broadband services. The comptroller disagrees with the comment that providing a preference based on affordability is a form of rate regulation. As noted previously, participation in the grant program is entirely voluntary and setting a condition for receipt of a grant is not rate regulation. The comptroller notes that §16.40 merely provides notice of the factors the comptroller may include and provide a preference for in each applicable notice of funds availability. As such, the rule is not intended to either establish affordability standards or provide a definitive measure of how affordability will be measured. Instead, as contemplated by statute, those considerations, if applicable, will be left for each state-issued NOFA. Accordingly, the comptroller does not believe a change to the proposed rule is needed based on this comment.
AT&T raised similar concerns regarding affordability with respect to §16.40(b)(9) noting that preferences relating to consumer pricing could become a form of rate regulation. TCA also commented that care must be taken to avoid rules that morph preferences into price regulation. While acknowledging that evaluating affordability is an acceptable objective for the program, TCA reiterated its comments regarding Government Code, §490I.0103, which prohibits the comptroller from regulating broadband service providers. TCA further expounded on this theme, referencing Utilities Code, §52.002(d), which prohibits the state from directly or indirectly regulating the rates charged for any broadband-enabled service. TCA noted that courts have held in related contexts that statutory prohibitions against rate regulation apply where a state either (1) specifies the rates that must be charged for specific levels of service or (2) freezes prices or restricts providers from adjusting rates in certain ways. Consequently, TCA argued that adoption of any specific price point or setting any sort of price cap would amount to impermissible rate regulation under both analyses. Further, TCA recommended that the comptroller align any evaluation of affordability with the Affordable Connectivity Program, a federal subsidy program aimed to assist eligible households afford internet service, and to permit applicants to specify their own framework to meet affordability requirements. The comptroller disagrees with these comments to the extent that they suggest that the comptroller may not by rule establish a preference that considers affordability because doing so is, in effect, indirect rate regulation. The comptroller notes that the proposed rule neither sets specific rates that must be charged for specific levels of service nor sets a price cap. Further, the comptroller reiterates that participation in the broadband development program is voluntary and that setting a condition for receiving a grant through the program cannot be considered rate regulation. For these reasons, the comptroller declines to make changes to the proposed rule based on these comments.
TCA argued against §16.40(b)(12) which it believes provides the comptroller virtually unlimited discretion to apply preferences to application based on its own determinations. TCA suggested this language is unnecessarily redundant and would leave applicants without certainty or guardrails as to how proposals will be evaluated. They further suggested that if additional factors are to be considered, stakeholders should be given the opportunity to provide comments prior to issuance of a NOFA. The comptroller disagrees that the discretion provided by §16.40(b)(12) is unfettered. The proposed rule limits the discretion of the BDO to apply preferences based on its own determinations by requiring the office to publish criteria in a NOFA. And contrary to the assertion that the proposed rule will result in uncertainty as to how proposals will be evaluated, the publication requirement provides applicants with notice of the evaluation criteria the office will use. Finally, the comptroller does not agree with the suggestion that stakeholders should be given the opportunity to provide comments prior to issuance of a NOFA. The comptroller believes that permitting stakeholder participation may act to prevent open and fair competition by allowing potential grant recipients to participate in drafting grant requirements prior to issuance. The comptroller believes that the question and answer process following the issuance of a NOFA already allows stakeholders to request clarification as to how proposals will be evaluated. For these reasons, the comptroller declines to make changes based on this comment.
The comptroller received several comments regarding §16.40(c) including comments from TCA, Tekwav, Verizon and WISPA. TCA disfavored adoption of a rule that allows consideration of alternative technologies that are proposed for high-cost areas and that may be deployed at a lower cost than fiber technology. TCA noted that under this provision there would be no definition for a high-cost area that would constrain the section. TCA also pointed out that federal programs do not require or encourage non-fiber projects and evidence a clear intent to support fiber-based projects. TCA further argued that adoption of a high-cost threshold would harm the ability of the BDO to maximize fiber deployment. Therefore, TCA encouraged the comptroller to coordinate the use of state funds with the federal BEAD program by pursuing a fiber-only goal for state funds and leaving non-fiber technology to be available only through the BEAD program for areas above the extremely high-cost threshold established under that program.
Contrarily, Verizon, Tekwav and WISPA supported adoption of §16.40(c). Verizon noted the importance of the rule in ensuring different technologies be employed to provide broadband coverage in Texas. WISPA recognized the proposed rule as a first step in preserving the BDO's ability to consider the benefits of these alternative technologies without sacrificing the prioritization of fiber projects. WISPA extoled the benefit of preserving the flexibility to consider alternative technologies, noting that fixed wireless could be built at a fraction of the capital costs over a shorter time span. However, these commenters suggested that the proposed rule should be expanded to fully meet the directives set out in Senate Bill 1238. Verizon commented that the proposed language fails to fully comport with Senate Bill 1238 because the proposed rule only allows an alternative technology application to be considered if it is both for a high-cost area and offered at a lower cost than fiber whereas the statutory language is written disjunctively. All three commenters also observed that the statutory language contemplates the use of alternative technologies where, in addition to being proposed for a high-cost area and available at a lower cost, the technologies also meet the technical criteria established by the office including speed, latency, reliability, consistency, and scalability. Therefore, these commenters recommended enumerating and including in the rule the criteria outlined in the statute that would further expand the office's scope to appropriately consider fiber alternatives.
The comptroller appreciates the important viewpoints raised in these comments. The comptroller respectfully disagrees with TCA's suggestion that the comptroller should not adopt §16.40(c). While Senate Bill 1238 establishes a clear mandate for fiber-based projects, it also contemplates the need to consider non-fiber projects and gives the comptroller the flexibility to consider alternative technologies in the appropriate circumstances. As other commenters observed, Texas is a large state with large swaths of rural land that make it hugely challenging to implement fiber connectivity. This difficulty necessitates the need to consider other types of technology capable of delivering high-speed and affordable broadband service. Therefore, the comptroller agrees with commenters who supported the proposed rule as preserving the ability to consider the benefits of alternative technologies in appropriate circumstances without sacrificing the prioritization of fiber projects. Similarly, the comptroller believes that pursuing, as TCA suggests, a fiber-only strategy for state funds runs counter to the legislative intent to prioritize but not mandate fiber-based projects where a proposed project fulfills the circumstances contemplated by the legislature. The comptroller also agrees with commenters who urged the comptroller to more closely adhere to the statutory language and expand the flexibility to appropriately consider fiber alternatives. The comptroller adopts the proposed rule with changes to correct the conjunctive language used in the proposed rule and more closely track the statutory language regarding the technical criteria the office may prescribe to consider fiber alternatives.
TCA also advocated for the comptroller to replace the proposed §16.40(c) with a new rule to ensure that no eligibility criteria would be indirectly used to regulate the rates, terms, and conditions for broadband service offerings in a project area. TCA strongly expressed its opinion that the legislature has been clear that the BDO should not be an avenue for increased broadband regulation and urged the comptroller to adopt a rule that explicitly states its intent not to engage in regulation. The comptroller appreciates TCA for raising this important issue. The comptroller agrees that Government Code, §490I.0103, makes clear that the comptroller is not granted the authority to regulate broadband service and broadband service providers; however, for the reasons previously discussed, the comptroller does not believe that the setting of evaluation criteria for the receipt of grant funds either directly or indirectly regulates the rates, terms, and conditions for broadband service offerings because participation in the program is voluntary. The comptroller is entitled to set evaluation criteria for the application for public funds and broadband service providers are entitled to seek public funds if they are willing to be evaluated by those criteria. Broadband service providers who do not seek to fund projects with taxpayer dollars are in no way regulated by conditions outlined by the BDO within a NOFA. Because nothing in the rules purports to broadly regulate broadband services or broadband service providers and the statute is unambiguous that the comptroller is not granted such authority, the comptroller does not believe that it needs to clarify its intent to refrain from unauthorized industry regulation.
The comptroller also received comments from TCA and TTA regarding §16.41. TCA urged the comptroller to amend §16.41(a) to add pre-existing service as a basis for submitting an application protest to avoid spending limited resources to overbuild existing service. TCA also commented that the comptroller should amend the proposed rule to make clear that, in addition to the existence of federal commitments, challenges may also be submitted due to pre-existing state and local commitments to expand broadband service to a location. TTA also agreed that the comptroller should allow challenges based on pre-existing state and local commitments. TTA advocated for modifying the term "existing federal commitment" to encompass both state and local commitments to reduce wasted funding on locations that would be served by other means. In addition, TTA also recommended adding to the concept of federal, state, or local commitments to include private planned service commitments. TTA reiterated its comments regarding adding a new definition for "planned service commitment" that would allow a challenge based on another provider's existing plans to provide qualifying broadband service within a reasonable time to the location as indicated in construction contracts or similar documents or permits showing ongoing deployment, or as indicated in contracts or a similar binding agreement. While the comptroller agrees with the goal of avoiding duplicative spending, the comptroller disagrees with recommendations to allow interested parties to use application challenges for that purpose. For example, TCA urged the comptroller to add pre-existing service at a location as a basis for protest but the question of whether a broadband serviceable location is served or unserved is already subject to challenge through the map challenge process. The comptroller similarly disagrees with comments urging the comptroller to amend the rule based on state or local commitments and planned service. The comptroller is statutorily required to classify each broadband serviceable location based on its current access to reliable broadband service. Except for existing federal commitments to deploy broadband service which are statutorily prohibited from receiving program funds, the comptroller does not believe it has the authority stretch the plain and ordinary meaning of "access" to include promises or commitments of future availability of broadband service within that meaning. Therefore, the comptroller declines to amend the proposed rule based on these comments.
TCA also requested that the comptroller amend the language in §16.41(a)(3) to clarify that challenges may be raised based on criteria prescribed either by rule or in a NOFA. The comptroller agrees with this comment and adopts the proposed rule with changes accordingly.
The comptroller received comments from GVEC and TCA proposing that the comptroller amend §16.42(a) to extend the timeline to sign the grant agreement due to the complexity of the documents and factors that may be outside the control of the grant recipient. The comptroller does not believe extending the completion time across the board is warranted and notes that the rule currently permits the BDO to extend the deadline to fully execute the grant agreement on a case-by-case upon a showing of good cause by a grant recipient. Therefore, the comptroller declines to amend the proposed rule based on these comments.
TCA commented that §16.42(b) reflects language in Government Code, §490I.01069(h) which provides that awards may only be used "for capital expenses, purchase or lease of property, and other expenses, including backhaul and transport, that will facilitate the provision or adoption of broadband service." TCA requested, however, that explicitly including labor and make-ready costs in the list of allowable expenses would provide helpful certainty. The comptroller disagrees with this comment. The comptroller does not believe a change to the proposed rule is necessary because the cost accounting standards applicable to grants are dependent on the funding source and will be addressed in the applicable grant agreements. Accordingly, the comptroller declines to make changes to the proposed rule based on this comment.
TTA submitted a comment regarding §16.42(b) in which it reiterated its comments regarding usage of the term "broadband service" which it argued should be adjusted to its proposed definition for "qualifying broadband service." For the reasons previously discussed, the comptroller does not agree with this comment and declines to make changes to the proposed rule based on this comment.
The amendments are adopted under Government Code, §490I.0109, which permits the comptroller to adopt rules as necessary to implement Chapter 490I regarding the Texas Broadband Development Office.
The amendments implement Government Code, Chapter 490I.
§16.30.Definitions.
As used in this subchapter and in these rules, the following words and terms shall have the following meanings, unless the context clearly indicates otherwise:
(1) Applicant--A person that has submitted an application for an award under this subchapter.
(2) Application protest period--A period of at least thirty days beginning on the first day after an application is posted under §16.36(d) of this subchapter.
(3) Broadband development map--The map adopted or created under Government Code, §490I.0105.
(4) Broadband service--Internet service that delivers transmission speeds capable of providing:
(A) a download speed of not less than 25 Mbps; or
(B) an upload speed of not less than three Mbps; and
(C) network round-trip latency of less than or equal to 100 milliseconds based on the 95th percentile of speed measurements.
(5) Broadband serviceable location--A business or residential location in this state at which broadband service is, or can be, installed, including a community anchor institution.
(6) Census block--The smallest geographic area for which the U.S. Bureau of the Census collects and tabulates decennial census data as shown on the most recent on Census Bureau maps.
(7) Commercial broadband service provider--A broadband service provider engaged in business intended for profit, a telephone cooperative, an electric cooperative, or an electric utility that offers broadband service or middle-mile broadband service for a fare, fee, rate, charge, or other consideration.
(8) Community anchor institution--An entity such as a school, library, health clinic, health center, hospital or other medical provider, public safety entity, institution of higher education, public housing organization, or community support organization that facilitates greater use of broadband service by vulnerable populations, including, but not limited to, low-income individuals, unemployed individuals, children, the incarcerated, and aged individuals.
(9) Designated area--A census block or other area as determined under §16.21 of this subchapter.
(10) Grant funds--Grants, low-interest loans, and other financial incentives awarded to applicants under this subchapter for the purpose of expanding access to and adoption of broadband service.
(11) Grant recipient--An applicant who has been awarded grant funds under this subchapter.
(12) Mbps--Megabits per second.
(13) Middle mile infrastructure--Any broadband infrastructure that does not connect directly to an end-user location, including a community anchor institution. The term includes:
(A) leased dark fiber, interoffice transport, backhaul, carrier-neutral internet exchange facilities, carrier-neutral submarine cable landing stations, undersea cables, transport connectivity to data centers, special access transport, and other similar services; and
(B) wired or private wireless broadband infrastructure, including microwave capacity, radio tower access, and other services or infrastructure for a private wireless broadband network, such as towers, fiber, and microwave links.
(C) The term does not include provision of Internet service to end-use customers on a retail basis.
(14) Non-commercial broadband service provider--A broadband service provider that is not a commercial broadband service provider.
(15) Office--The Broadband Development Office created under Government Code, §490I.0102.
(16) Project area--The area, consisting of one or more broadband serviceable locations, identified by an applicant in which the applicant proposes to deploy broadband service or middle mile infrastructure.
(17) Public school--A school that offers a course of instruction for students in one or more grades from prekindergarten through grade 12 and is operated by a governmental entity.
(18) Qualifying broadband service--Broadband service that meets the minimum speed, latency and reliability thresholds prescribed by the office in each applicable notice of funds availability.
(19) Reliable broadband service--Broadband service that is accessible to a location via:
(A) fiber-optic technology;
(B) Cable Modem/ Hybrid fiber-coaxial technology;
(C) digital subscriber line (DSL) technology; or
(D) terrestrial fixed wireless technology utilizing entirely licensed spectrum or using a hybrid of licensed and unlicensed spectrum.
(20) Served location--A broadband serviceable location that has access to reliable broadband service that exceeds the minimum threshold for an underserved location or a location that is subject to an existing federal commitment to deploy qualifying broadband service.
(21) Underserved location--A broadband serviceable location that has access to reliable broadband service but does not have access to reliable broadband service with the capability of providing:
(A) a download speed of not less than 100 Mbps;
(B) an upload speed of not less than 20 Mbps; and
(C) a network round-trip latency of less than or equal to 100 milliseconds based on the 95th percentile of speed measurements as established under Government Code, §490I.0101.
(22) Unserved location--A broadband serviceable location that does not have access to reliable broadband service.
§16.36.Application Process Generally.
(a) No award for competitive grant funding will be disbursed by the office except pursuant to an application submitted in accordance with this subchapter.
(b) An application for funding under this subchapter shall be submitted on the forms and in the manner prescribed by the office. The office may require that applications be submitted electronically.
(c) Prior to publication of application information pursuant to Government Code, §490I.0106(e), the office may undertake an examination to determine whether the application appears on its face to comply with applicable program requirements. The office may reject and take no further action on an application that does not appear to comply with applicable program requirements on its face.
(d) The office shall for a period of at least 30 days publish on its website information from each accepted application, including the applicant's name, the project area targeted for expanded broadband service access or adoption by the application, and any other information the office considers relevant or necessary. The information will remain on the website for a period of at least 30 days before the office makes a decision on the application.
(e) During the 30-day application protest period described by subsection (d) of this section for an application, the office shall accept from any interested party a written protest of the application relating to whether the applicant or project is eligible for an award or should not receive an award based on the criteria prescribed by the office. A protest of an application must be submitted as provided under §16.41 of this subchapter.
(f) Notwithstanding any deadline for submitting an application, if the office upholds a protest on the grounds that one or more of the broadband serviceable locations in a project area is not eligible to receive funding, the applicant may resubmit an amended application as provided under §16.41 of this subchapter without the challenged broadband serviceable locations not later than 30 days after the date that the office upheld the protest. An amended application may not include additional areas or broadband serviceable locations not already included in the original application.
(g) If the office upholds a protest and the applicant resubmits an application in accordance with subsection (f) of this section, the resubmitted application is not subject to further protest.
(h) For the purposes of this section "interested party" means a person, including an individual, corporation, organization, government or governmental subdivision or agency, business trust, estate, trust, partnership, association, or any other legal entity, that resides, is located, or conducts business in the project area subject to protest and also includes a broadband service provider that is not located in the project area but who proposes to provide broadband service in the project area.
(i) Notwithstanding subsection (e) of this section, a broadband service provider who has not provided information requested by the office under Government Code, §490I.0105 or §490I.01061, may not submit a protest of an application made under this subchapter.
§16.37.Overlapping Applications or Project Areas.
(a) Except as provided under §16.38 of this subchapter, if at the close of the application period the office has received multiple applications that propose to provide broadband service to the same broadband serviceable locations, the office shall, prior to publishing information regarding the applications as required by §16.36 of this subchapter, resolve the overlapping areas to ensure that the award of grant funds are not duplicated for a broadband serviceable location.
(b) The office shall resolve overlapping applications; by evaluating each impacted application independently; and the office shall:
(1) score each impacted application and the application receiving the highest score shall proceed to grant funding consideration with its project area locations intact; and
(2) remove the overlapping project locations from the lower scored applications and provide notice to the impacted applicants that the overlapping project locations have been removed from the application.
(c) The office shall provide notice of a determination made by the office under subsection (b) of this section to each affected applicant including notice of the right, if any, to submit an amended application under subsection (e) of this section.
(d) If removing overlapping project locations as provided under subsection (b) of this section results in the application retaining less than 50% of the broadband serviceable locations originally proposed for the project area, the office shall contact the applicant to determine whether the applicant wants to proceed with a substantially reduced application and the office shall take into account this preference when determining whether to remove the application from further consideration. The office may, notwithstanding the preference of an applicant to proceed with a substantially reduced application, at its sole direction, remove the application from grant funding consideration.
(e) If the office removes an overlapping location from an application, an applicant may amend and resubmit an application without the overlapping location if:
(1) The remaining number of broadband serviceable locations in the project area is greater than 50% of the broadband serviceable locations originally proposed for the project area; or
(2) The remaining number of locations in the application is less than 50% of the broadband serviceable locations originally proposed for the project area and the application has not been removed from grant funding consideration under subsection (d) of this section.
(f) If an amended application without the overlapping locations is not received by the office by the 10th business day after an applicant receives notice that it may amend its application under subsection (c)(2) of this section, the office may remove the application from grant funding consideration.
§16.40.Evaluation Criteria.
(a) The office shall establish the eligibility and award criteria applicable for each round of competitive grant funding by publishing the criteria in a notice of funds availability as provided by §16.31 of this subchapter. In establishing eligibility and award criteria, the office shall:
(1) prioritize applications that expand access to and adoption of broadband service in designated areas in which the highest percentage of broadband serviceable locations are unserved or underserved locations;
(2) prioritize applications that expand access to broadband service in public and private primary and secondary schools and institutions of higher education;
(3) prioritize applications that connect end-user locations with end-to-end fiber optic facilities that meet speed, latency, reliability, consistency, scalability, and related criteria as the office shall determine;
(4) give preference to applicants that provide the information requested by the office under Government Code, §490I.0105 and §490I.01061; and
(5) take into consideration whether an applicant has forfeited federal funding for defaulting on a project to deploy qualifying broadband service.
(b) In addition to the evaluation criteria provided under subsection (a) of this section, the office may include and provide preferences for the following evaluation criteria in the notice of funds availability:
(1) application participant(s) experience;
(2) technical specifications including broadband transmission speeds (Mbps upload and download) that will be deployed as a result of the project;
(3) estimated project completion date;
(4) the availability of matching funds including amount, percentage, and source of matching funds;
(5) cost effectiveness and overall impact as measured by the total project cost, the total number of prospective broadband service locations to be served by the project, the proportion of unserved and underserved locations to be served by the project compared to the number of serviceable locations within the designated area(s) the project is located, the proportion of recipients to be served by the project compared to the population of the designated area(s) in which the project is located, and the project cost per prospective broadband service recipient;
(6) geographic location including, but not limited to, rural areas where because of population density the cost of broadband expansion is characterized by disproportionately high capital and operational costs;
(7) community, non-profit, or cooperative support or participation in the project;
(8) affordability of broadband services in the areas in which the proposed project is located prior to the deployment of broadband services as a result of the project;
(9) consumer price of broadband services that applicant proposes to deploy as a result of the project;
(10) participation in federal programs that provide low-income consumers with subsidies for broadband services;
(11) small business and historically underutilized business involvement or subcontracting participation; and
(12) any additional factors the office may determine are necessary to further the expansion and adoption of broadband service.
(c) Notwithstanding subsection (a)(3) of this section, the office may consider an application for a broadband infrastructure project that does not employ end-to-end fiber optic facilities if the use of an alternative technology:
(1) is proposed for a high-cost area;
(2) may be deployed at a lower cost than deploying fiber optic technology; or
(3) meets the speed, latency, reliability, consistency, scalability, and related criteria as the office shall determine for each applicable notice of funds availability.
§16.41.Application Protest Process.
(a) The office shall publish on the office's website criteria and requirements for submitting a challenge under this section. An application protest may only be made on the following basis:
(1) the applicant is ineligible to receive an award;
(2) the application contains broadband serviceable locations that are not eligible to receive funding because of an existing federal commitment to deploy qualifying broadband service to the location; or
(3) the project is ineligible to receive or should not receive an award based on the criteria prescribed by the office as provided by §16.40(a) of this subchapter.
(b) A protest submitted under this section shall be submitted electronically in the manner and on the forms prescribed by the office and shall be accompanied by all relevant supporting documentation. The protesting party bears the burden to establish that an applicant or project should not receive or is ineligible for an award based on the criteria prescribed by the office.
(c) The office shall review the protest and make a determination as to whether the protest should be upheld. The office shall provide notice of its determination to each affected applicant, including the right, if any, to submit an amended application under subsection (d) of this section.
(d) If the office upholds a protest on the basis that one or more broadband serviceable locations are not eligible to receive funding under the criteria prescribed by the office, an applicant may amend and resubmit an application without the challenged locations and re-scope the application or project area if, after the protest is upheld:
(1) the remaining number of broadband serviceable locations in the project area is greater than 50% of the original number of locations in the project area; or
(2) the remaining number of broadband serviceable locations in the project area is less than 50% of the original number of locations in the project area and the office permits, at its sole discretion, the applicant to amend the application.
(e) If an amended application without the challenged locations is not received by the office by the 30th day after receiving notice of the determination under subsection (c) of this section, the office may remove the application from grant funding consideration.
(f) A determination made by the office under this section is not a contested case for purposes of Government Code, Chapter 2001.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March 4, 2024.
TRD-202400957
Victoria North
General Counsel for Fiscal and Agency Affairs
Comptroller of Public Accounts
Effective date: March 24, 2024
Proposal publication date: October 13, 2023
For further information, please call: (512) 475-2220
The Comptroller of Public Accounts adopts the repeal of §16.33, concerning designated area eligibility, and §16.34, concerning designated area reclassification, without changes to the proposed text as published in the October 13, 2023, issue of the Texas Register (48 TexReg 5963). The rules will not be republished.
The comptroller will adopt new §16.21, concerning the broadband development map, §16.22, concerning map challenges and criteria, §16.23, concerning the challenge process and deadlines, and §16.24, concerning map challenge determinations, in a separate rulemaking to replace §16.33 and §16.34. These new sections will implement changes to Government Code, §490I.0109, made by Senate Bill 1238, 88th Legislature, R.S. 2023, and will be located in Subchapter B, in new Division 1 (Broadband Development Map).
The comptroller also renames Subchapter B as Texas Broadband Development Office.
The comptroller received a single comment from the Texas Cable Association expressing support for the repeal and replacement of §16.33 and §16.34.
The repeals are adopted under Government Code, §490I.0109, which permits the comptroller to adopt rules as necessary to implement Chapter 490I regarding the Texas Broadband Development Office.
The repeals implement Government Code, Chapter 490I.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March 4, 2024.
TRD-202400955
Victoria North
General Counsel for Fiscal and Agency Affairs
Comptroller of Public Accounts
Effective date: March 24, 2024
Proposal publication date: October 13, 2023
For further information, please call: (512) 475-2220