We now know the next BEAD fight, and it might be the biggest fight yet. On September 5, NTIA issued a press release talking about the progress of the Benefit of the Bargain round for States to award BEAD funding. The press release announced that 36 of 56 States and Territories have made tentative BEAD awards and have submitted their final proposals to NTIA.

The header of the Press Release is that “Plans include broad range of technologies and save American taxpayers at least $13 billion”. The Press Release went on to say, “In the plans submitted today, states are already projecting savings of at least $13 billion for American taxpayers”.

The $13 million referenced by NTIA is the difference between the funding allocated to each state for BEAD and the amount being awarded to BEAD grants. According to the IIJA legislation that created BEAD, any funds not spent on infrastructure were to remain with the States to pursue other activities related to improving broadband. The legislation included some specific examples related to activities that promote the adoption and meaningful use of high-speed internet, including workforce development, digital literacy training, subsidies for internet-capable devices, telehealth initiatives, and the installation of Wi-Fi in multi-unit residential buildings. States were free to propose other ideas, and many have.

When NTIA issued the new rules for making BEAD grants in June, the agency said that funding for non-deployment funds was under review. It’s now pretty clear that NTIA plans not to expend the non-deployment funds and take credit for saving the expenditure for the U.S. Treasury.

The $13 billion number will grow. That amount comes from the States that have already submitted final plans. If the same ratio of non-deployment funds holds for the remaining states, then the amount of non-deployment will be around $25 billion. There are ten States where the non-deployment funds are more than $500 million, led by North Carolina at $1.1 billion and Georgia at $1 billion. The others include Arkansas, Kentucky, Louisiana, Mississippi, Ohio, Tennessee, Virginia, and West Virginia. Interestingly, the amount of non-deployment funding grew significntly when NTIS stressed making BEAD awards to satellite technology.

I describe this as a fight because States aren’t going to easily let this funding go. First, States have worked hard to reach consensus for specific plans for using the non-deployment funds. As an example, West Virginia plans to use non-deployment funds to create a database of utility poles in the state, to update security on the State’s own network, to award grants for expanding rural cell towers, and for training programs for technical jobs in the telecom sector. These are typical of the plans in other States and all work to further broadband deployment.

States are also unhappy about the NTIA statement because the funds were directed by Congress, and States believe they are entitled to the non-deployment funds. Louisiana Gov. Jeff Landry sent a letter to Commerce Secretary Howard Lutnick this week that emphasized that the non-deployment funds belong to the State. In Louisiana, the non-deployment funds are in the range of $850 million.

It’s not hard to imagine a coalition of State Attorneys General from red and blue states together suing NTIA to get the non-deployment funds. There are similar lawsuits underway for withheld funding for healthcare and education.

The bottom line is that a lawsuit might be inevitable. NTIA statements make it clear that it wants to claim the savings by keeping the non-deployment funds, and there are States that are likely not going to let the funds go without a fight. But maybe there is a compromise somewhere in the middle.