North Carolina, where I live, recently announced its preliminary awards for BEAD. The State has allocated $408.5 million for preliminary BEAD awards out of an allocation of BEAD money to the State of $1.5 billion. That leaves an astounding $1.1 billion on the table and likely unspent. There is some hope that the unspent money, referred to as non-deployment funds, will be at least partially available to the State for broadband-related activities. But that possibility seems to be dwindling every day.

The State had to cover 93,138 homes and 374 community anchor institutions with the BEAD funds. The State made awards to build fiber to 68% of the locations, to deploy cable or fixed wireless to 2% of locations, and to subsidize low-orbit satellite providers for the remaining 30% of locations.

Now that the awards have been announced, we can finally see the proposed BEAD areas by location and technology. I live in Western North Carolina, that was devastated a year ago by Hurricane Helene. There was a lot of hope in this part of the state that most of the awards would go to fiber. The State mostly did okay for Western North Carolina. Of the 29,400 BEAD-eligible locations in this part of the state, over 24,000 went to ISPs who promise to build fiber, leaving 5,300 locations that will get awards for low-orbit satellite. Most of the satellite funding in the State went to Kuiper, which got $15.9 million out of the $18.3 million awarded to satellite. People here are scratching their heads, wondering why a company with only a hundred satellites is being awarded grant funding.

But now that the funding for satellite has sunk in, I’m starting to see what this means for Western North Carolina. First, there are five counties where satellite was awarded to all of the eligible BEAD locations – Clay, Madison, Mitchell, Polk, and Yancey.

What do County officials in those counties tell people? NTIA is giving money mostly to Kuiper and some to Starlink to be able to offer them satellite broadband. All of the BEAD-eligible locations in these counties can already buy satellite broadband from Starlink. The only benefit of BEAD for these residents is that they will probably get a free receiver for enrolling as a BEAD customer. Any hope these counties had of filling in the map with fiber is now gone.

There may be future broadband grants. For example, USDA is planning a new round of ReConnect grants. But even if we assume that ReConnect can be used to cover areas served by satellite, ReConnect won’t make a big dent in areas given satellite from BEAD. So far, with 45 states reporting preliminary BEAD results, the two satellite companies have been awarded $707 million in BEAD. That’s a lot of locations nationwide, and the number is likely going to grow significantly before BEAD grants are final.

It was understood from the time that the BEAD rules were adopted by Congress that there would have to be some remote locations that can’t be reached with fiber. But nobody thought it would be nearly as many as we are seeing. The BEAD grants were originally going to award $45.5 billion in grants, but it now looks like the actual awards will be less than half of that amount.

In North Carolina, a lot of the 5,300 locations in Western North Carolina could have gotten fiber if the state had been able to use more of the $1.1 billion it will be returning to Treasury. I fully understand the desire to be cost-conscious with federal funding, but BEAD was intended by Congress to be a once-in-a-generation opportunity to build long-term broadband infrastructure for a lot of rural America. I always assumed that the BEAD emphasis on fiber first would have meant that States would be judged for the whole portfolio of grants being awarded, and wouldn’t shy from awarding BEAD for areas where construction costs are higher than average.

I have to mention that the proposed grant awards are far from final. I’ve heard from multiple States that NTIA is now asking them to either reduce the amount of funding for some grants or reassign the money to somebody else. That likely will mean even more locations will go to satellite by the time the dust settles and the BEAD grants are final.