At the SCTE Tech Expo in Washington, DC, Arielle Roth, the newly seated head of NTIA, was quoted by several sources as saying, “Our role is to be good stewards of the money . . . We wouldn’t be doing our due diligence if we didn’t look under the hood and make sure that Americans aren’t on the hook for costs that would be unreasonable.”

By the looks of what NTIA has been doing, they seem to have taken cost-cutting as the primary goal of the BEAD program. First, they forced States to shave millions of locations from the BEAD-eligible list, and I believe we’re going to find out later that many millions of those locations should have gotten grants for better broadband. NTIA is now in the process of setting a cost cap for each state based on the CostQuest cost models and forcing ISPs to accept 65% or less of the state-specific cost cap.

I would agree that NTIA has a responsibility to make sure that money isn’t wasted, but that is not supposed to be its primary concern. Let me take you back to the beginning of BEAD to talk about how this was supposed to work.

Congress clearly intended for the full $45.5 billion allocated to BEAD to be spent. States were instructed to bring good broadband to every BEAD-eligible location, and the legislation included an emphasis on building fiber. Whatever wasn’t spent on infrastructure was to be used for non-deployment projects that were broadband-related. This could have encompassed a wide variety of different uses to be determined by each state. The legislation suggested uses for non-deployment funds for things like wiring urban MDUs for broadband and getting computers and other devices into the hands of those who need them. States have suggested a wide range of uses for non-deployment funds. For example, West Virginia wanted to use the funds to do a statewide pole inventory to make it easier to build fiber. South Carolina envisioned creating a statewide middle-mile network that made sure that ISPs in every rural county could buy backbone Internet for the same price as in the populous counties.

Unfortunately, NTIA got off to a bad start early when it realized how bad the FCC maps were. The whole BEAD process was delayed waiting for better maps. When they got slightly better maps, NTIA pulled the trigger and used those maps to allocate BEAD funds to states. Almost immediately, some states yelled that they didn’t get enough money, while other states realized they got more than they needed. There were policy discussions about shifting money between states after awards were made, but that never happened.

The States then went through a map challenge process. Unfortunately, the rules required by NTIA made it far easier to remove BEAD-eligible locations from the map than to add locations that should have been eligible. I know multiple counties that worked hard to show that some of the ISPs in their County were not delivering 100/20 Mbps. However, the process for proving that was nearly impossible to follow – it required convincing multiple customers of a given ISP to take speed tests multiple times per day over multiple days, and in a specific manner. The end result of the disastrous map challenge process was that millions of locations were removed from BEAD, with relatively few added.

More recently, NTIA acted to remove even more locations from BEAD. They correctly removed locations where some other grant was supposed to build better broadband. But they also made it easier for WISPs, using both licensed and unlicensed spectrum, to ask to remove locations from the BEAD map.

States were originally given a lot of latitude in how to use the funding allocated to them. But States were to act under the overarching intentions of the legislation that said they should consider fiber first. States understood that by funding relatively expensive fiber builds, they were reducing the funds that would be left for non-deployment. States had serious policy discussions of how to balance between building fiber and other needs.

But this latitude is exactly what Congress intended. They wanted BEAD to avoid the problems of RDOF, where the FCC called the shots and ended up awarding money to ISPs that should not have been funded. That draws attention to a second quote from Roth. She said that BEAD funding should go to “serious providers who are going to deliver on their promises and that we’re not going to see defaults.” I hate to be the bearer of bad news to NTIA, but by pressuring ISPs to take less grant funding to stay in BEAD, NTIA is greatly increasing the chance of future defaults. This is going to be a repeat of RDOF. ISPs will start building networks and will suffer inflation and supply chain issues, and some of them will decide that it’s better to pull the plug than to finish building a project they can’t afford, and that can’t make money. That’s the reason for the RDOF defaults in recent years – RDOF winners looked at the low amounts of award they accepted in the reverse auction and threw in the towel.

One thing is now clear with BEAD – NTIA now fully owns the program. States lost all of their latitude with BEAD, and the NTIA changed the rules after the BEAD process made it to the five-yard line. Whatever happens from here will be laid 100% at the doorstep of NTIA, and my prediction is that BEAD is not going to be talked about fondly in many parts of the country.