I’ve been doing a lot of thinking about how the BEAD grant program got off track. Even before the current giant swing in rules by NTIA, the program had a lot of problems. One of my observations about the BEAD grant program is that ISPs were not an integral part of developing the grant rules. ISPs were largely ignored from the start and were only brought into the BEAD process after the rules were largely set in concrete.

This is actually not that unusual in the world of grants, but BEAD was supposed to be different. The BEAD legislation required State Broadband Offices to reach out to stakeholders in “every corner of a state” to solicit feedback on what should be accomplished with the BEAD program.

The BEAD process wasn’t just about infrastructure and also included funding that might be used for distributing computers and devices and training people how to use them. It made sense for Broadband Offices to reach out to listen, particularly since many States had newly created Broadband Offices that had recently been created to handle the grants funded by the Capital Project Funds.

I sat through the outreach process in a number of States, and was disappointed when, in many States, there was no listening involved, just Broadband Offices talking about the BEAD timeline. But the real flaw of the outreach program to me was that ISPs were not considered as major stakeholders in this process. For the infrastructure portion of BEAD, ISPs are the only stakeholders that really matter, because they are the ones who will raise the needed matching funds, build, and operate the grant-funded networks.

A lot of the problems encountered in the BEAD process could have been avoided if NTIA and States had asked ISPs upfront what it would take for BEAD to be attractive to them. The first time I read through the legislation, I identified a number of requirements that ISPs were going to hate. In practice, many of the BEAD processes turned out to be even worse than I had feared. For example, the map challenge process, as devised by NTIA, was a total nightmare that had no chance of functioning as intended. States could have done a much better job, and many States already had created their own broadband maps of the areas that needed better broadband. Those efforts were ignored.

I had naively hoped that since BEAD was the first grant program to require public feedback, States would end up loosening the worst of the rules to make the program work. To me, the ideal grant program allows a Broadband Office to waive requirements that are a problem for specific ISPs. The State broadband grants in many states were flexible to make them work.

Unfortunately, any hope that BEAD could work well died when it became clear that States were not going to be given much latitude. From the outset, it quickly became clear that NTIA was not going to be an advisor to State broadband programs. Instead, NTIA dictated practically every aspect of the BEAD rules and process. NTIA left very little to State discretion.

When it’s over, I think the NTIA decision to take full charge of BEAD will ultimately prove to be the fatal flaw of the program. It didn’t have to happen this way. It was clear in the legislation that Congress intended States to develop unique plans for BEAD that worked for each of them. We know what a grant program looks like the federal governments hands over the reins to States. The Capital Projects Fund gave over $9 billion to States to award broadband infrastructure grants. Treasury created some basic rules but largely let States decide how to implement and operate the grant programs. States took a wide variety of approaches to choosing ISPs for the funding. In the end, CPF was a State-directed grant program with only light oversight provided by the federal government. If NTIA had adopted the same philosophy with BEAD, construction would have started for grant-funded projects a few years ago.

Any infrastructure grant program can only be successful if ISPs are willing to participate. State Broadband Offices understand this and were adept at making State grant programs work.

BEAD became so out of kilter that many States ended up with a large number of locations where no ISPs other than Satellite providers made bids. If States had run these programs from the start, they would have found a way to bring local ISPs into the mix. They would have been able to fund a lot of fiber, but would not have hesitated to fund other technologies when that made sense. And they would have accomplished all of the steps required by the legislation in a lot less than four years.