Tag Archives: Astound

Walking Away from BEAD

NTIA has released all but four states to begin signing BEAD contracts with grant winners. Mississippi and Oklahoma have gotten final approval by NTIA but are waiting for approval from NIST. NTIA has still not approved the grant proposals from California and Illinois.

Now that the process of negotiating contracts for grant winners has started, news is seeping out of some grant winners backing out and refusing to accept the BEAD grant awards.

The largest BEAD award being rejected is by Astound in Texas, which is walking away from $166 million in grants. The company explained this by saying that it had only won five of the thirty-three project areas it had applied for, and that the remote geographic areas of the awards made no sense without winning more awards. I have to wonder if the company’s pending merger with Google Fiber also played a role in the company walking away. While it isn’t official, I’ve heard through the grapevine that Astound is also going to walk away from $112 million of BEAD grants in Oregon. The company has also tentatively won $100 million in Washington.

Another ISP walking away from a lot of awards is Resound Networks. Resound is walking away from $60.2 million in New Mexico, $23.1 million in Texas, $8 million in Kansas, $5.2 million in Arkansas, and $3.9 million in Colorado. The company also has relatively small grants in Arizona and Oklahoma. Resound is tentatively slated to win $34.4 million in California, which still has not been approved by NTIA.

There are three ISPs that haven’t signed grant contracts in Nebraska: Amazon, Northeast Nebraska Telephone Company, and Pinpoint Communications. I have to wonder what it means for a satellite company to not accept a grant, since the company has grant awards across the country.

There are bound to be other ISPs who will walk away that we haven’t yet heard about, since States have six months to get contracts from grant winners after the State signed a contract with NTIA for the BEAD money. I’ve been hearing about a lot of smaller ISPs that are still thinking about walking away from BEAD. Some will do so because the too-low grant funding means they can’t get a letter of credit.

It won’t be surprising if there are more rejections of BEAD. When NTIA initiated the Benefit of the Bargain rules, it significantly sliced the amount of grant funding per location. Many ISPs had said before Benefit of the Bargain that the long-term math for taking BEAD grants was marginal. That math took a big turn for the worse when NTIA forced the States to further lower the amount of grant awards. Any ISP that stays after the Benefit of the Bargain is accepting a smaller margin than they originally had hoped for.

At the same time that the amount of grant awards has been squeezed downward, ISPs are seeing inflation in the cost of fiber construction – inflation much higher than the rate of increase for the whole economy. The Fiber Broadband Association conducted a survey with members at the end of 2025 and asked about expected increases in construction costs for 2026. 88% of the respondents expected a cost increase for construction in 2026. 62% of respondents expected a ‘slight’ cost increase of less than 10%. 26% expect a cost increase of more than 10%. 9% expect costs to stay the same, and 3% expect costs to decrease by less than 10%.

It will be interesting to see how ISPs respond to this same question at the end of 2026. The industry is being pounded by increases in chip costs due to shortages as chip manufacturers have pivoted to building AI chips. Higher oil prices have affected the cost of shipping and operating work vehicles, and oil is a raw material component of things like fiber sheathing, conduit, and electronics housings. There is a lot of pressure this year from wage increases. The Federal Reserve made it clear last week that it will not be lowering interest rates this year and may have to instead increase them by year’s end.

We’re still seeing defaults six years after the initial RDOF awards, and I expect there will be ISPs that accept BEAD now but realize in a few years that they can’t make the math work.

I feel sorry for State Broadband Offices that are being asked to find replacements for ISPs that reject BEAD awards. It feels unlikely that NTIA will allow States to increase the size of the grant awards after a rejection. Every default could become a windfall for satellite companies, while a lot of communities are losing the chance to get fiber.

Do the Big Companies Even Want to Get it Right?

020916-F-4728F-001The latest Consumer Reports rankings are out for telecom providers, and the results are much the same as in past years. There are many different groups that rate companies and we often hear of reports that put the cable companies at the bottom of all companies in terms of customer service.

But the Consumer Reports ranking is more comprehensive. It looks at a lot of factors such as the perceived value that customers see with the provide, reliability, speeds, and support both in the home and over the phone. And they compare all of the major telecom companies and don’t compare to other industries.

Not surprisingly, HughesNet and their satellite broadband ranks the lowest. I’ve never heard anybody talk nicely about their product since it’s slow, costly and also has a lot of latency and delays. Many people say it is barely better than dial-up. It will be interesting to see how satellite ranks now that Exede is in the market with a faster product. As I reported a few weeks ago, the issue with Exede is the low total data caps, but at least the 12 mbps download is a huge improvement.

Ranked next to satellite is MediaCom which always comes in dead last among cable and telcos. Ranked next at the bottom are the various DSL providers, with Frontier, Fairpoint, Windstream and AT&T DSL. For the most part the customers on these services have older DSL technology that is only delivering a few Mbps download speeds. There is faster DSL technology available today and better ways to deploy it by bringing the DSLAMs closer to customers, but the companies listed are for the most part not pumping much money into DSL. The exception is Frontier who has gotten a pile of federal subsidy money from the new USF fund to upgrade and expand its DSL footprint.

But right next to this old DSL technology is Comcast, followed closely by Verizon DSL and then Time Warner. Verizon barely even advertises that it has DSL anymore and it is a surprise to see it more favorable with customers than Comcast.

At the top of the list and doing the best job are the smaller cable companies and fiber providers. At the top of the list are WOW and Wave (Astound) followed by Verizon FiOS.

It just amazes me to see these large companies like Comcast and Time Warner do so poorly with their customer service. They have been at the bottom of these kinds of rankings for well over a decade now and it’s obvious that they are willing to live with giving poor service. When you look at the rankings and see that Comcast is viewed by customers to be doing a worse job than Verizon and CenturyLink DSL you just have to shake your head.

It’s very obvious that they don’t care to become better because by spending some money they could do much better. Doing customer service well is not some unreachable mountain of a task. Thousands of companies do it well. If WOW and Astound can do it well, so can Comcast and Time Warner. It’s a matter of investing in the right systems, the right training and the right management of the process. Being big is not an excuse for being crappy, and if it is a valid excuse, then this alone ought to stop the Comcast / Time Warner merger.

I would think that the management of these companies would hate seeing themselves at the bottom of these lists. But they obviously like profits more than they hate doing a poor job. And that is what I don’t get. These companies have lost millions of customers due to dissatisfaction with their service and their best growth strategy is to lure back customers in their existing markets by doing a better job.