That’s why I was surprised to see that the newly seated House of Representatives immediately announce a set of hearings to look at broadband grants. You know from reading my blog that I think there is a lot of room for improvement in the BEAD grant program – due in large degree to the complicated grant rules established by Congress. I would welcome hearings that would examine some of the over-the-top grant rules if the purpose of the hearings was to create legislation to make it easier to award and spend the BEAD grant funds.
But that doesn’t seem to be the intent of these hearings. The hearings want to look at two issues. The first is to make sure that the grants are only used for connecting to unserved locations and not used for ‘overbuilding’. This has been a major talking point for the big cable companies for years – they don’t want to see any grant money used to encroach on areas they think of as their service territories. The whole idea of not using grants for overbuilding is ludicrous – there are not many homes in the country where at least one ISP can’t provide service – so every new broadband network that is constructed is overbuilding somebody.
The vast majority of the BEAD grants will be used in rural areas, and the idea that rural funding will be used for ‘overbuilding’ is ludicrous. I don’t know anybody who advocates using grant funding to overbuild rural fiber networks or other existing fast networks. All of the state grant programs I’ve worked with have a challenge process to make sure this doesn’t happen, and it looks like the BEAD grants have several crosschecks to make sure this doesn’t happen. Even if a BEAD grant is awarded in error, I would think a State Broadband office would yank the grant award before letting grant money be used to overbuild rural fiber.
The issue that has the big cable companies up in arms is that the IIJA grant legislation says that once a state has satisfied bringing broadband to unserved and underserved locations, grant funding can be used to improve broadband in inner cities and places that the big ISPs have ignored. There will not likely be a lot of BEAD grant money that goes to this purpose, but there will be some.
It’s hard to understand the reason to have a hearing on this issue. The BEAD rules are clearly defined by language crafted and enacted by Congress. The hearings will likely involve grilling officials from the NTIA on this issue. It’s an absurd scenario to picture, because the NTIA has no choice but to follow the law as written by Congress. Any hearings on this issue will likely beat up n officials at the NTIA or FCC, but will really be Congress investigating its own law.
The other stated purpose of the hearings is to make sure that the grants don’t have waste, fraud, or abuse. It’s going to be really interesting to see where this leads in hearings. The only big historical cases of grant waste and abuse I know of are the way the big telcos often took CAF II funding and made no upgrades. I don’t picture these hearings dredging up past abuses by the big ISPs, so I’m having a hard time imagining where else this line of inquiry might go.
I fear that the biggest repercussion of this kind of hearing is that it’s going to make already-cautious grant officials even more cautious. The folks at the NTIA and State Broadband offices are going to worry that everything they do will be under a microscope from Congress – and they are going to get even more careful not to make any bad mistakes in awarding grants. Nobody wants to be yanked in front of Congress in a year and be grilled about a specific grant award. And perhaps that’s the purpose of these grants – to intimidate officials into funneling more grant funding to the safe choice of giving it to big ISPs.
What puzzles me the most is why hold broadband hearings of this sort. Bringing better broadband to communities is immensely popular. In the many surveys we’ve administered on the issue, the public support for bringing better broadband has always been above 90%. This is true even in communities where there is already fast broadband offered by a cable company – folks want competition. It’s hard picturing any headlines coming from these hearings that can benefit the politicians holding the hearings.
These hearings only make sense as a way to appease the large ISPs which contribute heavily to politicians. It’s hard to imagine that these hearings will change anything. Congress can change the BEAD grant rules any time this year, but that will take bipartisan cooperation – something that seems to have disappeared from Washington DC. But the hearings will only allow for the airing of the big ISP grievances, and I guess that is something.