Tag Archives: BEAD Grants

Implications of Satellite Being Broadband

We’ve had a quiet policy change in the country over the last year where satellite broadband is starting to be considered to be broadband by the federal government. Any rural household that subscribes to and loves Starlink would wonder why this is news, but from a policy perspective, it is a big deal. I’ve been considering what this shift might mean in the future.

The FCC decided that Starlink wasn’t broadband when it rejected Starlink’s long-form filing in August 2022 where Starlink wanted to claim the funding it had won in the RDOF reverse auction. The FCC ruled in that process that it couldn’t “subsidize ventures that are not delivering the promised speeds or are not likely to meet program requirements”. NTIA recognized low-orbit satellite as an acceptable alternative for BEAD funding for high-cost locations in a ruling in 2024 that made it acceptable for States to make RDOF awards to satellite companies. The real change in policy came with the recent Notice from NTIA that reshuffled BEAD grant rules and put satellite on an equal footing with fiber, fixed wireless, and other broadband technologies. The NTIA Notice said that satellite is eligible to win any amount of BEAD funding if it asks for the lowest amount of BEAD funding at a location.

But as is typical with regulatory policy, the NTIA didn’t make a full pivot to satellite. The same Notice that allows satellite to win BEAD anywhere did not change the BEAD map to recognize existing satellite customers as served. The Notice allows WISPs that use unlicensed spectrum to ask to remove locations from the BEAD map if they are already providing speeds of at least 100/20 Mbps. The NTIA did not give this same option to satellite – which could have theoretically allowed Starlink to ask to take all BEAD locations off the map and kill the grant program. I’m having trouble grasping why a home in a BEAD area that is using Starlink is not considered to be served with broadband while Starlink can ask for funding to serve the neighbor, who will then be considered as served. That dichotomy highlights the satellite regulatory issue in a nutshell – is satellite service broadband or not? Apparently, it’s not broadband for mapping purposes, but it is broadband for awarding federal grants and subsidies.

There are definite implications for satellite service being considered as broadband. First, doing so might eliminate any perceived federal need for future broadband grants. There will likely be millions of rural homes incorrectly left out of BEAD due to the faulty FCC maps. We’re still seeing additional RDOF defaults, like the 41,000 locations that CenturyLink just turned back to the FCC. But the FCC and the rest of the federal government can be totally off the hook for future grants with a simple finding by the FCC that satellite service is fully considered to be broadband. The FCC will be able to take a bow and declare rural universal service has been accomplished – regardless of the rural folks who still don’t think they have a broadband option.

If satellite service is broadband, there probably is no need for future federal subsidies that support high-cost areas. Rural subsidies are the biggest part of the Universal Service Fund at $4.5 billion in 2024. That includes subsidies for RDOF, EA-CAM, and other high-cost support mechanisms for rural telcos.

The only part of this fund that might not be a target to end is the $500 million spent each year to support rural cellular carriers. As satellite companies continue to get into the business of connecting directly to cell phones, this subsidy might also eventually be questioned.

If satellite is broadband, then the big telcos are completely free to finally dismantle rural copper. The California Public Utility Commission has been making that hard for AT&T and other telcos.

We have reached the place where satellite broadband is considered to be broadband for some purposes but not others. It will be interesting to see how long we maintain this dichotomy. I’m guessing for now that we’ll live with treating satellite differently depending on the context – but that can’t last for long.

BEAD and the Economy

I’ve written about how the new BEAD rules impact County governments, broadband offices, and the general public. What’s not being talked about enough is the impact of building infrastructure on the overall economy. BEAD was part of the Infrastructure Investment and Jobs Act, which, while called an infrastructure bill, was foremost a jobs bill. Early on, NTIA envisioned that $42.5 billion was enough money to fund a lot of fiber construction and the jobs and economic benefits that go along with that construction.

I’m not sure if most people understand how labor-intensive it is to build rural fiber. Consider a BEAD project to build 1,000 miles of rural fiber to serve 5,000 homes and businesses. Such a project would involve the following labor:

  • The actual construction will require 50–60 man-years of technicians and supervisors to build the fiber network.
  • The project will require 10-12 man-years to construct fiber drops and install customers in homes and businesses.
  • There are probably 2 man-years of effort by the engineers, consultants, and others who design the network, order materials, obtain the grant, obtain permits and rights-of-ways, track construction, create maps and records, and report to the grant agency.

Direct labor is only the beginning. The benefits from constructing this project will spread through the local and national economy:

  • There is labor from employees of the vendors who manufacture fiber and electronics. With Build America rules, this labor is mostly in the U.S.
  • There is labor at the supply houses that warehouse, sell, and ship the materials.
  • There is work for truckers who deliver the materials from factory to supply house to construction site.
  • There will be half a dozen vehicles purchased or used to support the project. There are also computers, smartphones, test equipment, and related electronics.
  • There is work required by local people who locate buried facilities. There is work required at the electric utilities or other pole owners to coordinate adding facilities to their poles.
  • There is a huge boom for the local hotels, restaurants, gas stations, and other local merchants due to having contractors working in the local economy for an extended time.
  • There’s work for local electrical contractors to bring power to new electronics locations. Local contractors may be used to build or place huts and cabinets.
  • There is work at the banks and other firms that fund and insure the project.
  • There is work by the firms who will market and sell the new broadband to the people in the grant area.
  • This list could go on and on since the project will drive the ISP to spend money on software, office supplies, auditors, and a long list of other related expenses, all of which benefit somebody in the economy.

Finally, there are the permanent jobs created by the ISP that will operate the network. Depending on the size of the ISP who will operate the network, adding this network and customers will add 2-4 permanent technicians and customer service representatives along with the vehicles, office space, management, and benefits to support them.

That’s a huge amount of jobs and economic benefits from a single 1,000-mile fiber project, and the $42.5 might have funded the equivalent of 1,500 such fiber projects.

It’s clear that the new NTIA rules are going to greatly curtail the amount of fiber built with BEAD in favor of fixed wireless and satellite ISPs. The alternate technologies also benefit the economy, but at much lower levels. The major jobs benefit comes from building the physical infrastructure. Perhaps somebody has done the math, but I’m guessing that building a fixed wireless network probably brings only a tiny fraction of this benefit to the local economy. Giving  BEAD funding to satellite ISPs brings almost no benefit to the local economy.

I’ve seen economist estimates made over the years on how an infrastructure project like building fiber or a bridge brings 3-4 times the benefit to the economy than the local infrastructure spending. The changes the NTIA is will likely cut BEAD spending in half. It’s poor fiscal policy to focus on saving $20 billion in grant awards that might have brought $100-150 billion of benefit to the overall economy – and most of that benefit would have come to rural counties that most need it.

BEAD and the Rural Public

The last two days I wrote about the impact of the changes to the BEAD program on County Governments and on State Broadband Offices. As important as those impacts are, the real impact from changing BEAD is on the public living in the rural areas that are covered by BEAD.

Let me start with BEAD eligibility. The new rules include a provision that wireless ISPs (WISPS) that claim speeds to the FCC of 100/20 Mbps using unlicensed spectrum can certify their capability to State Broadband Offices and have those areas removed from BEAD eligibility. That means people living in the removed areas will not be seeing a new broadband alternative. It doesn’t matter if the WISP actually has speed far slower than 100/20 Mbps. It doesn’t matter homes have a line-of-sight issue and can’t be served by the WISP. It doesn’t matter if the WISP wants to charge $100 a month for 25 Mbps service. NTIA will have declared that these areas are served and deserve no federal funding for broadband upgrades. My guess is that millions of homes will be removed from the BEAD map and will be declared as already being served – which will be a huge surprise to the people living in these areas.

The biggest change in the new BEAD rules is that there will be a lot less fiber built with BEAD funds. Various States have been expecting anywhere from 60% to 95% of BEAD funding to go to build fiber. The revised rules will eliminate most of that fiber. BEAD grants will now be awarded to the ISP that asks for the lowest amount of funding for each location. Satellite and fixed wireless providers can easily underbid fiber ISPs if they want to serve a given market. This is going to save the federal government a lot of money, and a large portion of the $42.5 billion allocated to BEAD will not be spent.

Households in BEAD areas are likely to see BEAD money going to a WISP or Starlink – and on paper, that will be their fast ISP option. To be fair, WISPs who install the latest radios might deliver speeds up to 500 Mbps to many customers. But because of the line-of-sight issues with fixed wireless, some homes won’t be able to get service at all. But BEAD winners will not have to spend the extra money for the newest radios – technology capable of 100/20 Mbps is considered to be okay.

Unless they change their pricing philosophy, some WISPs have very high prices. Where fiber providers who won BEAD were likely going to charge $70 per month, some of the WISPs are already charging more than $100 for slower speeds. Starlink is already expensive – the company now has an $80 product in some markets, but its normal price is $120 per month.

Rural residents already feel like they’ve been jerked around for years. The FCC held a reverse auction for RDOF in 2010, and many of the networks promised by that funding are still not built – and might not be for 3 more years. Somebody promised a new solution from a BEAD grant might not see a solution until 2029. Many rural residents who have been told they have faster broadband coming are so cynical that they’ve stopped believing anything they hear about broadband. Certainly, many who have been told for the last few years that BEAD was going to bring them fiber are now going to be disappointed again.

I could write a dozen blogs about what good broadband meets for rural households – and I’ve written about this often over the years. Good broadband means kids can do homework and not have to sit in the parking lot of a library in the evening to do school work. Good broadband means rural residents can find online work that pays better than jobs available in their rural county. Good rural broadband means farmers can participate in the latest technology. Good broadband means houses for sale that somebody is willing to buy.

I’m picturing a resident who is told later this year that the federal government and their State Broadband Office is making a grant to Starlink to bring them faster broadband. They’ve already been able to buy Starlink for several years. They might already have rejected it for being too expensive. They might have already tried it and rejected it because of interference with trees or hills. If they’ve already heard through local politicians that better broadband is coming, can they conclude anything other than the government at all levels has screwed them on broadband while handing money to a company that doesn’t need it?

The consensus has been that BEAD was going to bring fiber to thousands of counties. Unless public pressure reverses some or all of the NTIA Notice, there will be many millions of rural homes after BEAD that still won’t have adequate broadband. I guess this means that States and local governments will have to regroup and get back to tackling the rural broadband gap  a little bit at a time.

Related Blogs

Updating My BEAD Bingo Card

County Governments and BEAD

BEAD and State Broadband Offices

BEAD and State Broadband Offices

I’ve been saying for the last few years that the hardest job in the industry has been the folks who head State Broadband Offices. These folks took these positions because they knew they could do a lot of public good by tackling the rural broadband gap and the overall digital divide. A lot of the hard work these folks did over the last three years was erased when NTIA first eliminated the Digital Equity grants and then recently eviscerated the BEAD grants.

SBOs were handed a giant mess with the BEAD grants. I’ve always said the biggest problem with BEAD was the Congressional staffers or ISP lobbyists who wrote the BEAD legislation. They made the process cumbersome and ridiculously complicated. In my opinion, NTIA made it even worse by being overly cautious from day one. It was clear that the agency did not want to be blamed for repeating the FCC’s disasters in the RDOF and CAF II subsidy programs.

SBOs knew the BEAD grant process didn’t have to be so complicated because they have processed and awarded almost $10 billion dollars of broadband grants from the Capital Projects Fund. Those grants came with some common sense rules, but they mostly trusted the States to be good shepherds of the funding. States did an overall great job. It’s not talked about enough, but this is easily the most successful broadband grant program we’ve ever had.

But SBOs accepted the BEAD complications and slogged through the many required steps of the BEAD process. While doing this, SBOs were widely blamed for being slow and not deploying needed broadband – and most of the delays were not their fault.

Some of the steps were so ridiculous that it would be comical if so much money wasn’t riding on the grant process. For example, the NTIA guidelines for the map challenge were overly complicated and largely impossible to comply with.

This last month has been massively disappointing for SBOs. The industry has talked about solving the digital divide for at least twenty years, and SBOs finally had a chance to do something about it. The Digital Equity grants would not solely solve the digital divide, but SBOs were working to create sustainable programs that would outlive the influx of initial funding. This all went for naught when the grant program was completely killed. There are a few states where the legislature contributed some funding for digital equity, but for the most part, this effort is dead.

Now, SBOs have seen all their hard work on BEAD upended completely. States were given a fair amount of latitude to design state-specific rules for awarding BEAD grants, and it’s fair to say that every state came up with its own solution. SBOs listened to state politicians, ISPs, and the public and did their best to create a grant program that fit the specific circumstances in their state

What is probably the most disturbing about the sudden change in the rules is that BEAD was finally working. A large majority of states have started the broadband award process and have been reviewing grant applications. States like Louisiana and Nevada made it through the award process and were ready to award a lot of money to build a lot of fiber while staying within the budget that BEAD gave them. Many states that are partway through the process report that they are getting grant requests to build fiber coming in lower than their expectations.

The revised BEAD grants are nothing more than a one-round RDOF auction by State, where the ISP that asks for the least amount of funding wins. There is a slight amount of wiggle in that a grant request that is less than 15% greater than the lowest bid can be considered. But BEAD is largely now low bid takes all. The one improvement over RDOF is that ISPs must meet financial, technical, and managerial criteria before participating. But even RDOF had an important fiber preference.

I’ve read a few opinions from folks who still think that a lot of the BEAD money can now go to fiber, and I hope they are right. But I remember the shenanigans played during the RDOF auction when ISPs were vying for $9 billion in funding. What are we going to see with a much larger pile of money at stake? What’s to stop a satellite company or large WISP from bidding $2,000 or less per passing to win a whole state?

One thing is for sure. It’s a lot less enjoyable to be a State Broadband Director now, because the NTIA took away one big set of funding and took all the decision making out of the BEAD grant funding. All of the work to create unique State solutions went completely out the door.

Related Blogs:

Updating my BEAD Bingo Card

County Governments and BEAD

County Governments and BEAD

Today’s blog talks about the big disappointment being felt by elected officials in Counties all over the Country as word of the NTIA’s new rules for BEAD filters down to them.

I’ve worked across the country with dozens of Counties that committed time and resources to the BEAD process. Many Counties put a lot of effort into the map challenge process. Many Counties carefully interviewed ISPs and chose their favorites – because State BEAD grant rules told them that ISPs would get more grant points with local support. Many Counties went further and made local matching grants to ISPs to support a BEAD application. Some of these grants came out of the general coffers, but many were from ARPA funding. Unfortunately, most of those matching ARPA grants are now lost, and the money will fall to the floor.

Counties made the effort for BEAD because their constituents told them to. I have been in numerous Counties where the elected officials say that fixing broadband is the number one issue they hear about. They can’t stop and pump gas or go to the grocery store without somebody talking to them about poor broadband.

That’s all gone now. Broadband equity grants were completely killed in May. BEAD grants for fiber are all but killed. Almost every County official I talked to wanted BEAD to be used in their County to build fiber. They learned how fiber networks would be good for many decades to come, and they want broadband in rural areas that is as good as in larger towns and cities.

County officials understand better than anybody that better broadband is economic development. They understand that fiber means people will have enough upload speeds to work from home and how higher-paying jobs uplift a local economy. They understand that rural fiber networks are the first step for providing backhaul for rural cell towers – because rural cellular coverage is often even worse than rural broadband coverage.

They were looking at BEAD as a tool that would bolster the future of their County. A large majority of rural Counties are aging and losing population, and they saw fiber as a way to bring good jobs that might stop young folks from leaving the County after they turn eighteen.

County officials that put a lot of time and money into the BEAD process are not going to be happy with the NTIA’s ruling that effectively guts their chance to get fiber. Until this NTIA Notice, broadband has been a non-partisan issue. I remember being in a County Board meeting where Commissioners from both parties joked that getting better broadband is the one issue everybody could agree on. Unfortunately, the NTIA order is completely partisan and seems to be part of a larger effort of the new administration to undo the infrastructure program implemented by the last administration.

County officials don’t understand the need for the big change in BEAD. State Broadband Offices are already in the process this year of awarding grants so that fiber construction could be started soon. Everybody wishes BEAD had moved faster, but they are glad to see it finally moving forward.

The most disheartening thing about the NTIA Notice is seeing all of the effort local folks have made to get better broadband fall by the wayside. I was disappointed the day the BEAD grants were announced because Congress made it too complicated. I’ve written many blogs complaining about the rules and the process. But I never complained about the BEAD goals – because this was the chance to bring fiber infrastructure to thousands of rural counties.

To rub salt in the wound, the NTIA Notice also eliminates the local preference where local governments could give their favorite ISP extra grant points with an exclusive letter of support, and even more points by awarding a local grant.

I hope that a large number of rural elected officials are voicing their unhappiness to federal politicians this week. I doubt there are many members of Congress who haven’t supported BEAD grant applicants with letters of support. And most of them who visit rural areas always mention that better broadband is coming. Congress created the BEAD rules, and at this point they are the only ones who can insist that the NTIA lets the BEAD grant program play out as planned.

Related blogs:

Updating My BEAD Bingo Card

BEAD and State Broadband Offices

Updating My BEAD Bingo Card

When the NTIA made it clear that it was going to change the BEAD rules, I wrote a blog that I called, somewhat tongue-in-cheek, the BEAD Bingo Card. That blog listed a range of options for how NTIA might modify BEAD – from canceling the program to leaving it largely intact.

On June 6, NTIA issued a BEAD Restructuring Policy Notice that defines how BEAD is going to work, and wouldn’t you know it – NTIA went with an option I had not considered. I would classify the NTIA’s solution as “RDOFing the BEAD process.” By that, I think NTIA adopted the worst features of RDOF. The Notice makes the following major changes to the process of choosing BEAD grant winners:

  • Any technology that can deliver 100/20 Mbps broadband today is now eligible to win a BEAD grant. While there is a caveat that a winning technology must have the capability over time to scale to support rural 5G and other wireless needs, there is no specific commitment required by a grant winner to make future upgrades.
  • The new process requires State Broadband Offices to consider eliminating any BEAD locations that are already served by unlicensed fixed wireless. If a WISP already claims a speed of at least 100/20 Mbps in the FCC maps for a BEAD location, the WISP can certify that it is providing served speeds and these locations are removed from BEAD. This could conceivably eliminate millions of BEAD locations from BEAD grants.
  • The primary criteria for picking a winner is the requested BEAD funds per eligible location. Whoever asks for the least amount of money wins. Broadband Grant Offices can consider speed to deployment and broadband speeds, but only if a grant application is within 15% of the lowest bid. This feels like a one-round reverse auction.

Recall that RDOF included a fiber preference, and that preference resulted in a lot of electric cooperatives and others winning RDOF funding to build fiber. Since BEAD will now allow fixed wireless, LEO satellite, and FWA cellular wireless to compete head-to-head with fiber, it seems likely that fiber only wins in places where no other technology is seeking funding. We can only guess how many fiber grant requests that will kill – but it’s not hard to imagine these rules killing 80%  or 90% of fiber awards. It’s going to boil down to how much BEAD funding the wireless ISPs and satellite companies will pursue. The more interesting dynamic will be the bidding battle between fixed wireless and satellite – because both can easily underbid fiber projects.

State Broadband Offices can require wireless and satellite providers to swear they will have the capacity to serve everybody, but every ISP that decides to pursue BEAD will make this promise. They know there will be no realistic consequences of not meeting the commitment five years down the road – there has never been any serious enforcement of federal grant performance in the past, and there is no reason to believe that will change. The BEAD grant will be awarded and built, and everybody will forget about the original intent – except the households who still don’t have good broadband.

This completely tosses away the idea that BEAD would be used to build networks that will last for the rest of the century – some of the winning BEAD projects will be behind the rest of the country the second they are built.

This Notice also ignores the second big purpose of the BEAD grant program – it was a jobs program which was to provide a lot of good jobs to build and operate networks. It’s clear to me that the NTIA wants to spend as little as possible of the $42.5 billion money. The U.S. Department of Commerce wants to take credit for saving money and doesn’t care about getting good broadband to rural areas. This Notice has a clear message: Congress said we have to build broadband everywhere, so we’ll build what is barely adequate for today and ignore what’s needed for the future. This Notice punts the rural broadband gap down the road for the next generation to solve.

There will be lots of articles published today talking about the mechanics and timing of the revised BEAD, and I might write about that in a future blog. The bottom line is that every State that already started the BEAD grant selection process has to start over with a grant round that allows every technology to compete head-to-head.

There are a lot of different issues to unwrap inside this Notice, and I plan to to write a series of blogs looking at the ramifications of this Notice for different national stakeholders. So stay tuned.

Related Blogs:

County Governments and BEAD

BEAD and State Broadband Offices

Full Speed Ahead

State Broadband Offices have seemingly aligned to put pressure on the federal government to get the BEAD awards made and the construction process started this year. While there might be a few exceptions, most State Broadband Offices have accelerated the grant review process and are either ready to make BEAD awards now or soon will be in a position to do so.

This is an interesting strategy because it seems to be coupled with getting State and local officials to lobby for a rapid conclusion of the grant process. County Boards and governors have been asking federal elected officials to let the BEAD process play out.

This is not to say that folks don’t want to see some changes in BEAD. For example, there are popular ideas in the federal SPEED for BEAD Act that would make it easier for ISPs to build. Those kinds of changes could be incorporated into BEAD contracts with grant winners without slowing down the process. Grant Offices and local officials fear a total reshuffling of the rules will force States to start the process all over again. If the decision at NTIA is to change grant scoring metrics, then it probably means changing the BEAD Volume 2 rules and having ISPs file all over again for the BEAD grants. It’s hard to imagine that a change like that won’t add six months to a year to making grant awards and would kill the chance of any broadband construction in 2025.

One of the most convincing things I’ve seen on the topic is a letter published by Broadband Communities Magazine. The letter was written by Josh Etheridge, the Co-Owner of EPC, a fiber construction firm. He pleads with officials to release the BEAD funding in Louisiana and says that delays have already forced him to start laying off some of his 160 full-time staff and an equal number of subcontractors. He makes the convincing argument that BEAD money ultimately gets spent supporting jobs in local communities – which was the stated purpose of the IIJA legislation that created BEAD.

NTIA says it will hopefully be ready to provide new guidance on BEAD around mid-May. So far, everybody associated with the NTIA BEAD process has been completely noncommittal about what changes might be coming. The only thing of substance that has been hinted at is that BEAD awards ought to be more technology-neutral to cut down on amount of grant funding needed. It’s that statement that has the whole industry on edge and on hold.

The BEAD grants were allocated to States in an extremely uneven manner since money was allocated using faulty FCC maps. Some States have enough BEAD money to mostly fund a fiber solution, as has been done in Louisiana. But even there, some of the money went to alternate technologies to serve remote locations. Other states are going to have to make substantial grants to non-fiber technologies to make the numbers work.

Broadband Offices and State and local officials all want to see the grant funding awarded to their states to build as much fiber as possible while still assuring that all BEAD-eligible locations get some better broadband solution. I think the big fear is not only that more funding will go to satellite, but that ‘excess funds’ will be reclaimed by Treasury and not spent on broadband. The phrase ‘once in a generation’ funding has probably been used too often for BEAD, to the point that people don’t really hear what it means. States are doing a magnificent job of spreading the BEAD money to bring as much public benefit as possible – and they are all asking to be left alone to finish the job.

We’ll find out in a few weeks if the strategy of plowing forward will be convincing. It’s certainly the fastest way to turn BEAD grants into construction projects.

Proposed BEAD Legislation

We got a peek at how the BEAD grants might be modified when Representative Richard Hudson of North Carolina introduced the Streamlining Program Efficiency and Expanding Deployment (SPEED) for BEAD Act. Note that these are just proposed changes to BEAD and other changes are not off the table. Many of these changes undo direct requirements from Congress in the original BEAD legislation.

A lot of the changes are largely cosmetic and what the regulatory world refers to as ‘packing peanuts’, meaning the changes make a policy statement but have almost no impact on making the BEAD grant awards. This includes:

  • Changes the acronym for BEAD from ‘Broadband Equity, Access, and Deployment” to ‘Broadband Expansion, Access, and Deployment’.
  • Eliminating topics from the grant application that most ISPs were giving lip service to anyway. ISPs may still care about these topics, but they would no longer be a requirement for States to consider when choosing grant winners. This Act would eliminate consideration for:
    • Diversity, inclusion, and equity
    • A long list of labor requirements including an emphasis on union wages, prevailing wages, workforce composition, and a labor peace agreement.
    • How a new network would address climate change.
    • Grant points for offering open access.
    • Regulation of network management practices, including data caps.

The proposed legislation has a few items of more significant impact that most ISPs will like:

  • Allows ISPs to remove high cost locations from BEAD proposals. Most states have drawn arbitrary required service areas, and this lets an ISP remove location that add too much cost. Presumably those locations would default to a satellite or some other technology.
  • While BEAD would maintain the requirement to offer at least one low-cost broadband plan, states would not be allowed to regulate or otherwise mandate or set such rates or require rates to be capped or frozen for future years.

There are a few major proposed changes:

  • Any unspent BEAD funds would be returned to Treasury. States will be pleased to see that the Act leaves Non-Deployment Funds alone – many feared those would be yanked. Originally, unused funds were to be redistributed to states that didn’t get enough funding. This is bad news for States that hoped to get more.
  • One of the biggest changes is that BEAD funding can’t be used to fund digital inclusion and adoption activities. Funds can still be used for telecom workforce development.

The biggest change is the one we’ve all been waiting for – there would no longer be any preference for fiber, and any broadband technology that meets the speed and latency requirements is eligible for BEAD funding. Of course, this doesn’t answer the big question of what that means. Might this mean that 10% or 20% of BEAD would go to satellite technology, or even most or all of it? As much as folks want an answer to this question, it’s likely to be a while until rules get that specific. That final direction is likely to come from the NTIA in the form of new instructions on how to choose grant winners.

While the proposed Act has the acronym SPEED, it seems inevitable that any changes by Congress or NTIA will require states that have already made BEAD awards, or the many that are currently scoring grants, to start the grant award process over. Some folks have speculated changes could delay BEAD for another year, but I expect many states will be able to make the pivot more quickly.

Commerce Secretary Howard Lutnick recently said he plans to make similar changes and probably others. I don’t understand enough about the new dynamics in DC to know if NTIA can make significant changes unilaterally or if they would want the cover provided by this legislation. The bill undoes provisions that Congress created in the original BEAD legislation, and it seems like Congress ought to be the ones to change them. But Commerce might feel they have the authority to make changes. I guess we’ll find out soon.

Counting Farm Passings

The NTIA recently issued a directive encouraging States to get ISPs to remove locations from BEAD grant applications that can’t be served by broadband. These extra locations might be barns, sheds, or other locations that are not eligible for a BEAD grant. This doesn’t sound like an unreasonable request until you look a little deeper at the issue of identifying and counting passings in farming areas.

It’s been clear to anybody who has looked closely at the FCC mapping fabric in rural areas that there are a lot of errors. The FCC map fabric is supposed to identify every place that is a likely candidate to buy broadband. You can find almost any imaginable issue with the map fabric.

  • There are plenty of places where CostQuest has placed a grant-eligible location in the middle of a field, far from any home or business. Those are clearly not supposed to be there.
  • But there are plenty of locations where there are rural homes that are not identified as eligible in the fabric.
  • The most interesting category are locations that are misplaced, but not really an error. You might find a farm where the barn is considered as the eligible location but not the house. We’ve found places where the identified location is where the farm lane meets the highway instead of at the farmhouse.

The NTIA is asking ISPs to eliminate locations where the maps are clearly incorrect but not letting ISPs add back locations that should be in the fabric. This feels like a way to reduce the amount of grants being awarded instead of trying to get it right.

I’ve had a few ISP clients look at a rural area in detail. Several of them have told me that for every mapping fabric location that doesn’t exist, there is a missing location that should be in the fabric. They’ve concluded that the overall count of BEAD-eligible locations is generally not bad as long as you don’t worry about the errors in both directions.

Local governments and rural ISPs have known about this for a long time. Many local governments tried to fix the FCC fabric during the BEAD map challenge, but were told they couldn’t do it, and that the map challenge was only to identify if a location was served or unserved. State broadband offices told local governments to take such issues up with the FCC – a time-consuming and hit-and-miss process that wouldn’t fix a map in time for the BEAD grant process. Many folks who have tried to fix the FCC fabric have given up because of the complexity of making the requests.

All of this talk about getting the maps exactly right ignores the reality of broadband for farms. I recently talked to the manager of a rural electric cooperative who told me that one of his farmers wants broadband at five different locations, even though he has only one farm house. This farmer is like many others who have fully embraced the benefits of broadband for monitoring sites and performing tasks remotely through broadband. Farmers want broadband at corn dryers, silos, barns, grain silos, feed lots, you name it. I interviewed a farmer last year who told me that he feels more like an IT technician than a farmer most days. Everything this farmer does involves complex software and broadband.

I think it turns out that CostQuest has probably inadvertently identified a lot of farming locations that really are candidates for broadband. Maybe we shouldn’t be in such a hurry to wipe out rural locations on the FCC map.

Constraints on Satellite Broadband

In a 2024 end-of-year memo, Gary Bolton of the Fiber Broadband Association said that FBA had partnered with the consulting firm Cartesian to look at the pros and cons of Starlink in the U.S. FBA says that report shows that Starlink currently has 1.4 million customers in the U.S., and with the current satellite constellation has the capacity to serve 1.7 million customers.

FBA is a pro-fiber trade association, and as such, it probably takes the most pessimistic look at satellite capacity. The short summary I’ve seen of the Cartesian report says that satellite broadband has some natural limitations on capacity. The implied conclusion of the report is that Starlink can’t serve everybody in rural America.

Starlink has never claimed that ability or goal. However, since there are those advocating that most of the $42 billion BEAD grant award should go to satellite broadband, it’s fair to assess Starlink’s capacity.

Starlink currently has 6,957 working broadband satellites with the stated goal is to grow to 30,000 satellites. That would be a 430% increase, and if the FBA claimed limit of 1.7 million U.S. customers is right, that implies a future capacity of more than 7 million U.S. customers when the constellation is completed – which could be even higher if new satellites have more capacity than older ones.

One of the more important FBA claim is that Starlink has a limitation on the number of people that can be served in any geographic area. That seems to be true today as evidenced by reports that Starlink has quietly implemented waiting lists for service in some parts of the country, presumably due to local capacity.

Just as with any ISP, Starlink also has potential limitations due to backhaul. Starlink currently shows 64 working ground stations, with plans underway to complete 99. A ground station is where broadband traffic passes back and forth between satellites and the terrestrial Internet. Starlink can obviously build more ground stations in the future as needed.

Perhaps the biggest constraint on Starlink is getting the needed spectrum to communicate between satellites and ground stations. Roger Entner of Recon Analytics was quoted recently as saying that Starlink doesn’t have enough spectrum today and new spectrum doesn’t seem to be likely over the next several years. Anybody who follows filings at the FCC has seen numerous filings made by Starlink and cellular companies over the last five years arguing about the allocation of spectrum. A lot of the spectrum that Starlink needs is also currently being used by the military and other parts of the government. It seems likely that Starlink will eventually get the spectrum it needs, but spectrum fights have never been resolved quickly, and this will be a slow struggle.

I have to agree with FBA that Starlink isn’t prepared to handle everybody in rural America today – something I’m sure Starlink would acknowledge. The question that FBA is raising is if satellite capacity can grow quickly enough to meet increasing demands from BEAD plus normal growth. The BEAD program gives ISPs four years to implement BEAD awards. Starlink’s first satellite launch was in May 2019. Who knows what the company can do in four more years?