Tag Archives: BEAD Grants

Going, Going, Gone?

We now know the next BEAD fight, and it might be the biggest fight yet. On September 5, NTIA issued a press release talking about the progress of the Benefit of the Bargain round for States to award BEAD funding. The press release announced that 36 of 56 States and Territories have made tentative BEAD awards and have submitted their final proposals to NTIA.

The header of the Press Release is that “Plans include broad range of technologies and save American taxpayers at least $13 billion”. The Press Release went on to say, “In the plans submitted today, states are already projecting savings of at least $13 billion for American taxpayers”.

The $13 million referenced by NTIA is the difference between the funding allocated to each state for BEAD and the amount being awarded to BEAD grants. According to the IIJA legislation that created BEAD, any funds not spent on infrastructure were to remain with the States to pursue other activities related to improving broadband. The legislation included some specific examples related to activities that promote the adoption and meaningful use of high-speed internet, including workforce development, digital literacy training, subsidies for internet-capable devices, telehealth initiatives, and the installation of Wi-Fi in multi-unit residential buildings. States were free to propose other ideas, and many have.

When NTIA issued the new rules for making BEAD grants in June, the agency said that funding for non-deployment funds was under review. It’s now pretty clear that NTIA plans not to expend the non-deployment funds and take credit for saving the expenditure for the U.S. Treasury.

The $13 billion number will grow. That amount comes from the States that have already submitted final plans. If the same ratio of non-deployment funds holds for the remaining states, then the amount of non-deployment will be around $25 billion. There are ten States where the non-deployment funds are more than $500 million, led by North Carolina at $1.1 billion and Georgia at $1 billion. The others include Arkansas, Kentucky, Louisiana, Mississippi, Ohio, Tennessee, Virginia, and West Virginia. Interestingly, the amount of non-deployment funding grew significntly when NTIS stressed making BEAD awards to satellite technology.

I describe this as a fight because States aren’t going to easily let this funding go. First, States have worked hard to reach consensus for specific plans for using the non-deployment funds. As an example, West Virginia plans to use non-deployment funds to create a database of utility poles in the state, to update security on the State’s own network, to award grants for expanding rural cell towers, and for training programs for technical jobs in the telecom sector. These are typical of the plans in other States and all work to further broadband deployment.

States are also unhappy about the NTIA statement because the funds were directed by Congress, and States believe they are entitled to the non-deployment funds. Louisiana Gov. Jeff Landry sent a letter to Commerce Secretary Howard Lutnick this week that emphasized that the non-deployment funds belong to the State. In Louisiana, the non-deployment funds are in the range of $850 million.

It’s not hard to imagine a coalition of State Attorneys General from red and blue states together suing NTIA to get the non-deployment funds. There are similar lawsuits underway for withheld funding for healthcare and education.

The bottom line is that a lawsuit might be inevitable. NTIA statements make it clear that it wants to claim the savings by keeping the non-deployment funds, and there are States that are likely not going to let the funds go without a fight. But maybe there is a compromise somewhere in the middle.

Big ISPs and BEAD

I remember that within a month after BEAD was announced, there were a lot of predictions that the program was going to be a huge giveaway to the largest telcos and cable companies. There was some reason for that outlook since there had been huge giveaways to large telcos in the past, such as the $10 billion CAF II fiasco.

I felt optimistic from the beginning that BEAD would not all go to big companies due to the fact that BEAD was being driven by States, and not by federal grant programs. I expected that States would have widely varying ideas on how to award the grants. States lost a lot of the flexibility in choosing different types of winners after the NTIA revised the BEAD grants to basically be a one-round reverse auction.

We’re now starting to see some of the preliminary BEAD results, and it’s a mixed bag – with some states favoring large companies and others not. I call the awards preliminary because every grant award made by the States still has to be approved by NTIA, and nobody knows what they are going to do with the proposed grants. NTIA could go along with State recommendations or could force States to award more money to ISPs with the lowest bids for funding, like the satellite companies. That’s something that we may not know for months.

The following is an analysis of the 29 states that announced BEAD awards by August 29. My analysis only looks at the 23 states that have made BEAD awards of over $100 million. In the following analysis, I consider the following as large companies: AT&T, Brightspeed, Charter, Comcast, Consolidated Communications, Frontier, Mediacom, and Windstream.

There are seven states so far that have awarded 5% or less of the funding to large ISPs, led by Kansas, with no BEAD awards to large companies.There are five states that have awarded 50% or more of awards to large companies, led by North Carolina at 85.9%.Following are the amounts of awards to large companies in the 23 states that are awarding more than $100 million.The biggest surprise in that list is AT&T. Just a year ago, the company said it was still thinking about participating in BEAD. A little surprising is the relatively small size of BEAD awards to Charter, which had been so aggressive in winning RDOF. Note, however, that this list is far from final since some large states like Texas, California, Illinois, Missouri, and Florida have yet to announce BEAD grants.

The Spectrum Policy Mess

There was a recent article in LightReading that asked a great question – BEAD bet big on CBRS and 6 GHz bands, so why is Congress gutting them? Answering that question needs some context.

NTIA leaned into supporting fixed wireless throughout the BEAD process. During the original BEAD map challenge process, NTIA made it clear that locations covered by WISPs using licensed spectrum (CBRS) were to be considered as served as long as the WISP claimed the ability to deliver 100/20 Mbps broadband. There were vigorous challenges by governments and ISPs during that map challenge, so some areas served by licensed spectrum were kept as BEAD-eligible if speeds were below that threshold.

More recently, NTIA came out with a surprise decision that State Broadband Offices (SBOs) had to remove BEAD locations served by WISPs using only unlicensed spectrum. We’ll have to wait for the final count, but folks are speculating that this removed about 15% of the remaining BEAD-eligible locations nationwide.

It’s likely that the majority of rural WISPs will be incorporating 6 GHz spectrum into rural fixed wireless networks. If they haven’t done so yet, it will be a big component of future electronics upgrades. 6 GHz spectrum has wide channels that allow WISPs to deliver much faster speeds to customers within a reasonable distance from a tower.

When NTIA made the announcement that locations served by unlicensed WISPs are considered to be served, NTIA also changed the BEAD grant rules drastically and is allowing fixed wireless, cellular FWA, and satellite on the same playing field as fiber when choosing grant winners. NTIA is allowing SBOs to give some priority to fiber, but since NTIA also reserves the right to review every grant award, I think the priority for fiber is somewhat of a smokescreen. It seems clear that wireless carriers and satellite carriers are going to win a lot more BEAD locations than anybody ever anticipated. WISPs that win BEAD are going to be heavily reliant on CBRS and 6 GHz spectrum.

At the same time that BEAD was changing, Congress took a different path that poses a big threat to the availability of CBRS and 6 GHz spectrum. Congress has accepted the hype from cellular carriers that they will be running out of spectrum in a few years. The carriers even rolled out the old saw that the U.S. is losing the 5G race to China. My cynical take is that the carriers want more spectrum to expand FWA home wireless.

In the One Big Beautiful Bill, Congress renewed the FCC’s ability to hold spectrum auctions and instructed the FCC and NTIA to identify at least 800 megahertz of spectrum between 1.3 GHz and 10.5 GHz to be auctioned. The FCC must auction at least 300 megahertz of spectrum within two years, which must include at least 100 megahertz of the C-Band spectrum between 3.98-4.2 GHz. The bill carves out two bands of spectrum that cannot be considered for auction or relocation. The 3.1-3.25 GHz spectrum has been used by the military for many years. Also excluded is spectrum between 7.4-8.4 GHz, which is part of the X-Band spectrum that is used for military satellites.

The FCC and NTIA must identify 500 megahertz of other spectrum that will support full-power commercial licensed use cases. The new law does not protect CBRS spectrum, which sits at 3-55 – 3.7 GHz. This spectrum is used today by over 1,000 entities today such as WISPs, private networks, ports, schools, sports venues, hospitals, airports, and the DOD. The OBBB also doesn’t protect 6 GHz spectrum that is fully used today for WiFi. The FCC approved 6 GHz spectrum for WiFi in April 2020, and the spectrum is key to the ongoing deployment of WiFi 6 and WiFi 7, along with rural broadband.

There is no guarantee that the FCC will touch these two blocks of spectrum, but it’s going to be exceedingly hard to find 800 MHz of spectrum to auction without grabbing some or all of these two spectrum bands. There will obviously be a big battle from WISPs and the WiFi industry to protect CBRS and 6 GHz, but the FCC has the cover from Congress to allow them to raid the two spectrum bands.

As the LightReading article points out, NTIA and Congress are working at odds with each other. It’s not hard to envision BEAD grants going to WISPs and then watching WISPs lose the spectrum they need.

This whole mess comes from Congress meddling in spectrum policy – something they haven’t done before. The historical process was for the FCC to weigh the pros and cons of available spectrum and to pick the most beneficial use for each spectrum band. But Congress wanted to claim $85 billion in potential revenue from spectrum auctions to offset tax cuts.

I’ve talked to WISPs who say that losing CBRS and 6 GHz spectrum puts them out of business. That would leave them with the historic WiFi spectrum that has too few and overused channels.

The economy will suffer greatly in the long run if the cellular carriers are able to pull off this unprecedented raid on spectrum. Rural broadband will suffer a big hit. But the biggest hit to the economy would come from loss of WiFi spectrum, which fuels trillions of dollars of value across the economy.

Final BEAD Rules Released

The guessing game is over since NTIA has released the final rules about how the new BEAD grant process will work. Unfortunately, it’s still impossible to make any guesses about the percentage of BEAD that will be awarded to fiber or other technologies. There have been both optimistic and pessimistic predictions of awards for fiber written in the last few weeks, and as you’ll see below, there is still no way to guess who is right.

There are a few things we know. It’s clear that a lot of State Broadband Offices (SBOs) still want to maximize the amount of awards made to fiber. We also know that overall eligible BEAD locations are being reduced by allowing a map challenge from WISPs that use unlicensed spectrum. Preliminary estimates are that as many as 15% of BEAD passings might be removed from the grant process, but we’ll have to wait and see if WISPs use this challenge.

NTIA has specified the process for SBOs to make proposed grant awards. The highlight of that process is as follows:

  • SBOs must start over, and all ISPs will be invited to bid in a single Benefit of the Bargain grant round (this is probably the dumbest new industry term I can recall).
  • SBOS can designate a project as a Priority Broadband Projects, meaning projects that get the first crack at funding (see more below). In areas where more than one priority project is eligible for funding, the ISP asking for the lowest amount of grant funding per passing wins, with the caveat that an SBO can award the grant to a project that is no more than 15% higher than the lowest bidder.
  • Areas with no priority projects are directly awarded to the ISP asking for the lowest amount of funding.
  • SBOs are given a number of options to find ISPs willing to serve locations that nobody has requested to serve.

Priority Broadband Projects. An SBO gets to decide if a given grant application is going to be designated as a Priority Broadband Project. To meet this requirement, a proposed project has to 1) be able to deliver 100/20 Mbps service today with a latency under 100 milliseconds, 2) be able to scale over time to meet evolving connectivity needs of households and businesses, and 3) support the deployment of 5G and successor wireless technologies and other advanced services.

The second requirement implies that an SBO can determine some future goal faster than 100/20 Mbps that applicants must agree to eventually meet. The new rules don’t specify how to do this. I’ve already seen a few SBOs suggesting ultimate speeds between 200 and 300 Mbps download. Faster future speed requirements might be a reason for not giving satellite a priority designation, but WISPs would likely qualify.

The last test for supporting 5G is a harder hurdle to satisfy. It’s clear that building last-mile fiber supports 5G and future wireless technologies, because new 5G towers or repeaters can be placed anywhere in a last-mile fiber network. This will be harder for a WISP to guarantee. A WISP might be able to meet this requirement if they are building a BEAD network that includes fiber backhaul to towers instead of using wireless backhaul. A WISP that isn’t proposing to build some fiber is going to have a challenge to meet this requirement.

The bottom line is that it should be easy to designate last-mile fiber projects as priority. WISPs have more of a challenge in being designated as a priority project, and I expect some WISPs will achieve this designation and others won’t, depending on the proposed network and specific technology. It seems to be easy to exclude satellite service from the priority designation.

NTIA Taking an Active Role in BEAD Awards. There is a new surprise rule that means that tentative grants awarded using the above rules might still not be final. NTIA has made it clear to SBOs that it must be kept in the loop during the entire grant process. The ultimate touchpoint is that NTIA wants to see and approve every proposed grant award.

There is no end to the ways that NTIA could exercise this power. The folks making optimistic predictions for fiber awards could be right and NTIA could elect to let SBOs call the shots and could rubber-stamp most proposed grants.

However, there has been a lot of speculation that Commerce wants to significantly reduce the size of the $42.5 billion program, and having the final approval might be the mechanism for lowering grant outlays. NTIA might set an arbitrary cap on the amount if BEAD per passing for fiber awards. NTIA might veto grants made for fiber if a WISP or satellite provider offers a lower price for the same area, which would largely undo the priority areas designation. NTIA might override proposed grant awards in blue states but not red states, in large states but not small ones, or for small ISPs but not big ones. NTIA could decide that Starlink gets no grants, if we are to believe the current spat between Elon Musk and the administration.

Unless somebody has inside knowledge of NTIA’s intentions for awarding grants, it’s impossible to guess what NTIA might do with its power to approve grant awards. I’m done guessing the amount of fiber that will be built by BEAD. At this point, I think we’ll have to wait until September to see what pops out of the BEAD award process.

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