Tag Archives: BEAD Grants

Is it Too Late to Change BEAD?

There has been a lot of speculation since the election that the BEAD grant program is going to get revamped. I’ve heard speculation that a lot more money might go to satellite broadband. There have been rumblings that some in Congress want to relax some of the harsher BEAD rules that make it harder and more expensive to build new broadband networks.

In the midst of this speculation, the State of Louisiana announced that it has tentatively chosen the winners of its $748 million BEAD program. The next step is for the State to submit a report to the NTIA asking for permission to make formal grant offers to the winning ISPs.

The BEAD process in Louisiana seems to have worked in the way that Congress intended when it formulated the rules. More than 95% of the 140,000 BEAD-eligible locations are slated to get fiber from the awards, with the rest going to satellite and fixed wireless. 70% of the BEAD dollars are being awarded to ISPs based in the State. Over half of the award went to a consortium of local ISPs.

While Louisiana was the fastest to the finish line, a lot more states plan to open BEAD grant portals before the end of this year and start to accept grant applications. While it look a long time to reach this point, a lot of states are now on a path to choose grant winners.

This raises the interesting question if it’s too late for a new administration to make major changes to the BEAD program. It seems highly likely that Louisiana, and probably a few more states will have approval from the NTIA to make grant awards before the January 20 inauguration. A whole lot more states will have a list of tentative grant winners by then for most of their available BEAD funds.

There is also the question of the process needed to change the BEAD rules. The BEAD rules were created by Congress, and it seems that Congress would have to act to change the rules. It seems plausible that Congress could act to relax some of the BEAD rules it doesn’t like. I know that ISPs would welcome changes that remove some of the burdensome administration and reporting rules that come with BEAD. Congress could change some of these rules next year and make the changes retroactive for any grants that have already been awarded. There would be relief around the industry to see rules like mandatory environmental studies and required low rates eliminated.

A new administration will almost certainly change the folks heading the NTIA, and in doing so would control the purse strings for the many states that haven’t finished the BEAD award process. My understanding of the process is that once NTIA blesses a State’s grant awards that the money is flowed to the States to begin awarding grants. I have to think that Louisiana and other states will fight hard against any federal attempt to claw back funds that have already been awarded to build fiber.

A new administration and a new NTIA could easily change the grant award rules for states that haven’t completed the grant process. But we can’t forget about Congress in this process. Rural broadband is a popular cause for politicians, and I wonder how many would vote for drastic changes that would impact their own states? Could Congress really get a majority vote to cut back or drastically modify a popular program? Would the administration really want to use political capital for this issue when there are many other prioities for the new administration?

There are several ways the administration could give more funding for satellite. For example, they could pause work at NTIA until they figure out the path to do that. But if Congress has to go along with any major changes, this is not necessarily an easy path. Putting BEAD on hold would mean the administration would be delaying broadband implementation – something that Republican Senators have been complaining about the NTIA for the last year.

The administration can obviously do anything it wants with BEAD starting with the inauguration, with the caveat that Congress is going to want a say in big changes. But I’m not sure that there is much that can done about grant awards that have already been funded before that date

The New Administration and BEAD

I’ve been peppered with questions about the impact of the change of administration on the BEAD grant program. I don’t have any better crystal ball than anybody else. But it’s not hard to speculate on the kinds of changes that might come.

There are a few facts that should be considered in any speculation. First, while the BEAD program has taken a long time, a lot of states will have open grant portals and will be reviewing grant applications before the inauguration. This doesn’t mean those grant applications can’t be shelved, but if one of the goals is to spend the money quickly, that could be a consideration. The second is that it’s likely that the decision-makers at the NTIA are already bailing, and the agency will be emptying out. That’s significant because the NTIA has been micromanaging the BEAD process, which plays a big part in the slowness of the program. I’m not sure what States with open issues at NTIA will be able to accomplish – it seems unlikely for any temporary administrators to go out on a limb to make tough calls.

What are some of the possible paths for BEAD:

More BEAD for Satellite Broadband. With Elon Musk being part of the administration, it seems inevitable that satellite broadband will get a bigger piece of the BEAD pie. Recall that the NTIA had already opened the door to Starlink in BEAD, but the process was voluntary for states. There are a whole lot of easy ways to include satellite, with the easiest being to assign all high-cost areas to the company. But it will likely be more complicated than that.

Changing the BEAD Rules. A group of Senators have been complaining about BEAD rules for more than a year.  The complaints against BEAD range from the way the money was assigned to states, the requirement in many states for low broadband rates, the big emphasis on building fiber, the requirement for prevailing wages, and using BEAD funding to build fiber to locations owned by the wealthy. Some of the things the Senators don’t like are baked into the BEAD legislation and would need Congress to change. There are two paths I can foresee for changing other rules. The first is to put the program on hold to incorporate any rule changes. The other option would be to tell ISPs about pending changes and to deal with them when BEAD grant contracts are negotiated.

Spend the Money Faster. One of the current criticisms about BEAD I keep hearing is that money won’t flow until late 2025. That is due to an NTIA requirement that a State must find a solution for every location before any grants can be awarded. Get rid of that rule and grants could be awarded and money could start flowing in the first quarter. The other way to speed up the spending is to do away with environmental studies for any project that will build fiber in existing public rights-of-way.

Cut the Size of the Program. I’ve seen some speculation about clawing back BEAD funding – which means not making the grant awards and keeping the money in the federal coffers. Industry insiders think broadband is too important for this to happen. However, if there is a big political movement to undo President Biden’s signature accomplishment, then infrastructure spending of all types could be curtailed, and it’s naïve to think that broadband spending couldn’t get swept into a bigger effort to cut spending. It’s not hard to imagine cutting the program to $10 billion, giving the money to Starlink, and declaring rural broadband to be solved.

Do Nothing. There is always a chance that no changes will be made to BEAD and it will play its course this year. But this seems unlikely with $42 billion in spending dangling for the taking. At the end of the day, any changes to be BEAD will be about who gets the money.

Comparing State Broadband Performance

Ookla recently published a report that compares broadband connectivity and performance in each state. The report highlights the percentage of broadband customers who are receiving broadband speeds that meet the FCC’s definition of broadband of 100/20 Mbps.  This is also the speed threshold being used for the $42.5 billion BEAD grant program, which is supposed to provide grants to every part of the country that can’t achieve 100/20 Mbps. Ookla is the largest and most commonly used speed test in the country and receives millions of tests each day, so these comparisons are based on huge numbers of speed tests.

The Ookla results are interesting and give states a way to compare themselves to peer states. Connecticut, North Dakota, Maryland, Delaware, Rhode Island, and Tennessee had the highest percentage of speed tests that met the 100/20 Mbps threshold. downstream and 20 Mbps upstream. Each state had over 62% of speed tests faster than 100/20 Mbps – with Connecticut at 65.8% and Tennessee at 62.2%.

Ookla also got more granular in its analysis. For example, the analysis compared average speed tests result in each state for urban and rural broadband customers. There is a map in the report that industry folks are going to want to explore. This comparison produced some interesting results:

  • Connecticut, which has the overall highest percentage of homes receiving 100/20 Mbps had 72.4% of urban households and 62.3% of rural households receiving that speed. Number two overall fastest was North Dakota which had 69.7% urban and 64.6% rural.
  • The state with the biggest urban/rural digital divide was Washington, with 61.1% of urban households and only 28.7% or rural households receiving 100/20 Mbps.
  • South Carolina has a higher percentage of rural homes receiving fast speeds (56.4%) than urban homes (55.1%). The other states where urban and rural broadband performance is similar are North Dakota and Nevada.
  • Some of the most populous states had low rural broadband speeds including Illinois (38.7%), New York (39.4%), and California (40.1%).
  • The states with the lowest percentage of rural homes meeting 100/20 Mbps are also the least densely populated – Alaska (17.3%), Montana (20.8%), and Wyoming (25.3%).
  • The other states with percentage of rural broadband coverage under 40% include New Mexico (29.4%), Wisconsin (31.4%), Oregon (32.2%), Idaho (34.1%), Michigan (37.5%), and Maine (37.6%). These are the states that will require a heavy life from BEAD grants.
  • Some states are probably surprising to those outside of the industry. The best example is Mississippi, which historically had poor broadband coverage. However, the analysis shows urban coverage at 62.3% and rural at 56.6%. There is a lot of industry derision aimed at the RDOF program, but that program enabled rural electric coops in the state to build fiber.
  • Finally, a few states showed big improvement between the first two quarters and 2023 and the first two quarters in 2024. The states with the biggest improvements are New Mexico (50%), Arizona, (45%), Minnesota (38%), and Nevada (37%).

Anybody who looks closely at speed test results will quickly understand that any given speed test might not be accurate because of issues inside a home. A home might receive adequate broadband, but an old or underperforming WiFi router might lower the speed delivered to devices. WiFi is also subject to distance and interference issues, and computers located at the far end of a house might receive significantly slower speeds.

However, when taken in mass, speed tests provide an accurate comparison – if you assume that WiFi is a problem everywhere. This means is that every state actually has a higher percentage of homes that receive 100/20 Mbps than shown by the Ookla numbers. However, the relative differences between states, or between urban and rural parts of states are believable.

Starlink and Broadband Subsidies

The House Oversight Committee recently decided to investigate the FCC’s decision in 2022 to deny RDOF funding to Starlink. Anybody who has been reading this blog knows that I don’t take political positions, and the timing of this announcement clearly has political overtones since it was announced as Elon Musk took the stage at a campaign event with one of the presidential candidates. However, there were a few technical and policy issues raised recently about Starlink that means the issue is worth discussing.

I should make my own position on Starlink known upfront. I happen to live in a city, but if I was in a rural area with no good broadband option, I would have been one of the first people on the Starlink waiting list years ago. I think the broadband they bring into areas with no other options is awesome. Their products aimed at folks who are largely mobile are also unique and valuable.

The House announcement praised Starlink for helping the areas destroyed by Hurricane Helene. I live in western North Carolina, and Starlink got some good press here from its willingness to bring broadband to help areas without it. Starlink offered a free month of service, and I’m sure they gained new customers through that offer. But a new subscriber still had to pay for the receiver, and the logistics of getting a receiver delivered to rural areas post-hurricane were daunting – there are still many places that can’t be reached by vehicle. Also, unfortunately, the areas that need broadband the most are still without power.

But back to the issue of RDOF. The subsidy was awarded using a reverse auction, where the ISP willing to take the lowest amount of subsidy winning the funding. RDOF had two key requirements – the ability to deliver broadband of at least 100/20 Mbps, and the ability to serve every home and business inside a Census block that got the award.

The FCC finally decided to reject Starlink on the speed issue. When Starlink applied to enter the RDOF reverse auction, it said it could meet the 100/20 Mbps speed goal. And it looked for a while like it might. In the first quarter of 2021, Ookla says Starlink had an average U.S. speed of 66/16 Mbps but improved to 91/11 Mbps by the second quarter of 2022. However, since then, the speeds have slipped, and for the whole U.S. Ookla says speeds were 67/8 Mbps at the end of 2023 and a little slower in the first quarter of 2024.

Starlink has done a phenomenal job launching satellites and now has 6,371 functional satellites in orbit. But Starlink is like any ISP might be a victim of its own success – the slower speeds over time probably reflects that the number of customers has outpaced the number of satellites. The FCC was justified in rejecting the RDOF on the speed issue – the FCC 100/20 Mbps goal was not aspirational, but a real technical requirement.

The FCC could also have rejected Starlink on the coverage issue as well. One of the benefits of winning the RDOF subsidy is that winners were protected from any other ISPs receiving subsidies to build in the same Census blocks. For all practical purposes, RDOF winners in rural places were granted a monopoly – but for that award they were expected to be able to serve everybody.

In the early years, when it didn’t have a lot of satellites, Starlink put prospective customers on a wait list. The wait lists have disappeared, and Starlink is now willing to serve almost everybody in the U.S. – although there are a few places with geographical challenges where the company doesn’t claim the ability to serve.

The issue with coverage is that not everybody is a good candidate for Starlink. I live on a steep hill and am surrounded by other hills in all directions. I would guess that 35% to 45% of my view of the sky is blocked. My situation is not unusual in Appalachia, and much of the mountainous West and Southwest. If Starlink had only applied for RDOF in relatively flat areas, this would not have been an issue. However, Starlink won a lot of geography in RDOF in places like western North Carolina and the rest of Appalachia.

Starlink reception is also hindered by heavy foliage. The suggested solution for this is to put the receiver where this is not an issue. But there were places in the RDOF award areas that are fully covered by a forest canopy.

Interestingly, Starlink is back in the conversation in the BEAD grant process. Those awards are supposed to bring a broadband solution to every unserved and underserved location in the country. In every market, there are some locations where building other technologies is infeasible. NTIA prudently decided recently that Starlink is probably the only realistic solution for such places.

Unfortunately, some states say they don’t have enough money to reach everybody with fiber and/or wireless, and Starlink might get the final laugh by winning more subsidy from BEAD grants than it was denied for RDOF.

Grant Bottlenecks

Cardinal News, a newspaper for Southwest and southside Virginia recently published an article that says that as many as two-thirds of the State broadband grants awarded in 2022 have fallen behind schedule.

The reasons for the delays in the Virginia grant projects are familiar to every ISP who has built a new network. The primary issue in Virginia has been the make-ready process for poles. This is work that must be done to make poles ready to accept a new fiber. Some poles require no make-ready, some require a rearrangement of existing wires, and many unfortunately require replacing an existing pole.

Some of the projects were delayed due to the paperwork needed before the physical make-ready process could begin. This includes getting pole attachment agreements in place and having engineers decide on the make-ready work needed for each pole. Once that process is complete, there are rules that dictate the make-ready timeline.

Virginia has elected to remain under FCC jurisdiction and rules for pole issues, but the State passed a law in July specifically intended to speed up make-ready work. But frankly, any rules or laws about pole access are nearly meaningless in places like the Appalachian regions of southern Virginia, where poles run through heavily wooded areas. It takes longer to tackle this work in rural, hilly areas on windy roads. It’s not going to help that some of the projects in southwestern Virginia now had to deal with damages from Hurricane Helene.

The reason I wrote the bog was not to highlight the Virginia issues, because it sounds like the State is on top of the issues and that the projects will likely get completed before hitting the end of 2026 when the federal funding for these projects expires. Virginia is also ahead of most other states in that the State set aside additional funding to help keep broadband projects on track. The reason for the blog was to highlight the likely delays that are going to happen when BEAD grants hit the ground.

It was originally thought that States would be on significantly different schedules for BEAD. However, the NTIA implemented a 365-day shot clock that requires States to make grant awards within a year after getting approval of a State’s Volume II BEAD rules. This means that within a six to nine month window, all BEAD grant projects are going to get rolling at the same time.

I’ve always anticipated that there will be bottlenecks created by the large volume of BEAD grants, but having all of the grants launched within a narrow time window will aggrevate the issue. Consider a big electric company like Duke Energy that operates in multiple states in the Southeast. The company is going to be asked to deal with a lot of BEAD projects at the same time. All of the regulatory rules in the world are not going to help the inevitable bottleneck that a large utility will face in 2025 when multiple ISPs and projects try to get a response from the legal teams and engineers at a utility at the same time. Most States are going to throw extra money at trying to overcome the make-ready bottlenecks as Virginia has done.

Make-ready is only one of the issues that is going to cause delays. I’ve written before about the issues involved in permitting, acquiring rights-of-way and easements, and locating underground utilities that can all bog down fiber projects before they even get started.

Most State Broadband Offices have already indicated that they are going to pressure ISPs to sign contracts to complete projects in two, three, or four years, depending on the size of a project. ISPs will likely have to agree to these timelines, even when they know that delays may make it impossible to meet such a promise.

The good news is there is a longer time frame until BEAD dollars expire, but I fully expect in a few years to see more articles like the one in the Cardinal News wondering why it’s taking so long to build the promised broadband networks.

Grant Reimbursement

Now that Broadband Offices have started the process of soliciting BEAD grant applications, I thought I’d discuss a topics that anybody who wins a BEAD grant is going to care about – how a Broadband Office will reimburse grant winners for making expenditures. You might think this is straightforward, but unfortunately it is not. Grant offices are taking a wide variety of approaches to how they reimburse ISPs for grant expenditures.

From an ISP perspective, the ideal reimbursement plan would flow money to a grant recipient each month based on invoices of real expenditures that are submitted to a grant office. This is the process used in the commercial world for the many companies that make and build things. Every two to four weeks they submit invoices for the work done and quickly get paid. The payee will audit the invoices, and if something was paid that shouldn’t have been, it is netted off the next payment. In the financial world I’ve always heard this referred to as the true-up process. There is a regular process of paying, with adjustments made on the fly as errors or changes are discovered by either party.

Unfortunately, very few broadband offices are going to be that easy, and some and are going to go to the other extreme. Some broadband offices are going to be paranoid about paying for something they should have. Such offices will take the approach of verifying every invoice before making a payment. I’ve seen this manifested in the past. For example, there are states that only paid once per quarter for state broadband grants. This results in long delays between the time that expenses were incurred and then reimbursement collected.

Some states are slow payers in general. When I’ve done work for states or large city governments, it’s not been unusual to routinely wait three or four months to get paid. Such states typically have a byzantine internal payment system that makes it challenging to make payments, even when somebody internally tries to speed up the process.

One of the scariest scenarios for BEAD grant reimbursements is to get paid on milestones. That means payments will be based on completing tasks that were contractually agreed upon. For example, a State Broadband Office might divide a grant network into segments, and only reimburse for any section when it has been completely built and the fiber lit. This kind of payment scheme can be scary for an ISP since everybody who builds a network knows that there are sometimes small events that stop completion of a given neighborhood. Perhaps there are a few troublesome poles that are taking forever because of make-ready, or perhaps there is a backorder for a cabinet that has to go in the neighborhood. Such an area could be 90% completed for months, with most customers connected – but not eligible for grant reimbursement until construction is 100% done.

Another worrisome milestone is to be reimbursed for each customer connected. Most large construction projects spend the majority of the money building the underlying network in the first half of the project and spend the money to connect customers in the second half. This could mean waiting a really long time to get reimbursed for the underlying network costs.

There are grant offices attuned to this issue. There are a few state broadband offices that paid out 20% or more of a state broadband grant on day one to allow an ISP to order the needed materials. These offices reasoned correctly that allowing ISPs to buy materials upfront removes inflation from that part of the project.

Why does the method of payment matter? It probably doesn’t to giant ISPs. They can float the cash and can wait to get paid. But slow payments can be deadly to a smaller ISP. I have one client who turned down a state grant when he was presented with a contract that showed there would be a 3 – 4 month delay in payments. This ISP knew he wouldn’t be able to make payroll with that kind of delay and feared having vendors hounding him during the entire grant process. This could be mitigated by getting a line of credit to borrow against – but that adds even more cost to the grant project.

The bottom line is that if you are going for BEAD grants, you might want to ask now how the broadband office plans to pay you. Hopefully you are in a state where you will like the response.

Cox Sues Rhode Island

In news that probably makes all State Broadband Offices nervous, Cox Communications has sued the Rhode Island Commerce Commission – which is the group that is heading up the BEAD grant effort. This raises the uncomfortable position that ISPs who feel shorted in the BEAD process could sue Broadband Offices as a way to be heard.

What’s particularly uncomfortable about the Rhode Island lawsuit is that the issues at the heart of the complaint involves the broadband maps used for BEAD grants. I doubt that any Broadband Office is comfortable with their BEAD maps. These maps derive from the FCC broadband maps, and each state modifies the maps through a BEAD map challenge process. Every time I’ve sat with an ISP or a county government and looked at the maps at the household level that there are still many aspects of the maps that are disturbing. The maps include eligible BEAD locations where there are no buildings, multiple BEAD locations where there is only one building or buildings that don’t have an associated BEAD location. The degree to which the maps are off differs from neighborhood to neighborhood. Of more concern and germane to this lawsuit are the broadband speeds claimed at every location – many speeds are clearly fictional and come from the FCC rule that allows ISPs to report ‘marketing’ speeds on the maps rather than some approximation of actual speeds.

The Cox challenge says the State is trying to award BEAD dollars to affluent parts of the state that don’t need broadband while missing areas that could use the grant help. There are already quotes in the press from the State complaining that that Cox didn’t participate in the BEAD data gathering or map challenge process.

Cox goes on to accuse the State of using a map challenge process that is impossible to follow. The suggestions on how to conduct a BEAD challenge came from the NTIA, and the rules are hard to meet. To provide or disprove having broadband at a location requires conducting multiple speed tests at different times of the day – something that is hard to convince a resident to do. The tests have to be conducted during a short time frame during a map challenge process. Cox gave the example of how impossible it would be for them to gather the needed speed tests from their own customers.

I heard the same complaint from local governments that tried to meet the speed challenge rules but couldn’t. A local government doesn’t know who subscribes to each ISP, and before even thinking of mounting a map challenge against a specific ISP they had to somehow find customers of that ISP willing to take the challenge.

I don’t know enough about the Rhode Island situation to have an opinion. What is troublesome about the lawsuit is that it’s bound to put the BEAD grant process in the State on hold. A judge is unlikely to let the State move forward with the BEAD grant, since doing so would be essentially siding with the State without considering Cox’s side of the story.

There are ISPs all over the country who are unhappy with the BEAD maps and the state BEAD map challenges. Any one of them could sue if a State rules against them in the map challenge process.

The threat of lawsuits goes way beyond just the mapping issues. It’s not impossible to foresee somebody suing State Broadband Offices over other issues. For example, some states are forcing BEAD winners to offer low rates – something that specifically prohibited in the IIJA legislation. There are states that have taken positions against using technologies other than fiber. There are states that are trying to require an ISP to serve entire county to qualify for a grant. Any one of these decisions disadvantages somebody and could lead to suits.

Any lawsuits against a State Broadband Office will mean an interminable delay. For example, even if Rhode Island concedes that the map challenge rules were unfair, it would probably have to open the map challenge again using a new set of rules.

Is BEAD a 10-Year Program?

Politico ran an article earlier this month by John Hendel that noted the slow pace of the BEAD grant program. It’s a newsworthy topic because during the current election cycle I’ve heard Democrats mention fixing rural broadband as one of their accomplishments.

There is one paragraph in that article that instantly caught my eye. The government is executing BEAD “on the 10-year timeline Congress intended,” a spokesperson for the National Telecommunications and Information Administration, the Commerce Department agency tasked with overseeing the program, told POLITICO.

This is the first time I’ve heard that BEAD was intended to be a 10-year plan. I can recall numerous occasions during the BEAD process when the public was told that the goal was to solve rural broadband. I sat through numerous public meetings where State Broadband offices met with the public and the message was always that rural broadband is a huge problem and the goal was to start fixing it as quickly as is practical.

There were a lot of other big infrastructure programs funded by the IIJA that are moving faster than BEAD. Consider the Bridge Investment Program (BIP). This is a $40 billion program for bridge replacement, rehabilitation, preservation, and protection. The U.S. Department of Transportation started to accept BIP grant applications in December 2023. That’s roughly a year faster than BEAD. There are many other examples of spending that have already been made from the same infrastructure legislation.

I have a hard time believing that it’s faster and easier create the engineering studies needed to build or fix a bridge than it is to design a broadband network. Any local government that applied for a BIP bridge grant will already have done the detailed engineering analysis needed to quantify the amount of grant needed.

Unfortunately, BEAD is almost turning into a 10-year program. States will be making BEAD awards starting sometime in 2025. A State can’t make a grant award until they find an ISP to serve every unserved and underserved location and also gotten NTIA approval for the full pile of awards. I don’t expect more than perhaps a few token customers to be connected to a BEAD-constructed network in 2025. ISPs will have up to four years after grant contracts have been signed. This means that if everything works as planned, some BEAD projects won’t be completed until sometime in 2029 – the eighth year after the BEAD program was created by Congress.

There would have been a huge outcry inside the industry and from the rural politicians if NTIA had formally announced years ago that BEAD was intended to be a 10-year grant program. There have been countless opportunities for NTIA to have made this claim, and it is only now arising in a quote given to a reporter from a political site. We can’t know who provided the quote to Politco, but if this is an official line, then NTIA is throwing up a smoke screen to cover for the slowness of the program. It’s disappointing to know that a rural household without good broadband will see a student who was in the sixth grade when BEAD was announced graduate from high school without seeing any improvement from the BEAD program.

A Tale of Two Grant Programs

Pretty much everybody in the industry agrees that the BEAD grant process has taken too long. The IIJA legislation that authorized BEAD was signed into law in November 2021. A few states are now opening a grant portal to accept BEAD grant applications – nearly three years after the legislation was passed.

Not all grant programs have taken this long. An interesting contrast to BEAD is another huge-dollar federal grant program, the Capital Project Fund (CPF). That was a $10 billion broadband grant program that was part of legislation for the American Rescue Plan that was enacted in March 2021. The two grant programs have a few things in common. Both are to build broadband infrastructure in unserved and underserved areas. Both grant programs give federal money to States to choose grant winners. But there is a stark difference in the way the two programs have been operated.

Capital Project Fund Grants. Following are a few key steps in this grant program.

  • This was funded by the American Rescue Plan Act on March 11, 2021.
  • The funding ranged from $106 million for D.C. to $540 million for California.
  • The program was administered by the U.S. Department of Treasury.
  • States had until September 2022 to file a grant plan for using the funds. For states that didn’t have a state broadband office, this meant scrambling to decide who was going to administer and operate the grant program.
  • Some states moved quickly, and on June 7, 2022, Louisiana, New Hampshire, Virginia, and West Virginia were approved to receive funding. The rest of the states were approved throughout the year.
  • States were free to start the grant process as soon as they were awarded the funding.

That’s 15 months from the legislation to the first states being able to launch a grant program. States didn’t need any further approval from Treasury to give funds to grant winners, so there were broadband grants awarded in 2022. States differed in the speed of awarding grants, but the money got in their hands relatively easily with limited strings attached.

BEAD Grants. Following are some of the important steps in the BEAD timeline:

  • Funded by the Infrastructure, Investment and Jobs Act in November 2021.
  • The program is administered by the NTIA.
  • BEAD NOFO (basic rules) issued in May 2022.
  • BEAD planning grants were awarded to each participating state to help cover the cost of launching BEAD.
  • States had to create a five-year broadband action plan. Not to belittle that process, but I imagine very few of those plans will ever again see the light of day.
  • A significant delay came when the NTIA had to bless the FCC broadband map. The early FCC maps clearly had problems, and this added at least six months to the timeline.
  • States had to create a Volume 1 report that defined areas with existing broadband funding and that identified unserved and underserved locations. When NTIA approves the plan, states could start the BEAD map challenge.
  • States had to file a Volume 2 manual that discussed a specific proposal for operating the grant process. Approval of Volume 2 starts a 365-day shot clock, and a state is supposed to choose grant winners within that time.

That means almost three years after the legislation before the first state started to solicit grant applications. But that’s not the end of the process.

  • NTIA recently suggested new rules for states that want to consider using alternate technologies. That’s going to add steps and time to the grant process.
  • States can’t award BEAD grants when they choose grant winners. The state must first find an ISP to serve every eligible location.
  • A State must then write a report to the NTIA about its plans to award grants. States are only free to start awarding grants after this final NTIA approval.

In addition to taking longer, BEAD is far more complicated. The NTIA went so far as to hire employees to act as liaisons to the states to navigate the paperwork process.

I was hopeful when I first read the IIJA legislation and saw that the money would go to states. By that time, it was already clear that the CPF funding process was moving well. However, it quickly became apparent that NTIA was going to implement BEAD one deliberate step at a time. Some of the BEAD timeline delays can be directly attributed to Congress, which legislated that the grant program must use the newly minted FCC broadband maps – but even without that delay, BEAD has been far more ponderous and agonizingly slow compared to CPF.

The biggest difference between the two grant programs is that Treasury fully trusted States to make grant awards within some rule boundaries, while NTIA micromanaged the process from beginning to end.

BEAD and the Political Calendar

We don’t need any more delays in the BEAD grant process, but there are potential delays on the horizon due to the political calendar. The delays in the BEAD grant process have felt interminable by rural folks hoping for better broadband. We are approaching the three year anniversary of the passage of the IIJA legislation that created the grant program, and there hasn’t yet been a dollar of grant funding.

What do I mean by political calendar? There is going to be a new president in the White House, and that means a change in many of the people who run various cabinets and agencies. This means a new Secretary of Commerce, the agency that sits atop the NTIA. It could mean a new head of the NTIA, which is run by an Assistant Secretary of Commerce. Changes could go a lot deeper, because it’s not unusual for a number of lower-level staff at an agency like the NTIA to leave when their appointed bosses leave.

This matters because NTIA will still play an active role in the BEAD grant process next year. The NTIA must approve the grant awards made for each State. In fact, no money will flow to grant winners until the NTIA blesses the entire pile of grants that are being proposed to be awarded by each State Broadband Office. BEAD is not like other grants where a Broadband Office can start making awards to ISPs as it approves each grant. A Broadband Office must find a solution for every unserved home, then package a detailed report to the NTIA about the grant award process. Money doesn’t flow to any grant winner until NTIA blesses all of the grants in a state. It’s also possible that the NTIA will review grant contracts with grant winners – or at least the template a state plans to use.

Changing people means disruptions at the NTIA. It could easily take much of next year to replace empty positions. During the interim, the responsibilities for keeping BEAD moving will fall to whoever is temporarily in charge at the NTIA. That could mean one of two things – a temporary head of NTIA might decide to rubber stamp everything States are doing, or they could take a cautious approach to not make any mistakes.

There could be an even bigger problem if the Republicans win the White House. Republican Senators have been complaining over the last few years that the NTIA has reached too far with some of its BEAD policies. A letter from Senator John Thune captures most of the issues. He says the NTIA has gone too far with many labor requirements. He says that BEAD rules incorrectly stress giving grants to government-owned networks. He says that the BEAD are not technology-neutral, and stress fiber over other acceptable technologies. The area of biggest unhappiness with BEAD is that State BEAD rules are pushing for low rates, which goes against the language in the legislation. He also complains that BEAD asks applicants to discuss how their proposals account for climate change – something that was not in the legislation. And finally, he thinks the NTIA should be more open to granting waivers from Buy American rules if that speeds up the construction process. I’ve heard many of these complaints from ISPs.

It’s not hard to imagine a Republican administration putting the BEAD grant process on hold until at least some of these issues are addressed. And it’s not hard to imagine that any pause due to politics could add a ton of time to the BEAD process.

There have also been rumblings from some Republicans about cutting off any unspent stimulus funding for infrastructure since they blame inflation on excess government spending. Improving broadband might be safe since better broadband is a popular issue in red states and the support for rural broadband has been largely non-partisan. However, it’s not impossible that unspent BEAD money could get slashed or curtailed if there is a larger move to cut government spending.

All of this could have been avoided if BEAD grants had been awarded within the three years since passage of the IIJA. But the glacial pace of administering BEAD has pushed the program into the middle of the normal and expected political process.