Tag Archives: BEAD

Broadband Shorts September 2026

The following are topics I found interesting, but which don’t warrant a full blog – although the first item might still be expanded.

NTIA Announces a New Round of BEAD Funding. In a surprise announcement, NTIA told state broadband offices it is going to allow them to hold a new round of infrastructure grant awards using some of the money from the leftover non-deployment funds. I remember at one point that the agency said that BEAD has effectively solved the rural broadband problem. But this announcement acknowledges that there are still locations that won’t have good broadband after BEAD has been fully implemented. Many of the locations that will likely be part of new awards are those that current grant awardees are walking away from. ISPs have been loudly complaining that the level of funding from the Benefit of the Bargain round of BEAD pushed the awards too low to make economic sense, particularly considering the current high rate of inflation related to telecom construction. States are still eagerly awaiting news of the disposition of the rest of the non-deployment funds, which at this point represent more than half of the funding for BEAD established by Congress.

AT&T Stops Reporting Copper Customers. In its latest quarterly report, AT&T stopped reporting on the number of copper customers still using DSL. The company is still reporting on legacy revenues, and the company said that the legacy segment revenues dropped by $570 million for the quarter compared to a year earlier. I think there are likely several reasons why the company made this change. First, they are in the midst of a major effort to walk away from copper technology across the country, and it’s likely that they don’t want to highlight the number of people who are being booted from DSL. I’ve seen estimates that they will have walked away from hundreds of copper wire centers by the end of this year. Also, by only reporting on gains in fiber and FWA customers, they are painting a more positive picture of growth, without acknowledging that a lot of the customers for those two technologies are changing technology due to discontinued copper. One annoyance of not reporting copper customers is that we no longer know how many total broadband customers the company is serving.

SpaceX Continues to Lobby Against the High-Cost Fund. On several occasions over the last few months, SpaceX has told the FCC that the $4.5 billion High-Cost program that is part of the Universal Service Fund has outlived its purpose and should be phased out. In two different filings at the FCC in August, the satellite company says that the High-Cost program should be discontinued and that the federal government is now subsidizing rural companies to compete with Starlink. That’s an interesting argument that says the federal government shouldn’t be using money to overbuild satellite. Rural telcos and cooperatives counter this argument, pointing out that Starlink has major capacity issues and can’t serve everybody in rural areas, while small ISPs are still willing to serve everybody. The FCC is reconsidering every aspect of the Universal Service Fund, and we should start hearing their intentions over the next quarter.

Texas Pause of BEAD Funding is Still in Effect. Under pressure from the legislature, the Texas Broadband Development Office put the BEAD grant process on hold. The newly seated Texas Comptroller Dan Huffines, who oversees the broadband office, ordered a comprehensive review and audit of the BEAD process. This effort was the result of several elected officials claiming that too many locations were awarded to satellite broadband, and that satellite companies are also getting significant payment upfront when they sign a BEAD contract. It’s possible that the freeze won’t be lifted until the legislature returns in January.

Broadband Adoption to Drop? Several national witnesses told a Pennsylvania House committee in an August hearing that the State’s next big challenge with broadband will be keeping households connected. They warned that the changes in 2027 coming from the One Big Beautiful Bill, like another big increase in healthcare costs, are going to make it a lot harder for homes to afford a broadband connection. One witness estimated that 233,000 Pennsylvanians in the lowest income quintile are in danger of not being able to afford broadband.

Stock Buybacks Instead of Expansion. Elliott Investment Management has been pressuring Deutsche Telekom to pursue stock buybacks rather than pursue the major merger with T-Mobile. Elliott is a large hedge fund that is known for activism and putting pressure on companies it has an ownership share in to stress short-term returns over long-term strategies. The company is known for pushing through cost-cutting and similar actions at companies like Crown Castle, Southwest Airlines, and Salesforce. Customers of the big companies would rather see companies roll profits back into infrastructure, technology, and customer service rather than using profits to buy back stock to benefit stockholders.

Satellite News August 2026

Starlink’s Capacity Growing. An analysis by MoffettNathanson estimated a huge increase in potential capacity based upon a migration to the new V3 rockets. The analysis said that the current capacity with the V2 satellites is between 8 and 16 customers per square mile, which limits the overall penetration to 2% – 3% of U.S. households, even when the current 15,000-satellite constellation is completed. The new V3 satellites should bring a lot of additional capacity, including the opportunity to sell broadband in denser population areas. MoffettNathanson estimates the overall capacity, assuming that two-thirds of satellites are upgraded to V3 by 2030, is between 24% – 35% of households, or the capacity to serve 35 million to 50 million potential subscribers. This increase is fully dependent on the company being able to regularly launch the new Starship rocket, which will only be able to carry 60 V3 satellites per launch. SpaceX successfully launched a Starship rocket on July 27 that carried twenty V3 rockets into space. This was a test, and the satellites were allowed to quickly deorbit.

Satellites Monitoring Wildfires. Satellites have been used to view the progress of wildfires, but to a limited degree of effectiveness. Existing satellites don’t notice fires until they have spread to several acres, and they typically only transmit a picture of a wildfire every twelve hours. The nonprofit Earth Fire Alliance has launched three satellites that are the beginning of a fifty-satellite constellation to detect and track wildfires in real time. The full constellation won’t be in place until 2030. The satellites are sensitive and will be able to see a fire as small as a 5-meter square. When fully deployed, the satellites will be able to give an update on a fire every twenty minutes.

A Big Drop in Satellite BEAD Locations. There is a significant drop in the number of eligible locations for the BEAD grant awards made to Starlink and Amazon Leo. The NTIA analysis compared the location of BEAD awards to the new FCC mapping fabric. The new mapping identified 50,578 BEAD locations that are no longer considered as mapping points, meaning they are probably buildings like barns and sheds. The analysis showed 262,053 locations that are now considered to be served by broadband of at least 100/20 Mbps. Finally, there are 61,512 locations that would be excluded if NTIA accepts broadband provided by unlicensed spectrum to qualify as served. Altogether, these reductions could reduce the amount awarded to Starlink and Amazon LEO by at least $354 million. Note that these same kinds of reductions are also being made to fiber and other technology awards as NTIA continues to nibble away at the total BEAD dollars being awarded.

 Texas Broadband Office Facing a BEAD Audit. Lt. Gov. Dan Patrick and House Speaker Dustin Burrows called for an audit of the Texas Broadband Development Office (BDO). The audit is coming from industry allegations that BDO too heavily favored satellite broadband over fiber and other technologies. The BDO recently put the entire BEAD grant program in the state on hold, seemingly due to this issue. Even if the accusations are proven to be true, it seems highly unlikely that NTIA would allow for higher dollar awards if the State wanted to re-award canceled satellite locations to a more expensive technology.

SpaceX Rocket Hit the Moon. The discarded upper portion of a rocket launched in January 2025 by SpaceX crashed into the moon on August 5 at a speed of 5,400 per hour, creating a 60-foot-wide crater. The original launch was to deliver a moon lander.

Data Centers in Space. Early this year, SpaceX announced plans to put one million satellites in space to create a huge AI data center. Since then, additional applications for AI satellites have been filed with the FCC, including 88,000 satellites by StarCloud, 51,600 satellites by Blue Origin, and 20,000 by Cowboy Space. These are just the U.S. companies, and there are discussions around the world of creating orbiting data centers.

SpaceConnect Association Launched. In an inevitable move, the companies in the space business created a trade association that will propose and lobby worldwide for regulations that will “enable innovation, investment, and expanded connectivity through next-generation satellite networks”. The inaugural Board consists of Chair, Ashleigh de la Torre, Vice President of Public Policy at Amazon; Secretary, Michael Schwartz, Senior Vice President, Corporate and Business at Telesat; and Treasurer, Barbee Ponder IV, General Counsel and Vice President of Regulatory Affairs at Globalstar

The Future of State Broadband Offices

Kathryn de Wit and Jake Varn of Pew recently wrote an article that cautioned that States Must Consider Future of Broadband Offices. They note that some states have a sunset date embedded in the enabling legislation that will mean the end of State Broadband Offices if state legislatures don’t act.

I’ve also been thinking about this lately. States have been busy in recent years overseeing broadband grants that were funded by the Capital Project Fund. Many legislatures augmented those grants with funding from ARPA for additional grant funding. Both of those programs are finished this year, other than a few waivers to extend funding until July of next year. Before these two programs, the States oversaw the use of CARES Act funding, which was used for a wide variety of purposes. A handful of legislatures also funded broadband grants out of the state coffers.

Most States are busy right now trying to get BEAD grants in place with ISPs, although a few States have only minuscule outlays for BEAD. For unknown reasons, NTIA has still not agreed to the grants for Illinois and California. BEAD grant construction is supposed to conclude in four years, and States are on the hook to verify that construction meets the BEAD specifications.

There were two other sources of federal funding that were supposed to feed through the States. The biggest source is the BEAD non-deployment funds, which is whatever is left over from the $42.5 billion grant program after funding infrastructure. This was originally a relatively small amount, and in 2024, thirteen States told NTIA that they would probably have excess funding left over after infrastructure grants. However, when NTIA implemented the Benefit of the Bargain rules, it slashed infrastructure grants, and non-deployment has ballooned to over $21 billion. There is still no assurance that this money will ever be given to States to spend. NTIA has repeatedly pushed off the date when it will disclose the use of these funds. The U.S. Treasury continues to refer to these funds as net savings, implying they won’t be spent.

The other funding that is still up in the air is the $2.75 billion in grants that were funded by the Digital Equity Act. A lot of this funding was to be administered by the States to provide computers and training to take advantage of the new infrastructure being built through federal grants. The administration abruptly canceled this grant program, supposedly because it included the word equity in the title. The National Digital Inclusion Alliance (NDIA) sued the administration over the end of the grant. It’s possible that this funding still has legs. The DOJ told a court last week that the government might remove its objections to the grant program if all references to race were removed. But there is probably still a long road to seeing this funding since the administration’s proposed budget for next year eliminates these funds.

I have to wonder what happens to State Broadband Offices if non-deployment or Digital Equity Grants are never funded. They will be left overseeing the invoices for BEAD. States are on the hook to measure speeds on grant programs for another decade – but will that be enough to convince legislatures to keep funding broadband offices?

Some States will fund new grant programs to bring infrastructure to the places missed by BEAD. Wisconsin has already announced a new state grant program, and there will probably be another half dozen states that issue grants to continue to close the broadband gap. But a lot of States now believe they are mostly covered with decent broadband, and there won’t be any incentive for those States to continue to pay for a broadband office.

Pew suggests activities that broadband offices should pursue after BEAD. This includes setting broadband goals, collecting and mapping broadband data, and providing technical assistance to communities and stakeholders. I would extend that list to suggest that States focus on digital inclusion and affordability efforts to make sure that everybody can actually use the broadband networks that have been built.

But I have to wonder how much traction these goals will generate in States that are looking at meager and tight overall budgets in the foreseeable future. Is broadband going to remain enough of a priority at State legislatures to attract funding when so many other important functions are losing federal funding? Will States that think broadband has been solved care about maintaining a broadband grant office? We have to remember that, before the CARES Act many States did not have a formal broadband office. I suspect that when the sunset date hits for broadband offices, that some States will let the function lapse in favor of other priorities. I can’t see the States caring very much about NTIA requirements to measure broadband speeds for BEAD networks once those networks are funded and operational.

What Happened to Accelerated BEAD?

The BEAD road has been a long one. BEAD was first created by Congress in November 2021, meaning we’re now more than four years into the program. There are now a handful of BEAD projects under construction in a few states, but in most places, the BEAD grant program is still mired in the paperwork process that precedes releasing funds to ISPs.

To contrast BEAD with other large broadband programs, two large federal grant programs were approved by Congress in March 2021 as part of the American Rescue Plan Act of 2021 (ARPA). I estimate that the Coronavirus State and Local Recovery Fund (SLFRF) funded at least $9 billion in fiber projects. The Capital Project Funds (CPF) funded at least $11.5 billion in fiber projects. These programs were initiated only nine months before BEAD, yet the construction for awards for both programs must be completed by the end of this year.

That is blazingly faster than the BEAD timeline. BEAD proponents will rattle off a list of reasons why BEAD has taken so long, and I’ve even talked to some people who think the long BEAD timeline was intentional. A few States like Louisiana now have BEAD construction underway. But on the whole, there are still a lot of states that haven’t yet pulled the trigger.

In case you haven’t seen it, NTIA has a website that tracks the last major hurdles for each state to final federal approval. This website shows

  • Three states – California, Illinois, and Oklahoma – are still waiting for approval from NTIA for their Final Proposal that describes the BEAD grants they want to award.
  • 15 states and territories have NTIA final approval but are still waiting for NIST (National Institute of Standards and Technology) to approve the paperwork. NIST’s role is to make sure the grant paperwork is complete and meets the requirements of the original BEAD legislation.
  • 15 more states and territories have made it through NTIA and NIST approval, but still have not signed a contract with NTIA on the use of the BEAD funding. There is no way to know how much of this delay might be the typical delay from state and NTIA lawyers haggling over contracts versus states that are having disputes over contract requirements.
  • 23 states and territories have made it through all of these steps and are free to begin negotiating contracts with grant winners. I’ve heard from ISPs in some states that getting through the contract issue requires a lot of final paperwork and effort, but this seems to differ by state.

You might recall that before the election in 2024, Louisiana had made it through the BEAD process and was ready to start making grant awards. There were three or four other states that were very close behind.

When the new administration came in, one of the first things we heard from Howard Lutnick, the Secretary of Commerce, was that the BEAD process would be accelerated to put the grant funds to use. He was highly critical of the prior administration that hadn’t yet connected any households to broadband by the end of 2024. Everybody in the industry was hoping that NTIA was going to speed up the process.

However, the BEAD process went into a deep freeze while the NTIA decided what it wanted to do with the program. It took until June 6 last year before NTIA announced new Benefit of the Bargain rules. By then, almost all of the states had conducted BEAD grant application rounds and had identified potential winners. The Benefit of the Bargain required states to start over. It set a cap on the BEAD grant awards in every state, and many original potential winners dropped out of the grant process. We’re now back close to the same place the program would have been a year ago, with a number of states having BEAD winners. It’s pretty easy to argue that NTIA added nearly an additional year to the BEAD process. NTIA will say it was worth it since a lot less funding is being awarded. I’d bet the folks who will wait an extra year to see construction, or those who are now getting satellite instead of fiber, aren’t big fans of the extra delays.

State Broadband Regulation

The industry spends a lot of time focusing on potential federal broadband regulation, and bills introduced in Congress get a lot of press. It’s easy to forget that a lot of broadband legislation happens at the State level,

NCSL (the National Conference of State Legislators) tracks state legislation across the country and wrote an article summarizing state legislation related to broadband issues. 2025 was a busy year for broadband legislation, and there were over 600 broadband bills introduced in state legislatures, with 139 bills enacted into law. The article is a great resource for anybody who wants to dig deeper since it links to the enacted bills that are mentioned in the story.

Poles and Permitting

Seventy of the enacted laws established new state rules related to pole attachments and permitting. We’re likely to see a flurry of more laws in this area in 2026 since BEAD grant rules require states to approve or deny applications for permits on State highways and land be approved or denied within 90 days. The bills highlighted in the article include:

  • Idaho HB 180 requires public utilities to allow space on poles for broadband, cable and telecommunications equipment and allows the Idaho Public Utilities Commission to mediate if parties cannot agree on rates, conditions, and timing. The legislature thought this law was needed since municipal pole owners are excluded from federal pole attachment rules.
  • Indiana SB 502 adopts the timelines required by BEAD and also establishes a timeline for quick mediation of disputes.
  • Maine HB 559 gives more authority to towns over approving the building of new poles. The law allows smaller towns than previously to deny applications to build new poles as long as the reason for the rejection is related to public safety or welfare.
  • Colorado HB 1056 and West Virginia HB 3144 allows for automatic approval of specific kinds of applications for rights-of-way and permits for wireless infrastructure.

Critical Infrastructure Protections

There has been a major uptick in damage and vandalism to communications infrastructure in recent years that has resulted in serious network outages. State legislatures reacted to passing legislation that establishes or creates penalties for those who damage networks. I discussed this topic in several blogs this year, one that asks when network damage might be considered to be terrorism, and one that looks at the trend of declaring broadband networks to be critical infrastructure.

The article provides links to the text of approved legislation that have increased penalties for those who damage communication infrastructure, enacted by Alabama SB 54, Iowa HB 879, Kansas HB 2061, Kentucky SB 64, Louisiana SB 22, Montana HB 257, and West Virginia HB 3504. A few states went even further, and Oklahoma HB 2104 and Texas SB 1646 categorized damage to communications infrastructure as felonies.

Looking Ahead to 2026

It’s likely that there will also be a lot of new legislation in 2026. As mentioned above, States likely will tighten approval times for rights-of-way and permitting on state lands and highways to comply with BEAD. An area that is seeing a lot of discussion is data centers, and it seems likely that states will pass legislation that establishes rules related to the placement, energy use, and environmental issues related to new data centers. While not directly related to broadband, it seems likely that there will be a lot of new State regulations related to AI.

Is There a Fiber Crunch?

There have been a number of articles in the industry press predicting a major shortage of fiber in 2026. Fiber manufacturers have already been working at full capacity due to the large amounts of fiber networks being built. Telcos like AT&T, Frontier, Brightspeed, Windstream, Consolidated, and many others have been busy building fiber. The big cable companies like Comcast, Charter, and Cox have been building fiber. There are numerous fiber overbuilders like Lumos and Metronet, which were purchased by T-Mobile and numerous other companies funded by venture capital. By my math, there was also over $13 billion spent in 2025 to build fiber, funded by grants and subsidies like ARPA, Capital Project Funds, RDOF, ReConnect, EA-CAM, etc.

2026 should also be a busy year for fiber construction. The telcos, cable companies, and fiber overbuilders are all planning a lot of fiber construction. There is still a little over $10 billion in planned fiber construction funded by the same existing subsidy and grant programs, plus there will start to be orders for fiber from BEAD grants as the year goes by.

Fierce Network talked to the major fiber manufacturers like CommScope, Clearfield, Corning, and STL, and was told that the companies are seeing unprecedented demand to provide fiber for AI data centers. This demand comes from both inside new data centers and also for the networks that tie data centers together.

I think people will be surprised to hear the amount of fiber wiring needed inside an AI data center. The Fierce Network article quoted Rahul Puri, the CEO of the Optical Networking Business STL, as saying that an AI data center needs 36 times as much fiber wiring as a normal data center. Anybody who’s ever been in a traditional data center will be floored by that assertion since there are typically large amounts of fiber wiring either under the floors or overhead of racks in a traditional data center. A Fierce Network article in December said that the giant 1 million processor data center being built in Louisiana by Meta will require 8 million miles of individual strands of fiber. Most of these strands will be part of fiber bundles of hundreds to a thousand fibers. The data needed to connect processors is gigantic.

Corning and other vendors are working on new technologies that will provide the needed connectivity within a data center, such as co-packaged optics that place optics and electronics closer together. Other vendors like STL are investigating hollow-core fiber to increase density and decrease latency.

There is also a huge demand for middle-mile fiber to connect AI data centers. Research firm RVA LLC predicts that 92,000 new route miles of fiber will be needed to connect data centers over the next five years. These are also big fiber bundles. My firm worked on a data center proposal last year that didn’t come to fruition, where the data center builder wanted a 512-fiber backhaul network.

One of the biggest challenges for the vendors is that there are different kinds of fiber for different uses, like inside a data center, in middle-mile networks, in last-mile networks, for drops, and inside buildings. The challenge for vendors will be to match manufacturing output with demand.

Vendors and industry experts are predicting that some kinds of fiber could experience ordering backlogs as long as a year. Vendors are likely going to satisfy their largest customers first, so smaller projects might find themselves in a bind.

It will be ironic after all of the hurry up and wait for BEAD if grant projects are badly delayed due to a fiber supply chain problem. But all of the industry predictions are based upon demand staying firm. There  are a number of credible predictions that there will be an AI market contraction in the coming year since data center supply seems to have outstripped the ability to generate the revenues needed to make the industry viable.

The Fiber Broadband Association says it is not expecting big backlogs in the fiber needed to build last-mile networks. I guess none of us will know for sure until we start seeing smaller ISPs place orders for fiber later this year.

BEAD and Affordability

One of the big glaring weaknesses of BEAD was that the enabling legislation and the NTIA rules made it impossible to consider affordability as a criterion of selecting BEAD grant winners. A few states tried to stress affordability during the BEAD process, but were largely shut down by the NTIA. After the Benefit of the Bargain rules, consideration of affordability went out the door, along with all factors other than the construction cost per passing.

In a speech made to the Hudson Institute, NTIA Assistant Secretary Aerielle Roth was quoted as saying, “This administration does not want BEAD to become just another well-intentioned broadband program that falls short. Its mission is nothing less than to close the “digital divide” once and for all.”

Unfortunately, the BEAD infrastructure grants alone were never going to close the digital divide. When we talk about solving the rural digital divide, we’re really talking about several different issues. A primary element of solving the digital divide is broadband availability, which is what infrastructure grants tackle. BEAD focused on making sure that BEAD-eligible locations got at least one broadband option with a speed of at least 100/20 Mbps.

Solving the digital divide means two more things. First, it means making sure that people have computers and devices and know how to use them effectively. Finally, solving the digital divide means having broadband that people can afford.

Congress intended to tackle all these elements of the digital divide solution. The Digital Equity Act was intended to provide the funding needed to make sure that folks had devices and knew how to use them. That effort was going to be bolstered by BEAD non-deployment funds that didn’t get used for infrastructure. Unfortunately, NTIA and the Administration have refused to distribute the funding from the Digital Equity Act, and it appears likely that most or all of the non-deployment funds won’t be made available to States.

At the time that the BEAD legislation was approved, the ACP program was underway to provide low-income homes with a monthly $30 discount off broadband. The BEAD legislation mandated that BEAD winners enroll and use the ACP program. Unfortunately, Congress let that program lapse.

There were State Broadband Offices that tried to tackle the affordability issue through the scoring of grants. These States tried to assign a lot of grant points to ISPs that offered lower rates. For example, the proposed grant scoring in some states would have given an edge to a cooperative with $65 rates over satellite broadband priced at $120 or another ISP with $100 rates.

The BEAD legislation said that States couldn’t use BEAD rules to ‘set rates’, and there were a few States that tried to do that in their grant scoring and tried to force rates as low as $30 or $40. NTIA nixed State attempts to force lower rates even before this year’s Benefit of the Bargain rules.

It’s a shame that overall rates couldn’t be considered in BEAD, because household incomes are lower in rural areas than in non-urban areas, meaning that affordability is more of an issue in rural areas. This is not true for all BEAD areas, but many of the areas covered by BEAD are both rural and poor. According to statistics published by the Federal Housing Finance Agency at the end of 2024, 18% of rural homes have household incomes under $25,000 per year, compared to 15% in non-rural areas. There is also a significantly higher percentage of rural homes with household incomes between $25,000 and $50,000 (21% vs. 17%).

To me, the bottom line is that BEAD is not going to solve the rural digital divide since it focuses only on infrastructure. NTIA has to shoulder the blame for nixing the grant funding that would have provided devices and digital skills training. Congress has to take the blame for ignoring profitability when it required  ACP participation as a component of BEAD, and then let ACP lapse without a replacement.

Misaligned Priorities

We have several sets of broadband priorities at odds with each other in the country. The federal government is on a big push to move all transactions with the government to digital. The example that got a lot of press was when FEMA said it would only communicate with disaster victims through emails and its online portal. But government agencies across the board are pushing folks online to communicate.

The government is also clearly supporting an AI revolution where AI is supposed to revolutionize the way we work and live. According to federal government rhetoric, we are a little bit ahead of the Chinese in terms of AI development, and politicians seem to support the idea of doing whatever is needed to make sure that the U.S. wins the AI race.

At the same time that we are prioritizing AI and moving everything online, we seem to be deprioritizing broadband. NTIA cut the BEAD program funding in half to save money, at the expense of building new networks that would provide solid infrastructure for the next fifty years. The Administration outright killed the Digital Equity Act, which had the goal of getting computers into people’s hands and training them how to use them.

These goals are clearly at odds with each other. Consider the Digital Equity funding. There is a huge lost opportunity cost for not giving people the tools to enter the digital world that the government wants. What is the cost to society for people who aren’t given the tools to enter the digital world? Digital equity folks can rattle off tons of stories of folks who were given help with broadband who then went on to work in a tech field, start a business, become teachers, or otherwise thrive and contribute to society.

The disparity between these policies makes no sense to me. It looks to me like the Digital Equity Act was killed for the simple reason that it had the name ‘equity’ in its title. But digital equity never had any of the connotations that politicians classify as DEI. Digital Equity has always been an effort to help people learn more about and master computer technology and broadband. It makes no sense not to have digital equity as a goal if we want everybody to be able to use AI or communicate with the government online.

The BEAD grants were trimmed back for one reason only – to save money. The new Administration sent folks into every nook and cranny of the government to find ways to save money. On the surface, this isn’t a bad thing, and I have to think that many of the cuts to government expenses are good in the long run. But BEAD was never about spending money. BEAD is an infrastructure bill. There are reams of economic studies that show that spending money on infrastructure always returns more to the economy than the cost.

Just in my part of North Carolina, there are a bunch of counties where all of the BEAD awards went to satellite broadband. Set aside that Western North Carolina is mountainous and heavily wooded, and there will be homes that won’t be able to get adequate broadband from the satellites. Set aside that many of these counties have low overall incomes and many folks won’t be able to afford the satellite broadband.

The bigger issue is that building fiber is about a lot more than just bringing broadband to homes. When counties get a fiber network, they can start to get creative to find ways to leverage a new network to improve the local economy. Satellite broadband is finally starting to deliver the broadband that the average home needs to join the modern world. But satellite broadband isn’t going to support schools. It’s not going to enable a county to attract a new factory. Satellite is not going to enable a county to seek ways to improve cellular coverage. Fiber is the infrastructure needed to help the overall community, while satellite broadband just helps customers who can afford it.

I know this is probably coming across as another rant, but I know I’m right. BEAD and the Digital Equity Act were tools that could have made a big difference in rural communities. I’m pretty sure that by killing broadband programs that AI will not be coming to the rural counties in Western North Carolina. Folks here are going to fall through the cracks because they will be unable to communicate with FEMA and other government agencies. It feels like the government is making a conscious decision to exclude Western North Carolina. I don’t think this is deliberate, but unfortunately, by pursuing misaligned priorities, that’s exactly what is happening. The current government is making far too many decisions in a vacuum without considering the bigger picture.

Justifying Cuts to BEAD

NTIA Assistant Secretary Arielle Roth recently made a speech at the Hudson Institute that outlined her policy positions related to reshaping the BEAD program. The changes to BEAD were initiated by Commerce Secretary Lutnick and are now being finalized and implemented by Roth. The bottom-line impact of the changes will be to cut the amount of spending from the BEAD grant program roughly in half, with the savings returned to the Treasury.

Roth says that the changes are not just about saving money. Her position is that the cuts being made are to make sure that the government doesn’t distort or sabotage the pace of technological innovation.  To quote Roth, When the government overspends or over-subsidizes a single technology, it doesn’t just waste funds; it warps the progress of innovation. Excessive subsidies crowd out private investment, slow down research and development, and delay technological progress. That’s counterproductive to BEAD’s mission, which is to close broadband gaps, not freeze technology in place. In a field as dynamic as broadband, minimizing distortion is critical, because in every case, the most significant breakthroughs in connecting rural Americans have come not from subsidies, but from technological innovation itself.

That’s an amazing policy position to take related to rural broadband. I’d like to put her position into a bigger perspective. Her argument is a good one related to the whole broadband industry. I don’t know anybody who would argue that the federal government should help to pick technology winners for the entire industry. The market today is taking care of that pretty well. Over the past several years, over 14.5 million customers have chosen to buy broadband from the FWA cellular companies, much to the dismay of the cable companies. A recent article said that major fiber overbuilders in urban and suburban markets are seeing penetration rates between 35% and 45%. Starlink has grown to have four million U.S. broadband customers. It seems like the overall market is working pretty well, being fueled by private capital and head-to-head competition.

But even there, the federal government can’t help itself from fiddling at least a little bit with the market. Congress recently directed the FCC to rework mid-band spectrum allocations to bring 600 megahertz of spectrum to auction. That action will benefit FWA cellular competition even more than cellular service. That’s what incessant lobbying and contributions from the cellular industry buy. But mostly, the government hasn’t been intervening in the broader broadband market.

Roth’s policy position falls flat when applied to the tiny world of BEAD. The BEAD grant program aims to bring broadband to the last 6 to 7 million locations that got left behind by the market. For the most part, the BEAD locations are the most remote or least dense areas where nobody has been willing to make private investments. Congress recognized this when they developed BEAD, and it’s still the market reality. Without a one-time grant subsidy, these locations will likely never see better broadband.

How BEAD grants are awarded is extremely important to the households that will get the broadband, along with the construction companies and vendors that will supply the materials and labor to implement the grants. A lot of rural people put effort into the BEAD process in the hopes of getting a generational broadband upgrade.

But the technology chosen for BEAD has almost zero impact on the bigger U.S. broadband market. It really doesn’t matter to the larger market if the BEAD money all goes for fiber or all goes for satellite. It’s absolutely impossible to make an argument with a straight face that the technologies chosen for BEAD will somehow “warp the progress of innovation” if it’s not done just right.

I know Assistant Secretary Roth is looking for a good argument for awarding all of the locations in a rural county to satellite instead of fiber – but this argument is not it. The truth is that the NTIA changes to BEAD are only about saving money. NTIA could have completed the BEAD grant award on the same timeline by deciding to spend the full $42.5 billion, but they chose not to. They whacked the spending in half and are now searching for a clever way to justify their choices. I can’t think of a more ludicrous argument than one that says that spending more BEAD money on fiber would somehow sabotage the overall pace of broadband technology innovation for the country.

Missed by BEAD

An article from the Advanced Communications Law and Policy Institute at the New York Law School claims that over 1 million locations were missed by the BEAD grants. They identified these as locations that are still shown as unserved and underserved on the FCC broadband maps, but which did not make it into the BEAD program.

ACLP also identified two other sources of locations that will likely not get broadband. They predict some BEAD defaults since a number of small and untested ISPs won sizable BEAD grants. They also believe there will continue to be defaults in other grant programs.

ACLP recommends that up to half of the $20 billion+ that will not be spent on BEAD grant be deposited into a BEAD Reserve Fund to be used to cover the shortfalls.

It’s a sensible idea, but unlikely to gain any momentum. It seems clear that NTIA wants to take credit for solving the rural broadband gap while also returning $20 billion to the U.S. Treasury. I can’t think of any mechanism that would allow NTIA to keep unspent monies alive once BEAD grants are awarded and NTIA makes a final announcement on non-deployment funds. The general consensus I’m hearing is that NTIA will award little or nothing to non-deployment funds.

I think ACLP is missing the bigger picture, and I think there are many millions more locations that should have rightfully been included in BEAD.

ACLP’s math starts with the assumption that the speeds reported to the FCC in the broadband maps are right. Anybody who has worked at a local level knows this is often not the case. There are a lot of ISPs that claim a speed of exactly 100/20 Mbps in the FCC maps, and I believe that millions of these locations have been falsely excluded from BEAD.

Each State had a BEAD map challenge that was supposed to result in an accurate map, but that process was largely a total bust. The map challenge rules made it much easier to exclude locations from the preliminary BEAD maps than add locations. The process of proving an ISP was overstating speed capabilities in the FCC maps was nearly impossible to comply with.

Additionally, NTIA declared that licensed fixed wireless was to be treated as served as long as speeds were reported at 100/20 Mbps. In many counties I worked with for the map challenges, it became obvious that reporting by some WISPs was a joke. I remember one WISP that drew an eleven-mile radius circle around every tower and claimed the ability to serve every place in that circle. Numerous WISPs used seven- and nine-mile circles and also claimed full coverage. The irony of the NTIA ruling was that the only requirement to block off big areas from BEAD was adding CBRS spectrum to the spectrum mix. Many WISPs tell me that CBRS is an unremarkable spectrum due to the small channel sizes.

The other big category of locations that could have been covered by BEAD was low-income MDUs. The BEAD legislation suggested that States attack this issue using non-deployment funds. The number of such locations is hard to identify because many MDUs show as served in the FCC map since there is fiber nearby. But an MDU is not served until somebody is willing to invest in the inside wiring needed to bring better broadband to residents.

My guess is that the number of locations missed by BEAD is likely 6 to 7 million, much higher than the number suggested by ACLP. I have no analytical basis for that guess other than I seem to find examples of places missed by BEAD in every community I dig deeply into.

At some point, this will all come clear as folks without good broadband continue to complain to their elected officials. RDOF was supposed to fix the digital divide. BEAD was supposed to solve it. Maybe the next time will be the charm, although I’m not taking any bets on it.