Tag Archives: Digital Equity Act

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.

Broadband Turkeys of 2025

This is my first-ever list of annual broadband turkey awards, which I’m awarding for the worst industry events of 2025. I’ve never done this before, because there have never been enough negative events in a single year to make a list like this. I hope I won’t be able to make a list again at the end of 2026.

5 – Major Cloud Outages

There has been an increasing occurrence of major cloud outages this past year, including outages from Cloudflare, Google Cloud, and Amazon Web Services (AWS). It seems like the outages are growing in severity and breadth due to the growing concentration of the operation of the web into a handful of companies. At the same time, each of these providers also seems to be pursuing the consolidation of their networks into a small number of core data hubs. This combination now means that something as simple as a DNS error can get magnified into a major outage affecting multiple industries and causing billions in damages in a short time. This goes on the turkey award list since every one of us is at the mercy of a prolonged broadband outage caused at some distant data center.

4 – Congress Determining Spectrum Policy

In the Big Beautiful Bill, Congress seemingly usurped spectrum policy by mandating that 800 megahertz of mid-range spectrum be set aside for new FCC auctions. This undoes the historical deliberative process that balanced the needs of the many users of spectrum. This was seemingly done as a way to justify cutting taxes elsewhere, but the real reason behind this new mandate was the cell industry lobbyists doing an end run around everybody else in a land grab for some of the most valuable spectrum. This goes on the turkey award list since the FCC will likely have to raid the spectrum needed for other vital purposes like rural broadband and WiFi.

3 – BEAD Awards to Amazon LEO

In a process that is so absurd that it’s hard to discuss without laughing, we’ve allocated federal grant funding to serve at least 700,000 rural homes to an ISP that currently has no broadband infrastructure, and that has never served a single broadband customer. This might eventually turn out not to be a disaster, but this has to be one of the oddest things that has ever happened in the industry. This goes on the turkey awards list, well . . . because.

2 Killing the Digital Equity Act Funding

The Administration and the NTIA killed funding for grants from the Digital Equity Act, seemingly because the title of the law included the word “equity”. The grants were to tackle digital inclusion and specifically were aimed at making sure that people have access to computers and other devices and that they learn how to use them to increase digital literacy in the country. This decision is hard to understand at a time when the same federal government is forcing the public to interface electronically with government agencies. This same government is also saying that the future of the country is AI. This goes on the turkey award list because we seemed to have made a major policy decision based on misunderstanding the meaning of a word in the title of the law.

 1 Benefit of the Bargain

This was the process of the BEAD grant process that cut funding for broadband grants in half. It’s the most poorly-named process ever in the broadband industry since it isn’t a benefit to the many people who will no longer get a fast broadband solution, and it’s not a bargain for anybody that I can identify. The award goes equally to whoever came up with the plan to cut the BEAD infrastructure grants in half, and to the person who came up with this dreadful name.

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.

FCC Raises Inmate Calling Rates

In what would normally be an extraordinary action, but which is becoming commonplace, the FCC thumbed its nose at Congress and raised rates for telephone and video calls placed from jails and prisons.

The FCC under Jessica Rosenworcel issued new rules in 2024 that lowered prison calling rates that came as a result of the Martha Wright-Reed Fair and Just Communication Act, enacted by Congress. Earlier this year, the FCC put the rate reductions on hold and recently ruled to make the reversal of the law permanent.

The FCC was reacting to heavy lobbying from the handful of companies that specialize in providing prison calling, along with lobbying from jail and prison officials who benefit by sharing in the revenues from inmate calls. The new Congressional Act not only cut rates but also eliminated the payment of commissions to jails.

The FCC didn’t only raise calling rates. The new order adds a 2-cent facility fee to each call. The FCC rules now allow the prison carriers to add a fee to cover “safety and security’ costs. The FCC also created a new category of even higher rates for extremely small jails that house fewer than 50 inmates. Finally, the FCC now allows prison carriers to add a 6.7% increase to rates for inflation.

The new FCC rules kept a few of the provisions of the original Act. Carriers can’t pay commissions to jails and prisons from Interstate calling. The Act also eliminated a lot of ancillary fees that were charged mostly to families of inmates.

I call the ruling extraordinary because I can’t recall an FCC in the past that so blatantly decided to ignore a law passed by Congress. The only other time I recall the FCC having a major issue with a law was when Chairman Mark Fowler in the 1980s took exception to Congressional rules related to the Fairness Doctrine, although there might have been other instances. The FCC was created as an independent agency by Congress, and it’s assumed that the Agency is required to follow explicit laws enacted by Congress.

This is not the only federal agency ignoring Congress. NTIA, at the behest of the Administration, is refusing to award grants from the Digital Equity Act. The NTIA is also mulling over sending excess BEAD funds, called non-deployment funds, back to the Treasury. These actions are in direct violation of the funding rules created by the IIJA legislation that funded BEAD and Digital Equity.

The obvious party to address a rogue FCC and NTIA is Congress, but for now, they seem to be ceding power to the Executive branch. It’s possible that the Courts could act to make the FCC and the Administration follow the law. There was a recent lawsuit filed by NDIA that challenges the ability of the Administration and the NTIA to kill the Digital Equity Act.

There are also Supreme Court rulings over the last few years that seemingly make it more difficult for federal agencies to act on their own. The Supreme Court ruled in Loper Bright Enterprises v. Raimondo  to effectively end the Chevron deference and said that federal agencies are on shaky ground when they make decisions that are not explicitly directed by Congress. In the 2025 ruling, McLaughlin Chiropractic Associates, Inc. v. McKesson Corp., the Supreme Court ruled that Courts can more easily disagree with rulings made by federal agencies. It would seem those two court decisions provide a lot of ammunition for attacking the FCC decision on prison calling rates.

NDIA Sues Over Digital Equity Act

The National Digital Inclusion Alliance (NDIA) is suing the Trump administration for cancelling the funding for the Digital Equity Act. The Digital Equity Act was created by the same IIJA legislation that created the BEAD grants. The Digital Equity Act included programs to help States expand digital literacy and address barriers to accessing the internet.

The lawsuit alleges that President Trump violated the separation of powers by killing a program that had explicitly been approved and funded by Congress. The lawsuit claims that shutting down the federal program “far exceeds the constitutional authority of the Executive Branch.” NDIA is asking the court for a declaratory judgment that would reinstitute the program. NDIA was one of the many organizations that had been awarded funding from the first round of grants from the program in late 2024.

There were huge delays in deploying the funding from the Digital Equity Act, which must be laid at the feet of NTIA. The State Digital Equity Capacity Grant Program was established to give money to States to distribute through grants. The stated goal of this grant program was to promote the achievement of digital equity, support digital inclusion activities, and build capacity for efforts by States relating to the adoption of broadband. The Act allocated $1.44 billion to the States for this program, with awards to be made each year from 2022 through 2026. The NTIA was extremely slow in getting this program running and in 2024 announced $840 million in funding to States to cover grants that were intended to cover the funding from 2022 through 2024.

The other major grant program was the Digital Equity Competitive Grant Program, which was administered directly by NTIA. The budget for this grant program from IIJA was $1.25 billion, with $250 million per year to be awarded from 2022 until 2026. Congress liked the program so much that they added an additional $250 million in 2024. NTIA was also slow in launching this program and finally announced the first Notice of Funding Opportunity for grants in 2024.

If NTIA had followed the requirements and timeline specified by Congress, over half of the funding would have been spent by 2024. Instead, because of the inexplicable delays, the White House killed all of the grants announced in 2024, and none of this funding has ever been used.

This is not the first lawsuit that asks that the federal government fulfill funding for programs approved by Congress but killed by the current administration. For example, twenty States filed a lawsuit in June asking the courts to reinstate a wide range of grant programs. The NDIA suit is unique in that it’s the first suit that directly names President Trump as one of the defendants.

There was a lot of speculation when the Digital Equity Act was killed that it was part of an effort by DOGE to kill any federal program related to diversity and equity (DEI). While the title of the program includes the word equity, digital equity has never had any goal of addressing issues related to age, sex, or gender. Digital equity has been used in the context that the U.S. economy will be improved if more people know how to take advantage of computers and broadband. The only slight nod to any social goal in the Act was that 5% of the funding was carved out for Tribes.

The future of the funding is now in the hands of the courts. It is also seeming more likely that there will be similar suits if NTIA decides not to award the non-deployment funds from the BEAD program to States. That funding was intended for States to tackle non-infrastructure programs related to broadband.

Administration Killing the Digital Equity Act

Last week, President Trump called for the end of the $2.75 billion in grants from the Digital Equity Act. The funding was approved as part of the Broadband Equity Access and Deployment (BEAD) program.

The purpose of the program was to help close the broadband adoption gap by helping people learn how to use computers and to navigate the Internet. The grants were to be distributed in two ways. The State Digital Equity Capacity Grant Program reserved $1.44 for States to distribute through grants. The NTIA was slow in getting this program running, and grants were supposed to be launched starting in 2022. The NTIA finally announced $840 million in funding for States in 2024. It doesn’t appear that very much of this funding has been turned into grant awards.

The second part of the program was for the Digital Equity Competitive Grant Program that is administered directly by NTIA. The budget for this grant program was $1.25 billion, with 5% reserved for Native Entities, and 1% set aside for territories. The program was supposed to award $250 million per year in grants from 2022 until 2026. The NTIA was also slow in launching this program, but finally announced $619 in awards in January of this year. It seems certain that those awards will never get inked. There has been money awarded to states, but it’s not clear how much of that might have actually flowed to states since this seems to be a reimbursement grant program.

It’s a shame that almost none of this money has already been used. If NTIA had met the Congressional time line and intentions, 60% of the grants would already have been awarded in 2022, 2023 and 2024. The NTIA has defended the slow speed of the BEAD grant program, but Congress clearly intended for this money to flow quickly. I’m sure we’ll hear about how hard it was to make this work, but I have to think States would have been able to give their portion of this away if they had been given the money years ago. I remember a lot of non-profits that were already making plans to ask for this grant funding in 2021.

It’s hard to deny that there is a computer literacy gap in the country. I can’t find a specific definition of computer literacy, and different sources estimate the number of adults who are not computer literate between 30 million and 50 million. This program was part of the BEAD process that wanted to make sure that rural folks who don’t know how to use computers can take advantage of the expansion of rural broadband that is supposed to be coming from BEAD. The industry is still waiting to find out the status of the $42.5 billion in broadband grants, and seeing this program and ReConnect grants killed in the same week isn’t give anybody a warm and fuzzy feeling.

The President’s announcement said this funding is illegal, which is an odd stance since this was approved by Congress, which seems to be the very definition of legal. This cancellation announcement was not unexpected due move to kill all federal programs and activities that are considered to be DEI. It’s not clear how this is a DEI program other than the name of the grant program contains the word equity.

There is a lot of controversy surrounding the White House’s ability to kill grant programs that were created by Congress, and there are already a slew of lawsuits concerning other federal grants that have been cancelled or put on hold. A quick web search shows lawsuits associated with cancelled grants for the National Endowment for the Humanities, USAID, NIH research grants,  Covid-19 public health grants, and others.

There is always the chance that Congress will insist that these grants proceed, but recent lack of Congressional action probably means there is little chance of that.

The Barrier to Closing the Digital Divide

In a finding that will surprise nobody, Pew Charitable Trust analyzed all of state plans related to the Digital Equity Act (DEA). This is the grant program that is aimed at tackling barriers to broadband adoption, such as getting computers into homes, providing training on how to use technology and the Internet, and increasing broadband adoption rates. Pew found that every state and territory says that the primary barrier to closing the digital divide is affordability.

The DEA is the first federal grant aimed at directly tackling digital equity barriers – previous federal grants have largely concentrated on broadband infrastructure. The DEA will provide grants administered directly by NTIA and is also providing funding for every state to make local grant awards.

States area really struggling with the affordability issue after Congress let the Affordable Connectivity Plan (ACP) lapse – the plan that provided a $30 monthly discount for low-income households. ISPs had responded well to the ACP program. For example, the biggest cable companies offered plans that were zero cost to customers who qualified for ACP, or that let them take the discount for faster-speed plans. States could see that ACP was getting broadband into millions of homes that would not have otherwise afforded it.

A lot of states were expecting to use the DEA grant funding to help people enroll and take advantage of the ACP plan. The vision was that there would be a home broadband plan that every household could afford. The DEA funding was also going to be used to buy computers for homes and to train people on how to best use the Internet.

It’s easy to say in retrospect that every State, County, or non-profit that proposed to use ACP as the primary tool for solving the digital divide was somewhat naïve. It was clear from the start that the ACP program only had enough funding for a few years and that Congress would need to act to keep the plan going. We’ve had a Congress for over a decade that struggles to pass needed legislation. Lawmakers from both parties sponsored bills to continue the ACP, but no bills ever got enough support to even get a Committee vote.

States are now scrambling to find alternative ways to improve broadband in communities with low broadband penetration. The Pew article outlines a few such efforts being tried in communities:

  • Expand free WiFi at community anchor institutions to provide more places for the public to connect to the Internet.
  • Bring free broadband to public housing.
  • Bring free WiFi to parks and other commonly used outdoor locations.
  • Establish tech hubs where people can not only get free WiFi but can use public computers and get trained on how to use computers and broadband.
  • Lending programs to get Internet-connected devices to the public.
  • Establish telemedicine hubs.
  • Fund WiFi infrastructure for newly constructed low-income housing.

These are all great ideas, but they are all not nearly as beneficial as getting broadband directly into every home. I wrote a blog in 2020 about a study done by the Quello Center, which is part of the Department of Media and Information at Michigan State. This study was conducted in a way to isolate the results from factors such as household income and race, and it showed definitive proof of the advantages to students of having a computer and broadband in the home. One of the most stunning findings of the study was that “The gap in digital skills between students with no home access or cell phone only and those with fast or slow home Internet access is equivalent to the gap in digital skills between 8th and 11th grade students.”

States rightfully still have a goal to get broadband into every home, and a handful of States are looking for ways to create a State broadband subsidy similar to the ACP. State funding such plana is expensive, but this might be one of the most beneficial ways that a State government can help low-income households.

It’s frustrating to see government programs that work die from lack of funding. Pew has been one of the strongest proponents of continuing the ACP plan. But it feels like every day that goes by, the more remote the chance of the ACP being resurrected.