Tag Archives: NTIA

New BEAD – Much Ado About Nothing

In my opinion, the BEAD grant program has been a rolling disaster since it was introduced. We saw how a good grant program works when the Capital Project Fund program operated by Treasury quickly dispersed infrastructure money and put it to use. Both programs were authorized around the same time, yet most of the projects funded by CPF are completed, or will be soon since a few projects got an extension until next June.

By contrast, BEAD construction has barely started. There are numerous reasons for BEAD delays, with the most recent delay when NTIA lost a year when it switched to the Benefit of the Bargain rules that drastically halved the funding awarded for infrastructure.

One of the original elements of the BEAD legislation was that money that wasn’t spent on infrastructure would be rolled into what the legislation termed non-deployment funds, which were intended to support broadband functions that supplemented and aided broadband. Many states expected to spend most or all of their BEAD funding on infrastructure, but after the Benefit of the Bargain, there is now over $21 billion of non-deployment. NTIA has been promising for the last year that it would issue guidance to states on when and how that funding can be used. NTIA held listening sessions earlier this year and asked for public input about how to best use the non-deployment funds.

To the surprise of nobody who has been following the BEAD trainwreck, NTIA pulled a fast one with the non-deployment funds. Rather than giving guidance on the $21 billion of non-deployment funds, NTIA has instead determined that some tiny portion of the non-deployment funds can now be used to build more infrastructure. That sounds really good on paper, because who’s not in favor of building more infrastructure?

As you might expect, because this is BEAD, the new grant process is complicated. First, NTIA is developing a list of eligible locations for the new funding. Some of these will come from ISPs that have already refused to accept the first round of BEAD. But it’s hard to think NTIA will find many other meaningful unserved locations. The agency has already claimed victory several times over the last year, saying that BEAD has basically solved the rural broadband gap – so NTIA doesn’t believe there are any pockets of locations that were missed by the original BEAD.

Once the list of locations is published, there is a tight time frame for states to deal with the new BEAD round. States will have 30 days to validate the locations. Next, each state would have to hold another quick map challenge process. As a reminder, the map change process was probably the most dysfunctional part of the original BEAD process – anybody who took part in the map challenges knows it was a disaster, end to end. After the map challenge, states have to submit their final locations to NTIA for approval, after which the states can hold a 90-day supplemental bidding round. I’m sure that NTIA will want to review tentative awards before they are made. States will then have to contract with grant recipients for the new awards. That likely means modifying existing BEAD lines of credit, and who knows what else. It’s hard to see this entire process playing out in less than a year, particularly since there are several steps that include an NTIA review and approval. It’s hard to see any of this new BEAD money being freed to ISPs until sometime into 2028.

All of this is a very convenient delaying tactic for NTIA, since it takes NTIA off the hook for providing guidance for the bulk of the non-deployment funds until the new infrastructure spending has been completely resolved through signing contracts with grant winners.

There is another little twist to consider in that infrastructure awards will be made at the average cost per location from the first round of BEAD. By definition, since all states have made awards for satellite broadband, the new BEAD average award will be lower than what was originally awarded for fiber. Add to this the fact that inflation has made it more expensive to deploy any terrestrial broadband technology, and I doubt that many fiber ISPs will be willing to take new awards a year from now at lower levels than the Benefit of the Bargain grants.

I titled this blog Much Ado About Nothing, because that’s what I expect out of it. I have a hard time seeing any meaningful numbers of locations getting infrastructure in the process, meaning only a small fraction of the non-deployment funds will be used in this process.

I’m hoping this will be my last blog on BEAD, because the process has grown too obtuse to keep writing about. This seems like a scheme for NTIA to delay any discussion about using the $21 billion of non-deployment savings for several more years. I expect most ISPs to ignore this new process, but states are going to be obligated to try to make the awards to somebody. Wouldn’t it be ironic if this ends up making new grants to the satellite providers at a much higher amount per location than what they accepted with the original BEAD? My inner conspiracy voice wonders if that’s the real intention of the new rules.

Where Are the Missing BEAD Locations?

It seems that almost everybody I’ve talked to in the last week is wondering what NTIA is up to when the agency said that non-deployment funds can be used to serve locations missed by the first round of BEAD grants. The common question I’m being asked is where NTIA and State Broadband Offices are going to find more BEAD-eligible locations. It’s a great question.

I can only think of three sources of locations for that were missed by BEAD the first time around. One group of locations are the ones being turned back to State Broadband Offices when BEAD awardees decide not to accept a BEAD grant. The broadband offices have been trying to find other ISPs to take these locations at the original award price. But I already know of several examples where there are no takers – at least at the dollar level of BEAD that was awarded after the Benefit of the Bargain round. Perhaps NTIA will loosen the purse strings a bit to allow for higher awards for some of these locations. I’ve also hear speculation that unclaimed BEAD locations will all go to satellite.

This option is risky for NTIA. The first time an offer is made to a new ISP that is higher than the original award, ISPs everywhere are going to be clamoring for more money. One of the cooperative associations recently made that request. I can foresee lawsuits arising if NTIA allows increases in funding for some locations but not others.

Another potential source of locations comes from each update of the FCC mapping fabric, when new locations are added to the FCC map. Some of these are new construction, and others are corrections of the fabric. I can’t imagine that is a whole lot of places in this category, but there are always going to be some with each new map. What’s not being talked about is that with every release of a new fabric, there are also locations that are being removed from BEAD. NTIA is quietly whittling away at the BEAD grants that have already been awarded, and almost everybody I know with a BEAD grant is seeing some reduction in eligible BEAD locations.

The only other source of new BEAD locations I can think of would be from fixing the many errors introduced in the BEAD map challenge process. The only word I can use to describe the map challenge process is ludicrous. NTIA created a set of rules to challenge the BEAD maps that were impossible to comply with. I know counties, cooperatives, and other ISPs that made numerous claims to the map challenge that were denied. Many of these challenges tried to add legitimate locations that were missing from the fabric.

A much larger number of challenges tried to add locations where an ISP was falsely claiming speed capabilities of 100/20 Mbps or faster that were overstated. A successful speed challenge required a local government to find actual customers of suspect ISPs and get them to take a complicated series of speed tests at defined times and intervals. That whole process was largely unachievable, particularly when the map challenge process was rushed through. In my opinion, the folks who designed the map challenge rules were either completely out of touch with the real world, or else the process was rigged on purpose to hold down the number of BEAD-eligible locations. I’ve seen some credible estimates that there are at least a million locations that were incorrectly thrown off the BEAD map. My own back-of-the-envelope estimate, which is admittedly based only on work in about twenty counties, is that this could be more than two million locations.

I can’t imagine a process where NTIA reopens the map challenge with challenge rules that work. I could see that process dragging out for a year.

There is an easier way to do a map challenge, which would be for NTIA to buy the entire Ookla speed test database of actual speed tests and compare it against ISP speed claims in the fabric. I’ve already written a future blog about how that might work. But I suspect this would lead to lawsuits and chaos as ISPs fight to not get overbuilt with BEAD grant funding.

My gut reaction when I heard this announcement is that won’t amount to a hill of beans. I talked to several people who think this announcement is just another way for the NTIA to put off the announcement of how they will spend the remaining $22 billion in nondeployment funds. NTIA had promised to make that announcement before the end of summer – which is next week. I sure hope this was not that announcement, because I don’t think there is any hidden stash of BEAD-eligible locations that will use more than a tiny amount of the nondeployment funds.

Are Digital Equity Grants Back

There seems to be an increasing chance that the Digital Equity Competitive Grant Program is back in play. In a status report filed by the Department of Commerce in the lawsuit where NDIA filed to reinstate the grant program, the government said it is targeting a December 2026 opening date for applications for the Digital Equity Competitive Grant Program. Like everything associated with BEAD and the Digital Equity Grant programs, nothing is final until this is put in place. We’ve seen NTIA slow-roll the grant process at every turn.

As a reminder, the Digital Equity Competitive Grant Program will be administered and the grants awarded directly by NTIA. The budget for this grant program is $1.25 billion, which was set by legislation to be $250 million per year for the years 2022 through 2026. 5% of the total funding is reserved for Native Entities, and 1% is set aside for territories. The original IIJA legislation had also included $1.44 billion to go to the State Digital Equity Capacity Grant Program. The stated goal of this grant program is to promote the achievement of digital equity, support digital inclusion activities, and build capacity for efforts by States relating to the adoption of broadband.

NTIA had launched the Competitive Grant Program in 2024, with $750 million in grants. There were roughly 700 applicants to the program, and near the end of 2024 NTIA announced a number of award winners. This included a $7.7 million grant to Land of Sky Regional Council for my region of western North Carolina. The administration canceled both programs in May 2024. They said the grants were illegal since they included race as one of the categories to consider when using the grant funding.

The National Digital Inclusion Alliance sued the administration over the cancellation, and there were negotiations between the two sides and the Court that led to this reinstatement of the Competitive Grant Program. The reconstituted grants will remove all reference to race as part of the use of the grants.

Assuming that NTIA meets the December date to open the grant window, it seems almost certain that every application to the grants will have to be refiled. But hopefully, the full $1.25 billion of funding would be open for applicants.

NTIA said it is currently preparing a new Notice of Funding Opportunity (NOFO) for the coming rounds of grants. This is the document that defines the application process for the grants. If the experience of the big changes made to the BEAD grant program is any indication, there could be big changes. NTIA completely rewrote the BEAD grant program with the Benefit of the Bargain rules, and it won’t shock anybody if the rules for the Competitive Grant Program change as well.

There has been no word out of NTIA about releasing the State Digital Equity Capacity Grant funding to States. It would seem logical that as long as the same changes are made to remove reference to race, these grants could be released. But there has been nothing logical about the entire pile of funding that came from the IIJA.

There is still a big question about whether the funding for both programs is included in the 2027 federal budget? As is typical with Congress, budget bills are being punted down the road, and there is no telling when there will be an actual budget for Commerce. The Administration recommended killing this funding for 2027, and we’ll have to wait and see what comes out of the budget process. It’s conceivable that the grants will be killed through the backdoor of the budget process, which would undo anything Commerce is agreeing to now.

At least half of this mess is due to the slowness of NTIA since 2020. The funding for these grants was supposed to start flowing in 2022, and the first grant applications were submitted in September 2024. Half of this money should have already been awarded and in use before the programs were canceled in 2025. I’ve never heard any good story why NTIA took so long to launch a fairly straightforward grant program.

Technology-neutral Policy

Arielle Roth, the Administrator of NTIA, made a speech to the American Enterprise Institute that was titled There Is No Such Thing as “Future-Proof” Technology. Her speech was in reference to the upcoming 6G technology.

She made a really interesting observation about 6G that I hadn’t seen before: That lesson is especially timely as we stand at the frontier of AI-native 6G . . . Perhaps the defining feature of AI-native 6G is not simply that it will make communications networks more intelligent. It is that it will make the future of communications even less predictable. Previous generations of wireless networks were designed primarily to move information faster. The next generation promises networks that increasingly optimize, adapt, and derive insight from the information they carry. As intelligence becomes embedded within the network itself, we should become more humble about our ability to know which technologies, architectures, or applications will ultimately prevail.

Obviously, NTIA is on the 6G bandwagon, much like the first Trump administration was on the 5G bandwagon. To some degree, it’s the government’s role to promote new technologies, and this is done for many other technologies outside of telecom.

I have my doubts that carriers are going to build networks that are less predictable, because that sounds rife with risk. I have serious doubts that the big carriers are going to hand off the responsibility to operate 6G networks completely to AI. The industry learned a lesson last year with the big Verizon outage that lasted far longer than it should have when technicians couldn’t figure out how to fix problems in AI-generated software. Everything I’ve been reading is that the big nationwide networks are bringing more human intervention back into the operation and troubleshooting of networks.

The speech then went on to talk about technology-neutrality. Roth said that the government should never favor any technology, since doing so changes the direction of industry by crowding out innovation.

To some degree, it’s hard to argue with that statement since there are many examples in the past where governments stuck with older technologies and ignored innovations. But it’s hard to say that the current Administration is technology-neutral when it favors traditional power technologies over wind and solar.

Roth said that technology-neutrality matters the most in rural areas, where low-Earth orbit satellite constellations have reduced the cost of reaching people. She said satellite has made obsolete the idea that we need to build wireline networks to reach homes.

I don’t think she is going to find very many local governments and people in rural areas who share her vision that satellite technology is superior to fiber networks. I’ve worked with several hundred counties who understand that a fiber network build today puts their county in a good competitive position for the rest of this century. I don’t know one rural county who regrets the construction of fiber networks.

I find it interesting that she brought up rural broadband in the context of touting 6G, because 6G is not coming to most of rural America, just like 5G didn’t. If anything, the transition from using lower frequencies for 4G to higher ones for 5G and 6G means that rural cellular coverage will continue to shrink over time.

Just as an aside, as she has done in the past, Roth referred to the reduction of BEAD infrastructure grants as a savings to the taxpayer – again hinting that NTIA is going to be reluctant to release much, if any, of the BEAD nondeployment funds.

Nondeployment Funds Still in Limbo

Arielle Roth, the NTIA Administrator, recently testified before the House Committee on Energy and Commerce. Before the hearing, Roth provided a written statement covering a range of the activities currently being pursued at NTIA. This includes:

  • The effort the NTIA is undertaking to help the FCC find 800 MHz of spectrum for public auction. This directive was mandated by the One Big Beautiful Bill. For those who might not be aware of the details of spectrum management, the FCC regulates spectrum used by the public, and NTIA oversees spectrum used by the government.
  • How NTIA is working with the standards bodies that are developing the specifications for 6G. This includes a forum hosted in March that focused on the supply chain issues for U.S. companies building advanced robotics, which I assume must somehow involve 6G.
  • Bragging about progress with universal broadband availability, stressing the role that satellite broadband plays in making broadband available everywhere. She is still touting how the BEAD Benefit of the Bargain rules lower costs to taxpayers. She said the average cost per BEAD location is $4,765. Illinois and California BEAD applications are still pending at NTIA, with the agency having the Illinois proposal for eight months.
  • How NTIA is enhancing public safety through approval of FirstNet and how NTIA got AT&T to agree to take $2 billion less in funding.
  • Finally, Roth talked about an initiative to reduce screen times for school students. It’s a topic I’m still trying to get my head around since I can’t see how NTIA, which is essentially the government’s IT department, has any role in this kind of issue.

There was one big item that was conspicuously missing from her written comments. NTIA is still deciding what to do with the $21 billion of BEAD nondeployment funds that are left after making grants for BEAD broadband infrastructure. This is by far the biggest dollar item sitting at the NTIA, and it’s curious that there was no mention of it in the written comments, since many members of Congress are highly interested in how and when this money will be used.

During her testimony, Roth said that BEAD nondeployment funds are still up in the air. To provide a little history on BEAD nondeployment funds:

  • The original BEAD legislation, passed back in 2020, said that permissible uses of nondeployment funds included digital skills training, telehealth and remote learning access, cybersecurity education, digital navigator programs, or direct subsidies to low-income homes.
  • Originally, twelve states were sure they would have money left over after infrastructure deployment, twelve were sure they would not, and the rest kept the door open to possibly having some nondeployment funding.
  • NTIA completely rewrote the BEAD grant rules in its June 2025 BEAD Restructuring Notice. Those rules greatly reduced the amount of money that would be spent on infrastructure (greatly increasing the nondeployment funds). That Notice made it clear that NTIA intended to redefine the ways that nondeployment funds could be used. After that Notice, Commerce Secretary Howard Lutnick began referring to BEAD nondeployment funds as a “saving” for the taxpayer, implying that the funds would be eliminated or greatly curtailed.
  • During the rest of 2025, as the country awaited the new rules related to nondeployment, a number of Senators, Representatives, and Governors from both parties pleaded with NTIA to release the funds.
  • In December 2025, Executive Order 14365 directed Commerce to withhold nondeployment funds from any states with “onerous” AI regulations and also gave NTIA until March to announce its plans for releasing the nondeployment funds.
  • In February 2026, Commerce Secretary Lutnick announced that Commerce had no plans to withhold nondeployment funds, and NTIA held two “listening sessions” to hear ideas on how to use the nondeployment funds.
  • In March, NTIA slipped the date for making a decision on nondeployment until June 2026. Throughout 2026, both Secretary Lutnick and Administrator Roth have occasionally referred to nondeployment as a savings for taxpayers.
  • During testimony in the House hearing, Roth said that she now expects the plans for BEAD nondeployment to be announced sometime this summer (which could be any time before September 21). Roth said that NTIA wants to get the guidance right and not rush through the process.

It’s anybody’s guess if nondeployment funds will ever be released. It’s now been 13 months since the NTIA changed the rules for nondeployment funds, and they are obviously in no hurry to see these funds ever get spent.

Broadband Shorts July 2026

These are all interesting topics that didn’t fit an entire blog.

GAO Dings NTIA. The General Accounting Office wrote a memo to Arielle Roth, the Administrator of NTIA, that dinged the agency for not reacting to priority recommendations made by the agency. The memo said that NTIA had implemented 77% of the recommendations made by GAO five years ago, but that there are still twenty-two open recommendations that have not been implemented, including ten priority recommendations. The letter says that implementing the remaining priority recommendations would significantly improve NTIA operations.

The priority recommendations say that NTIA should be collaborating better with the FCC for designing studies to evaluate domestic and international spectrum management. The memo says that NTIA needs to step up cybersecurity measures for wireless infrastructure. GAO says NTIA should be communicating and coordinating better with other federal agencies related to broadband funding.

Right to Not Repair. In a 606-page filing at the FCC, AT&T is asking for emergency authorization to stop repairing copper networks that suffer storm damage or damage caused by vandalism. The report lists hundreds of locations that suffered damage across multiple states, covering just the period between April 30 and June 20 of this year, where the company says it will not restore voice services after outages. The company says it wants to instead deploy its resources to build the next-generation networks that will replace copper.

This certainly creates a shortcut way to retire copper – knock copper routes out of service and then seek FCC permission to not fix them. AT&T’s rationale for not restoring service is that it has alternative technology available to customers. But the concept of having a substitute for copper works in cities and towns, but much of rural America doesn’t have AT&T cell towers capable of reaching disconnected copper customers with cellular or FWA service. Anybody who has spent any time with the FCC cellular maps can see the huge holes in rural coverage, and that assumes the cellular coverage maps are accurate, which is often not the case.

Fiber Shortage. Connexon Connect recently told the FCC that it is falling behind on some of its RDOF buildout obligations due to a severely constrained domestic fiber supply. The company said that it has had fiber delivery commitments canceled by vendors that are instead directing fiber to hyperscale data centers. The company said its problems are made worse by the requirements of having to use American-made fiber due to the Build America, Buy America rules required by the BEAD program. The company specifically identified CommScope for canceling commitments for BEAD contracts. CommScope blames Corning on canceling orders to provide glass to CommScope, which it thinks is related to Corning accepting large orders from data centers.

Legislative Mandate for American-made Fiber. A group of bipartisan House members introduced a bill being called the FIREWALL Act that would mandate that fiber used to satisfy all federal grants must be manufactured in the U.S. In the announcement of the bill, Representative Gus Bilirakis of Florida said that the U.S. government shouldn’t be subsidizing technology sourced from countries that pose a threat to our national security. That’s an odd statement since it’s hard to imagine a threat that comes from fiberglass. An odder statement was that he wants to avoid a future rip-and-replace effort related to fiber. Unlike Chinese electronics and software, there is no functional difference in fiberglass strands, regardless of where they are made. I had to laugh when I pictured crews ripping up thousands of miles of fiber.

EchoStar Bankruptcy. EchoStar filed a prepackaged bankruptcy plan for the satellite business and the cellular business.  The company was facing a $2 billion dollar loan payment in July, and didn’t have the cash due to delays in getting paid for spectrum sales to AT&T. The company is counting on over $20 billion in net closing proceeds from the sale of spectrum to AT&T. The company also sold spectrum to SpaceX, which should bring $8.5 billion in cash, $11 billion in SpaceX stock, and $2.2 billion to assist with debt. The company is heavily leveraged and has over $6 billion in current debt and $18 billion in long-term debt.

While the company recently exited the facility-based cellular business, it still owns Boost Mobile, the HughesNet satellite business, the Dish satellite TV business, and online provider Sling TV. None of these businesses are thriving. The company is also facing a slew of lawsuits from vendors and fiber providers who were left stranded when the company suddenly ceased business. It will be interesting to see what the company does with any excess cash after the spectrum sales close.

Digital Equity Grants Inch Forward

You may read headlines that lead you to believe that the courts have restored the Digital Equity Act as a result of a lawsuit by the National Digital Inclusion Alliance (NDIA). The ruling from Judge John D. Bates of the U.S. District Court for the District of Columbia is a lot more complicated than that.

If you’re brave enough to venture into the court order, you’re going to quickly figure out that, unless you are a constitutional lawyer, you aren’t going to understand a lot of the background and discussion inside the order. If you want a plain English summary of the order, I direct you to the excellent summary from the Benton Institute – and even that is challenging to read in places for those not used to reading court orders. Rather than rehash everything in the order, which was done well by Benton, I’m going to cut to the conclusions of the case and talk about what this might mean for those still hoping to get digital inclusion grants.

What did the Court order? The Administration killed the $2.75 billion grant programs that were part of the Digital Equity Act. This suit specifically challenged the termination of the Digital Equity Competitive Grant program, where NTIA made direct grant awards for digital inclusion activities. This suit did not address the Digital Equity Capacity Grant program, where State Broadband Offices were slated to make digital inclusion grant awards.

The Court did not yet order the NTIA to continue with the Competitive Grant program. The order basically eliminated the government’s stated reason for canceling the grant program. The government argued that making grants based on race was unconstitutional. The court agreed with that argument, which is a big win for the Administration, since this is the first Court to so plainly agree with that assertion. But the Court further ruled that if grant requirements based on race are removed, the rest of the lawsuit can continue. The government said in a footnote of their pleading that they would be willing to immediately reinstate the Competitive Grant program if the race issue were removed. The two sides are now required to file a joint status report by August 1 that proposes a schedule for continuing the case.

So what’s next? One possibility is that the government will want to continue to dispute some of the other claims by NDIA, and if that happens, the court case would continue.

The possibility that digital inclusion advocates hope for is that the government will be good on its word and will agree to end the suit now that the race criteria are gone. If that happens, it’s likely that the Court would order NTIA to restart the Competitive Grant program.

Nobody knows what that would mean. NTIA could decide to get moving again with the grant program. However, NTIA might still be reluctant to award these grants if that’s the message they get from the Administration, and they could slow-roll the process, just like they are doing with the BEAD nondeployment funds. NTIA could decide to take a fresh look at the grant rules now that race has been removed and start the process over. Even if NTIA moves forward, I find it unlikely that NTIA would automatically honor the grants that were already awarded and would make everybody apply again. I wouldn’t make any bets that NDIA is going to get a grant award from this program.

The other half of this program is the Capacity Grant program, which was going to give money to states to make digital inclusion grant awards. There doesn’t seem to be any direct ties between this case and that grant program, so it likely stays in limbo, even if the Competitive Grant program restarts.

There is also a big concern that the Administration has recommended no funding for this program in next year’s budget, so the entire program could quietly die through lack of funding, even if NDIA prevails in this lawsuit.

There is a ray of hope here, and digital inclusion folks should continue to hope and should continue lobbying Congress to keep the funding alive and to press NTIA to make the awards. But I can’t foresee anything happening quickly, even if the Court clears this off its docket in August.

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.

Walking Away from BEAD

NTIA has released all but four states to begin signing BEAD contracts with grant winners. Mississippi and Oklahoma have gotten final approval by NTIA but are waiting for approval from NIST. NTIA has still not approved the grant proposals from California and Illinois.

Now that the process of negotiating contracts for grant winners has started, news is seeping out of some grant winners backing out and refusing to accept the BEAD grant awards.

The largest BEAD award being rejected is by Astound in Texas, which is walking away from $166 million in grants. The company explained this by saying that it had only won five of the thirty-three project areas it had applied for, and that the remote geographic areas of the awards made no sense without winning more awards. I have to wonder if the company’s pending merger with Google Fiber also played a role in the company walking away. While it isn’t official, I’ve heard through the grapevine that Astound is also going to walk away from $112 million of BEAD grants in Oregon. The company has also tentatively won $100 million in Washington.

Another ISP walking away from a lot of awards is Resound Networks. Resound is walking away from $60.2 million in New Mexico, $23.1 million in Texas, $8 million in Kansas, $5.2 million in Arkansas, and $3.9 million in Colorado. The company also has relatively small grants in Arizona and Oklahoma. Resound is tentatively slated to win $34.4 million in California, which still has not been approved by NTIA.

There are three ISPs that haven’t signed grant contracts in Nebraska: Amazon, Northeast Nebraska Telephone Company, and Pinpoint Communications. I have to wonder what it means for a satellite company to not accept a grant, since the company has grant awards across the country.

There are bound to be other ISPs who will walk away that we haven’t yet heard about, since States have six months to get contracts from grant winners after the State signed a contract with NTIA for the BEAD money. I’ve been hearing about a lot of smaller ISPs that are still thinking about walking away from BEAD. Some will do so because the too-low grant funding means they can’t get a letter of credit.

It won’t be surprising if there are more rejections of BEAD. When NTIA initiated the Benefit of the Bargain rules, it significantly sliced the amount of grant funding per location. Many ISPs had said before Benefit of the Bargain that the long-term math for taking BEAD grants was marginal. That math took a big turn for the worse when NTIA forced the States to further lower the amount of grant awards. Any ISP that stays after the Benefit of the Bargain is accepting a smaller margin than they originally had hoped for.

At the same time that the amount of grant awards has been squeezed downward, ISPs are seeing inflation in the cost of fiber construction – inflation much higher than the rate of increase for the whole economy. The Fiber Broadband Association conducted a survey with members at the end of 2025 and asked about expected increases in construction costs for 2026. 88% of the respondents expected a cost increase for construction in 2026. 62% of respondents expected a ‘slight’ cost increase of less than 10%. 26% expect a cost increase of more than 10%. 9% expect costs to stay the same, and 3% expect costs to decrease by less than 10%.

It will be interesting to see how ISPs respond to this same question at the end of 2026. The industry is being pounded by increases in chip costs due to shortages as chip manufacturers have pivoted to building AI chips. Higher oil prices have affected the cost of shipping and operating work vehicles, and oil is a raw material component of things like fiber sheathing, conduit, and electronics housings. There is a lot of pressure this year from wage increases. The Federal Reserve made it clear last week that it will not be lowering interest rates this year and may have to instead increase them by year’s end.

We’re still seeing defaults six years after the initial RDOF awards, and I expect there will be ISPs that accept BEAD now but realize in a few years that they can’t make the math work.

I feel sorry for State Broadband Offices that are being asked to find replacements for ISPs that reject BEAD awards. It feels unlikely that NTIA will allow States to increase the size of the grant awards after a rejection. Every default could become a windfall for satellite companies, while a lot of communities are losing the chance to get fiber.

Extension of Capital Project Fund Grants

There is a glimmer of hope that ISPs that won state grants that were funded from the Capital Project Fund (CPF) can get an extension of six months to complete grant construction.

The Capital Project Fund was created by the 2021 American Rescue Plan Act (ARPA) and provided almost $10 billion to states and territories for making broadband-related grants. The program was administered by the Department of the Treasury, which gave block grants to States. Each State then made awards through State Broadband grant programs to ISPs. I’ve seen estimates that CPF grants have funded projects to bring new broadband infrastructure to roughly 2 million rural passings. The grants could also be used to purchase devices like laptops and computers for qualifying households. The final approved use of the funds was to construct or improve physical community hubs where citizens can remotely access work, education, and telehealth services.

Many State grants awarded under this program have been constructed and up and operating. But as inevitable, some grant winner had delays and don’t expect to finish grant construction by the end of this year when the funding expires.

On May 6, the Department of the Treasury updated the Coronavirus Capital Project Fund FAQs. The update includes a process where some projects can get an extension to complete construction for six months, until June 30, 2027, under the following new rules:

  • States must make requests for an extension by July 31 of this year.
  • Extension requests are not generic and must be related to a specific project.
  • To be eligible for an extension, a project must have already made material progress toward completion. The project must certify that it can’t complete construction by the legislative end of the CPF program of December 31, 2026.
  • The reasons for the extension must be to extenuating circumstances beyond the grantee’s control. The FAQ lists eligible extenuating circumstances to include, but are not limited to, permitting or regulatory delays, supply chain disruptions, labor shortages, or severe weather events.
  • ISPs can’t ask for an extension for reasons like inadequate planning, project management deficiencies, failure to secure financing, or other avoidable causes.
  • Treasury is not obligated to grant the extensions and will review each extension request based on the specific facts and merits.

This is very good news for projects that were delayed by external events. For example, I know there are CPF projects in North Carolina that were significantly delayed due to Hurricane Helene. The State government here has already started the process of identifying projects that might benefit from the extension.

Note that not all state broadband grants were funded through Capital Project Fund dollars. For example, around $350 billion was given directly to state and local governments to meet infrastructure needs through the State and Local Fiscal Recovery Plan (SLFRF). This covered a lot more than broadband and could also be used for a wide range of infrastructure projects like dams, bridges, roads, etc. I’ve seen estimates that over $8 billion of this money made it into State broadband grant programs.

SLFRF is being administered by NTIA, and at this point, there are no announced plans for any extension of this funding, which expires on December 31, 2026.