What will become of leftover BEAD money?

As they finalize the latest versions of their plans to roll out broadband internet using federal money, many states are finding they will not be spending as much as they previously thought.

At a panel discussion last week, state broadband leaders said they will spend far less than anticipated under the $42 billion Broadband Equity, Access and Deployment program.

Jessica Simmons, Georgia’s deputy state chief information officer and executive director of the Georgia Broadband Program, said at the SCTE TechExpo Sept. 29 that of the $1.3 billion allocated to the state, it is on track to only spend around $310 million. Similarly, Meghan Sandfoss, Kentucky’s executive director of broadband development, said the state will only use around a third of its $1.1 billion allocation. Sandfoss said states are all “wondering what’s next for the remaining funds, if there will be non-deployment projects that come out of this.”

The National Telecommunications and Information Administration said last month it believes states will end up saving at least $13 billion compared to their previous BEAD plans, which have been revised since Commerce Secretary Howard Lutnick announced “critical reforms” to the program in June. NTIA Administrator Arielle Roth said those savings could total at least $15 billion, and that the “results speak for themselves.”

A combination of factors has helped save money rolling out broadband internet. The federal government already has several grant programs, including ones administered by the Departments of Agriculture and Treasury, which have seen success in funding projects throughout the nation. In addition, the American Rescue Plan included dollars to help roll out broadband.

That means the digital divide — and the number of eligible locations to be connected by BEAD dollars — has reduced even before this program has shovels in the ground. Meanwhile, internet service providers, nonprofits and other organizations have also stepped in to help get more people online. 

“I think we're really going to see some tremendous success over the next months,” because of those efforts, Roth said.

In addition, the heightened interest in satellite internet likely has driven down bids from internet service providers to serve locations, meaning the state would be required to spend less. Drew Garner, director of policy engagement at the nonprofit Benton Institute for Broadband and Society, said it has prompted a “race to the bottom” and risks funding projects that end up not being built.

“That is driving fiber and cable and other bids down and causing them to reduce their ambition in terms of how big their networks are going to be, so the providers are just asking for less money,” Garner said. “That is a double-edged sword, because, on one hand, that's an efficiency gain, but on the other hand, in past broadband project programs when we have this race to the bottom and lowest bid wins, we end up funding projects that don't pan out over time. They bid so low that the amount of money they get doesn't actually turn out to be viable to build one of these networks.”

But what happens to those leftover appropriated funds remains an open question. NTIA spokespeople did not respond to requests for comment, while Roth has been publicly tight-lipped about what would happen to that extra money. Federal Communications Commission Chair Brendan Carr has been similarly tight-lipped; at SCTE TechExpo, he said that there “should be a lot of federal dollars going out the door, and everybody wants to make sure that they go on the ground efficiently.”

Leaders are already lobbying hard to make sure the money that was appropriated for BEAD under the 2021 infrastructure law is spent. Louisiana Gov. Jeff Landry wrote to Lutnick last month urging him to follow the law and direct that “remaining BEAD funds be invested in state-led initiatives, subject to NTIA review,” especially in two key areas related to President Donald Trump’s agenda.

Landry said those are around being a world leader on artificial intelligence, including providing funds to aid adoption, workforce, government and infrastructure; and on other policy initiatives including investing in education, workforce training and growing the nation’s industries. Landry noted that the law gives NTIA “wide discretion” in directing how states can spend any remaining funds.

Separately, 10 House members sent Lutnick a letter in late August calling for BEAD funding to be made available for various uses eligible under the law, including connecting community anchor institutions, installing infrastructure in multi-family buildings, data collection and broadband adoption programs. They also noted that the 2022 BEAD Notice of Funding Opportunity allowed for funds to be spent on digital equity, although that might be an unpopular step given that the administration ended grant funding under the Digital Equity Act this year.

“Broadband deployment is critical; however, its long-term success requires parallel investments in the foundational nondeployment activities that enable effective implementation and adoption,” the letter says. “Workforce development and employment, digital safety education, support for remote learning and telehealth and the other nondeployment activities approved under the original NOFO are foundational to delivering secure, high-speed internet to our most underserved communities.”