Half of BEAD funds may end up unspent, report says
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By
Chris Teale
Around $21 billion of the federal broadband program could be left over, according to recent research, which also found that as many as 1 million locations could still be unserved.
A federal program to roll out broadband might end with about half of its funds unspent but may also leave up to a million locations unserved, according to new research.
The Broadband Equity, Access and Development program may only spend around $21 billion of the $42.5 billion it was allocated, researchers at the Advanced Communications Law and Policy Institute at New York Law School found last week.
Researchers said those savings — which have already been anticipated to at least some extent by the National Telecommunications and Information Administration — would come due to various rule changes to the program earlier this year, including dropping the preference for expensive fiber projects and changing to a “tech-neutral” approach and removing requirements around labor, climate change and others. NTIA also changed rules to encourage lower bids to serve locations with broadband.
Michael Santorelli, ACLP’s director and a report co-author, said he is surprised to see so much money likely to be unspent.
“It's unusual in any government program to have leftover money,” he said. “The expectation for most programs and things that are rolled out by Congress is that you have money earmarked for a certain purpose, and then you usually expect all that money to be used for the purpose that it's been earmarked for. This notion of having leftover funds or savings or unclaimed funds, or however you want to describe it, is a new dynamic, at least in the broadband space.”
If the findings are correct, it means there will be a lot of money left that has been appropriated to BEAD that President Donald Trump and his administration might try to rescind, as they have other appropriations. But ACLP has other ideas.
The group called for the administration and NTIA to “strategically invest” the leftover funds, including to put as much as half into a reserve fund that could be used for a second round of BEAD grants later or could help with any unexpected costs for this round of projects.
ACLP also urged NTIA to set aside $5 billion to help expand networks and bolster their resiliency, which could include underwriting projects to replace utility poles, modernize public safety and emergency responder networks, bolster cybersecurity and harden systems in areas prone to outages.
Finally, the ACLP suggested using $5 billion to support digital literacy training programs, in an echo of the digital equity grants that Trump killed this year, which is now being challenged in court. NTIA has declined to say how states could spend those leftover funds, or if it intends to reinvest them elsewhere or otherwise return them to the Treasury. Santorelli said there is an “assumption by many that they won't let the states do what they wish with the leftover funds.”
But there is also evidence that this investment still will not be enough to close the digital divide. In a separate analysis, ACLP found that 1 million locations may still be unserved with broadband, even after BEAD is completed. Santorelli said that figure may fall as various mapping data is rationalized across the states and other grant programs continue to have an impact. But given the likelihood that some internet providers default on some of their grant awards, as has happened in the past, a significant coverage gap will remain.
ACLP said the BEAD reserve fund could also help connect anyone still without broadband given this finding. But leaving that many locations unconnected would represent something of a failure for BEAD’s original goal.
“Even if it's in the hundreds of thousands, then BEAD really won't have achieved its goal that everyone understood when Congress created it and put all this money behind it to bring broadband to as many people as possible,” Santorelli said. “I don't think we'll ever get to 100% because it's such a moving target. When you have potentially hundreds of thousands, if not upwards of a million locations that will remain unserved once BEAD ends, and you have $21 billion left over, that begs the question of whether the program has really succeeded in its mission.”
Defaults have been the “Achilles’ heel of past broadband efforts,” NTIA Administrator Arielle Roth said in a speech to the Hudson Institute late last month, as she pledged that the agency would conduct strong oversight and prevent it from becoming “just another well-intentioned broadband program that falls short.”
“Being good stewards of taxpayer money means holding awardees accountable and making sure those who take taxpayer dollars will deliver on their promises,” she said. “That is what will set BEAD apart and ensure that this really is the last broadband funding program.”