Rural-focused $42B Broadband Equity, Access and Deployment program becomes operational

This article was originally published by Daily Yonder.

After four years of planning, a change in presidential administration that revised program rules, and months of delays, most states have unlocked a portion of funding under a $42.45 billion rural broadband expansion program.

While the lead-up to implementing the Broadband Equity, Access, and Deployment (BEAD) program has been long, state officials and industry analysts say it pales in comparison to the work required to turn plans into functioning networks. 

States have six months to finalize contracts with participating internet service providers and complete required environmental and historic reviews, before construction can begin. Some expect projects to break ground as early as the second half of this year. 

Still, major questions remain, including how more than half the program’s funding will be used. 

What Happens to the $22 Billion in Remaining Funds?

Trimmed from states’ initial deployment plans, the U.S. Commerce Department has set aside roughly $22 billion for so-called “non-deployment” uses. Some lawmakers referred to the reserve as federal “savings.” But the Commerce Department and its National Telecommunications and Information Administration (NTIA), which oversees the program, have since signaled that states will be allowed to access the funds. 

But the exact process remains unclear.

For example, NTIA is nearly two months past its self-imposed March 11 deadline to issue guidance on the funds.

Lawmakers pressed Commerce Secretary Howard Lutnick on the delay on April 22 and April 23, but he offered few specifics, saying only that guidance would come within two months, and that states would be able to pursue “new and exciting things” with the money.

In the meantime, uncertainty is already affecting participation. State broadband offices in Colorado and New Mexico report that some providers who initially expressed interest may ultimately default on preliminary awards. 

Rising costs are one factor: fiber suppliers say prices have jumped as much as 40% in recent weeks. A limited pool of skilled labor is another constraint, an issue the program’s non-deployment funds were meant to address through workforce development efforts.

‘Most Complicated Broadband Grant Program Ever’

Program complexity is also playing a role. Industry experts have described BEAD as the “most complicated broadband grant program ever,” with the program’s former administrator admitting he may have gone too far with certain program requirements. 

BEAD grants layer many costs onto broadband projects that an Internet Service Provider (ISP) building a rural project independently would not incur. These include the environmental and historical preservation studies which many state offices are now developing, buy America requirements that increase material costs, and certain penalties for non-performance. 

For some providers, particularly those serving remote areas, the administrative burden may outweigh the benefits. If recent federal broadband efforts are any guide, those risks are not hypothetical.

A federal program unfolding beside BEAD, the Rural Digital Opportunity Fund (RDOF), has seen more than one-third of providers default on awards. BEAD’s timeline is even more aggressive: While RDOF allows up to 10 years for full deployment, BEAD requires networks to be operational within four years of award.

That puts added pressure on internet service providers, which must navigate one of the biggest barriers to broadband construction before breaking ground: Permitting.

Upon accepting awards, providers have 30 days to certify that they will not take additional federal funds to complete BEAD-funded builds before they can begin to secure the necessary federal, state, and local permits required to initiate construction.

Permitting Legislation Impacting Broadband

As BEAD funding begins to flow, federal lawmakers are renewing efforts to speed that process. During the week of April 20, Congress considered three bills aimed at accelerating broadband permitting. 

Two passed the House, targeting delays on federal lands, where projects are often held up the longest. However, a broader permitting omnibus bill, the American Broadband Deployment Act, was pulled from the agenda after strong opposition from local government groups.

Backed by industry groups representing major providers like AT&T and Verizon, the 100-page proposal combined language from what had been more than 20 separate bills, and was fiercely opposed by local governments.

The omnibus would create a shot clock from 60 to 150 days during which a state or local government must approve or deny a request for a permit to construct a wireless or wireline project. If the locality doesn’t respond in that time frame, the request is automatically assumed to be “deemed granted.”

The law would also restrict permitting fees to recover only actual costs, instead of the traditional standard of reasonable costs. Local governments argue that the restriction of using actual costs would mean they can’t charge enough to pay for the longer-term monitoring and management of granted rights-of-way. The local governments characterize the effort as a sweeping deregulatory push by an industry set to receive billions in federal funding.

Even under its revised framework, the Trump administration has maintained that BEAD will close the digital divide and characterized other federal broadband programs as “duplicative” and “wasteful.”

However, the program once billed as “Internet for All” is expected to reach fewer households and businesses under the revamped plan, and experts say closing the remaining gaps will require sustained investment.