- Commerce chief Howard Lutnick said he’s kicked off a “rigorous review” of the BEAD program
- Congress subsequently introduced two new bills geared toward modifying BEAD requirements
- Many states are well-underway on their grant processes – for now
The writing on the wall finally came to pass, as the telecom industry prepares for a major overhaul of the Broadband Equity, Access and Deployment (BEAD) program.
Shortly after the Wall Street Journal reported Commerce Secretary Howard Lutnick was plotting BEAD changes, the Department of Commerce confirmed the news with a brief but straight-to-the-point press release.
“Under my leadership, the Commerce Department has launched a rigorous review of the BEAD program. The Department is ripping out the Biden Administration’s pointless requirements,” said Lutnick. “It is revamping the BEAD program to take a tech-neutral approach that is rigorously driven by outcomes, so states can provide internet access for the lowest cost.”
Presumably, this means BEAD’s fiber preference will go away so that more of the program’s $42.5 billion will go towards providers of fixed wireless access (FWA) and low-earth orbit (LEO) satellite service. Elon Musk’s Starlink could potentially receive $10-20 billion in funds, sources told the WSJ.
Everyone saw the tech-neutral route coming from a mile away, but we still don’t know how exactly the new NTIA regime will modify the BEAD rules. Congress however did serve up some ideas in the form of two new BEAD-specific bills.
The Streamlining Program Efficiency and Expanding Deployment (SPEED) for BEAD Act, introduced by Rep. Richard Hudson (R-NC), seeks to remove BEAD requirements related to rate regulation, prevailing wages, climate resilience, diversity, equity and inclusion (DEI) initiatives and more.
Separately, Sens. John Curtis (R-UT) and Rick Scott (R-FL) unveiled the Broadband Buildout Accountability Act. This would remove the BEAD program’s Freedom of Information Act (FOIA) exemption so that the public can request information on how BEAD money is being spent.
Interestingly, the SPEED for BEAD legislation would allow states to use surplus BEAD funds for telecom workforce development programs, suggesting Republicans aren’t entirely in agreement with how non-deployment funds should be spent, said New Street Research Policy Analyst Blair Levin.
“D.C. Republicans appear interested in spending funds only on deployment, though the Hudson draft appears to allow funds available post deployment to be used for workforce development,” he wrote in a Thursday note to investors.
What the SPEED for BEAD bill doesn’t do is set a new high-cost threshold, which is basically the monetary cut-off point that allows states to choose a less expensive technology over fiber.
“For funds to materially shift, the high-cost threshold must be $10,000 or lower,” Levin said. “While between $10,000 and $30,000 there will be a shift, but it will be more incremental than material.”
The waiting game is afoot
States are waiting on Congress and the Commerce Department to make their BEAD changes. But they’re not sitting still either, as many are actively running their grant programs. Louisiana, Nevada and Delaware meanwhile have already selected their winning providers.
If the revamped BEAD program forces states to redo their plans or grant processes, “it will delay any shovels in the ground by a year or more,” said Levin.
Just in the past few days alone, states like Arkansas, Indiana, Missouri, Wisconsin and Virginia received a total of over 4,000 BEAD applications, according to Jake Varn, associate manager of the Pew Charitable Trust’s broadband access initiative.
Each of these states have dozens of ISPs participating in the bidding process, he said on LinkedIn.
“The talk out of D.C. this week around how the BEAD program works and what can be done to improve it feels completely disconnected from the reality states and communities are experiencing,” Varn said.
