Commerce Secretary says the program “is in dire need of a readjustment” and emphasized “lowest cost” deployments
The U.S. Department of Commerce is going to review the rules surrounding the $42.5 billion Broadband Equity, Access and Deployment (BEAD) program, prompting worries about further delays in the broadband infrastructure funding program under which all state and territory plans had already received NTIA approval to proceed.
U.S. Commerce Secretary Howard Lutnick attacked the Biden administration’s “woke mandates, favoritism towards certain technologies, and burdensome regulations,” in a statement and said that the BEAD program “is in dire need of a readjustment,” with an emphasis on “lowest cost” deployment.
“Under my leadership, the Commerce Department has launched a rigorous review of the BEAD program,” said Lutnick. “The Department is ripping out the Biden Administration’s pointless requirements. 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. Additionally, the Department is exploring ways to cut government red tape that slows down infrastructure construction. We will work with states and territories to quickly get rid of the delays and the waste. Thereafter we will move quickly to implementation in order to get households connected.”
He added: “Under the revamped BEAD program, all Americans will receive the benefit of the bargain that Congress intended. We’re going to deliver high-speed internet access, and we will do it efficiently and effectively at the lowest cost to taxpayers.”
BEAD program, history and allocations
BEAD was created in 2021 as part of the bipartisan Infrastructure Act, and the four years since its creation have been spent with NTIA first tasked with creating the details of the program’s rules per Congress’ direction, then asking states to request funding based on their estimated needs, figuring out how much to actually allocate to each state and having the states create their own five-year plans on how to spend those allocations for NTIA review and approval.
Each state was guaranteed at least $100 million in funding by Congress, and under the allocations decided upon by NTIA, nineteen states ended up with more than $1 billion through BEAD for high-speed broadband deployment that meets speeds of 100 Mbps downlink/20 Mbps uplink, with the stated requirement to connect every American by 2030.
While much of the attention around BEAD has been on the BEAD state plans, the $42.5 billion program also includes other programs focused on connectivity that are already underway, including the Tribal Broadband Connectivity Program and the Middle Mile Program. A number of Middle Mile Program projects have already broken ground.
The National Telecommunications and Information Administration (NTIA), which is part of the Commerce Department, has already approved all of the initial state and territory-level plans on how to spend their BEAD allocations. The approval of those plans by NTIA in late 2024, prior to the Trump administration taking office, meant that states could access funds for plan implementation; in a number of states, vendor selection has been underway for months, and others are just getting started this spring.
Guidance released by NTIA in early 2024 had already opened up the possibility of more use of “alternative” technology choices such as Fixed Wireless Access and Elon Musk’s Starlink LEO satellite service. Those services are required to meet BEAD’s performance requirements off 100/20 Mbps plus latency of less than 100 milliseconds, if they are to be funded with BEAD money.
Lutnick’s move toward more “tech-neutral” rule changes with a focus on “lowest cost”, rather than BEAD’s original strong preference for fiber-based broadband, means that states could shift gears and make satellite and terrestrial wireless a bigger part of their BEAD deployments.
Other regulatory sticking points related to BEAD have been the program’s “Build America Buy America” requirements for domestically made materials and components, which helped to prompt some equipment manufacturers such as Nokia and Ericsson to expand U.S. production of related items.
Congressional testimony this week on BEAD
In a House subcommittee hearing on BEAD yesterday, Greg Hale, CEO of rural Kentucky broadband provider LTC Connect, said that there were ” several parts of the BEAD program that should be closely examined for potential modification,” but added: “This review need not take a long time, and these changes need not take a substantial rewrite of the program. We have already waited long enough for this program to launch, and there are efficient ways to recalibrate specific pieces to make it more effective while it continues to move forward.”
Hale said that helpful BEAD changes could include a “more reasonable approach” to a low-cost option that “better reflects those challenging economics of operating in rural areas,” as well as relaxing “letter of credit requirements, workforce obligations, and other policies that do not relate directly to broadband deployment should likewise be considered for guidance from the agency.”
Hale added: “One area where I would advise caution, however, is in overcorrecting in a way that could undermine the long-term efficiency and effectiveness of the program. Our nation is poised to put tens of billions of dollars into broadband investment. We need a long-term return on our investment—we should not build networks now that will need new investment again or substantial rebuilds in a few years. … We will not get the same kind of networks everywhere given challenges in terrain, density, and other factors that affect the economics. But this does not mean we should settle for a lowest-common denominator either.”
