Republicans criticized the Biden administration for not yet distributing grant money, but the NTIA said in November that it had approved initial funding plans submitted by every state and territory. Feinman said the change in direction will delay grant distribution.
“Some states are on the 1-yard line. A bunch are on the 5-yard line. More will be getting there every week,” he wrote. “These more-sweeping changes will only cause delays. The administration could fix the problems with the program via waiver and avoid slowdowns.”
The program is on pause, even if the new government leaders don’t admit it, according to Feinman. “The administration wants to make changes, but doesn’t want to be seen slowing things down. They can’t have both. States will have to be advised that they should either slow down or stop doing subgrantee selection,” he wrote.
Delaware, Louisiana, and Nevada had their final proposals approved by the NTIA in January, a few days before Trump’s inauguration. “Shovels could already be in the ground in three states, and they could be in the ground in half the country by the summer without the proposed changes to project selection,” Feinman wrote.
The three states with approved final proposals are now “in limbo,” he wrote. “This makes no sense—these states are ready to go, and they got the job done on time, on budget, and have plans that achieve universal coverage,” his email said. “If the administration cares about getting shovels in the ground, states with approved Final Proposals should move forward, ASAP.”
Other states that were nearing the final stage are also in limbo, Feinman wrote. “No decision has been made about how much of the existing progress the 30 states who are already performing subgrantee selection should be allowed to keep,” he wrote. “The administration simply cannot say whether the time, taxpayer funds, and private capital that were spent on those processes will be wasted and how much states will have to re-do.”
The Benton Institute for Broadband & Society criticized what it called “Trump’s BEAD meddling,” saying it would “leave millions of Americans with broadband that is slower, less reliable, and more expensive.” The shift to a “technology-neutral” approach should not be “technology-blind,” the advocacy group said.
“Fiber broadband is widely understood to be better than other Internet options—like Starlink’s satellites—because it delivers significantly faster speeds, is more reliable due to its resistance to interference (from weather, foliage, terrain, etc), has higher bandwidth capacity, and offers symmetrical upload and download speeds, making it ideal for activities like telehealth, online learning, streaming, and gaming that require consistent high performance,” the group said.
It’s ultimately up to individual states to distribute funds to ISPs after getting their allocations from the US government, though the states have to follow rules issued by federal officials. No one knows exactly how much each Internet provider will receive, but a Wall Street Journal report this week said the new rules could help Starlink get nearly half of the available funding.
“Under the BEAD program’s original rules, Starlink was expected to get up to $4.1 billion, said people familiar with the matter. With Lutnick’s overhaul, Starlink, a unit of Musk’s SpaceX, could receive $10 billion to $20 billion, they said,” according to the WSJ report.
The end of BEAD’s fiber preference would also help cable and fixed wireless providers access grant funding. Lobby groups for those industries have been calling for rule changes to help their members obtain grants.
While the Commerce Department is moving ahead with BEAD changes on its own, Republicans are also proposing a rewrite of the law. House Communications and Technology Subcommittee Chairman Richard Hudson (R-N.C.) yesterday announced legislation that his office said would eliminate “burdensome conditions imposed by the Biden-Harris Administration, including those related to labor, climate change, and rate regulation, that made deployment more expensive and participation less attractive.”
US Senator Ted Cruz (R-Texas) has been demanding an overhaul of a $42.45 billion broadband deployment program, and now his telecom policy director has been chosen to lead the federal agency in charge of the grant money.
“Congratulations to my Telecom Policy Director, Arielle Roth, for being nominated to lead NTIA,” Cruz wrote last night, referring to President Trump’s pick to lead the National Telecommunications and Information Administration. Roth’s nomination is pending Senate approval.
Roth works for the Senate Commerce Committee, which is chaired by Cruz. “Arielle led my legislative and oversight efforts on communications and broadband policy with integrity, creativity, and dedication,” Cruz wrote.
Shortly after Trump’s election win, Cruz called for an overhaul of the Broadband Equity, Access, and Deployment (BEAD) program, which was created by Congress in November 2021 and is being implemented by the NTIA. Biden-era leaders of the NTIA developed rules for the program and approved initial funding plans submitted by every state and territory, but a major change in approach could delay the distribution of funds.
Cruz previously accused the NTIA of “technology bias” because the agency prioritized fiber over other types of technology. He said Congress would review BEAD for “imposition of statutorily-prohibited rate regulation; unionized workforce and DEI labor requirements; climate change assessments; excessive per-location costs; and other central planning mandates.”
Roth criticized the BEAD implementation at a Federalist Society event in June 2024. “Instead of prioritizing connecting all Americans who are currently unserved to broadband, the NTIA has been preoccupied with attaching all kinds of extralegal requirements on BEAD and, to be honest, a woke social agenda, loading up all kinds of burdens that deter participation in the program and drive up costs,” she said.
Impact on fiber, public broadband, and low-cost plans
Municipal broadband networks and fiber networks in general could get less funding under the new plans. Roth is “expected to change the funding conditions that currently include priority access for government-owned networks” and “could revisit decisions like the current preference for fiber,” Bloomberg reported, citing people familiar with the matter.
Reducing the emphasis on fiber could direct more grant money to cable, fixed wireless, and satellite services like Starlink. SpaceX’s attempt to obtain an $886 million broadband grant for Starlink from a different government program was rejected during the Biden administration.
Internet service providers are eager to get money from a $42.45 billion government fund, but are trying to convince the Biden administration to drop demands that Internet service providers offer broadband service for as little as $30 a month to people with low incomes.
The Broadband Equity, Access, and Deployment (BEAD) program was created by a US law that requires Internet providers receiving federal funds to offer at least one “low-cost broadband service option for eligible subscribers.” The Biden administration says it is merely enforcing that legal requirement, but a July 23 letter sent by over 30 broadband industry trade groups claims that the administration is illegally regulating broadband prices.
The fund is administered by the National Telecommunications and Information Administration (NTIA). The NTIA is distributing money to states, which will then distribute it to ISPs. Before obtaining money from the NTIA, each state must get approval for a plan that includes a low-cost option. Nearly half of US states have already gotten approvals.
Although the law requires ISPs receiving grants to offer a low-cost plan, it also says the US may not “regulate the rates charged for broadband service.” In the letter sent to US Secretary of Commerce Gina Raimondo, ISPs claim that the NTIA’s demands for specific prices violate the ban on rate regulation:
We have also heard from stakeholders of specific instances in which certain State broadband offices have faced the prospect of political pressure unless they acceded to a $30 rate for the low-cost service option. This contravenes the clear language of the Infrastructure Act, which states that “[n]othing in this title may be construed to authorize [NTIA] to regulate the rates charged for broadband service.”
ISPs want to upend approved state plans
Funds like BEAD are intended to help ISPs build broadband networks in areas where it would otherwise not be economically feasible. In other words, the government giving money to ISPs directly lets the telcos make a decent profit on network-construction projects in areas where subscriber fees alone wouldn’t be enough.
ISPs receiving funds don’t have to offer the low-cost broadband plan to everyone. They only have to offer it to eligible subscribers who meet low-income requirements, as detailed in the NTIA’s Notice of Funding Opportunity.
Despite that, ISPs claim that prices for the low-cost option should be calculated based on “the economic realities of deploying and operating networks in the highest cost, hardest-to-reach areas.” The letter said:
While NTIA purports to give States the flexibility to choose a low-cost program that meets their particular needs, the reality is much different. According to NTIA’s own program guidance, it has “strongly encouraged” States to set a fixed rate of $30 per month for the low-cost service option. For a broad cross-section of America’s rural broadband providers, the $30 rate is completely unmoored from the economic realities of deploying and operating networks in the highest cost, hardest-to-reach areas that BEAD funding is precisely designed to reach.
Groups signing the letter include USTelecom, which represents AT&T, Verizon, CenturyLink/Lumen, and many other telcos. It was also signed by lobby groups for small cable firms and rural telcos, and numerous lobby groups for ISPs in specific states. The state-specific lobby groups signing the letter are from Alaska, Alabama, North Dakota, Montana, North Carolina, Kansas, Georgia, Illinois, Indiana, Iowa, Michigan, Minnesota, Nebraska, Nevada, New York, Ohio, Oregon, Oklahoma, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Washington, and Wisconsin.
Many states have already received approval for their grant plans, including plans for requiring low-cost options. The NTIA today announced approval of New Mexico and Virginia’s initial proposals, bringing the total count to 22 states plus the Northern Mariana Islands, the District of Columbia, Puerto Rico, and the US Virgin Islands. Another 30 states and territories are waiting for approval after having submitted initial proposals by December 2023.
The lobby groups want the NTIA to reverse approvals for existing states’ plans. Their letter said the agency should “require each State to revise the low-cost service option rate proposed or approved in its Initial Proposal so that the rate is more reasonably tied to providers’ realistic costs, such as by using the FCC’s Urban Rate Survey benchmark.”
