Federal BEAD Funding Moves Closer to Reality

State allocations for the $42.5 billion Broadband Equity, Access, and Deployment program that aims to extend high-speed broadband service to millions of unserved and underserved locations across the country were finally revealed this week

Impact: In an event at the White House, President Biden introduced the BEAD program to the country as the federal government’s “biggest investment in high-speed Internet ever,” part of the administration’s push for universal and reliable high-speed broadband access by 2030. Although the BEAD program has spurred much conversation in the broadband industry since its inclusion in the Infrastructure Investment and Jobs Act in 2021, the event aimed to build awareness about BEAD and how the administration views broadband as critical infrastructure. The program will be administered by the National Telecommunications and Information Administration, part of the U.S. Commerce Department, which has developed guidelines for states to use to disburse the money in the form of grants to providers interested in deploying high-
speed broadband in hard-to-connect areas identified by the FCC’s revamped nationwide broadband map. Under the federal definition, an unserved area lacks speeds up to 25/3 Mbps while an underserved area has speeds under the program’s 100/20 Mbps threshold.

NTIA followed the White House event with an official announcement about how much of the $42.5 billion in federal funding will go to each state, with the allocations reaching into the billions of dollars for 19 states, although only Texas topped the $2 billion mark. As the recipient of the most BEAD funding, Texas will receive $3.31 billion, followed a top five that includes California at $1.86 billion, Missouri at $1.74 billion, Michigan at $1.56 billion, and North Carolina at $1.53 billion. The large amounts of funding in these states signifies that they have the largest numbers of unserved locations as depicted on the FCC broadband map when compared to unserved locations nationwide.

It’s not a surprise then that two of the largest states by both size and population topped the list, while the states slated to receive the least amount of funding are the two smallest states by size: Rhode Island ($108.7 million) and Delaware ($107.7 million), followed by $100.7 million for the District of Columbia. On a per capita basis, Alaska will get the largest amount with an allocation of more than $1 billion, while Massachusetts got a total of $147.4 million, the least amount per capita. In addition to the states set to receive more than $1 billion, more than half (32) will receive more than $500 million. Most of the states at the lower end of the funding allocations have smaller populations and/or have already deployed broadband to a significant percentage of their population. Among U.S. territories, Puerto Rico will receive the most at $334.6 million, followed by the Northern Mariana Islands at $80.8 million, American Samoa at $37.6 million, and the U.S. Virgin Islands all the way at the very bottom of the entire list with $27.1 million coming its way.

All 50 states and the District of Columbia will receive a minimum allocation of $100 million and U.S. territories a minimum of $25 million, with the rest allocated based on the number of locations that don’t meet the program’s high-speed Internet thresholds. Although the official amounts have been released, NTIA will set formal notification of the allocations on June 30, at which point officials will have 180 days to submit their grant program proposals for NTIA approval. Once a state’s initial proposal has been accepted, it will be able to request access to at least 20% of its BEAD funding. State proposals can be submitted starting July 1, giving state officials until December 27 to get them in, although it’s expected that most states had a ballpark idea of their allocations and have been working on their plans ahead of time to get them in as early as possible.

Under the BEAD guidelines, which the states will need to work within when developing their own funding disbursement strategies, fiber will need to be deployed in all but the highest cost areas, although the threshold for a high-cost area will vary by state. But in areas that are considered high-cost, NTIA will accept HFC, DSL, and fixed wireless (using licensed spectrum) deployments as long as they offer speeds of at least 100/20 Mbps. Notably, satellite Internet was not included as an acceptable alternate technology. It’s expected that most providers, once they receive funding, will work to deploy symmetrical gigabit or faster speeds using both buried and aerial fiber deployments. In fact, one recent analysis from fiber infrastructure firm Conexon projects that the bulk of BEAD deployments in rural areas will likely utilize aerial fiber to save on costs. The company pointed out that burying fiber costs three to four times more than stringing fiber along existing telephone and other utility infrastructure.

The success of the BEAD program will likely hinge on several factors, including how well NTIA can keep a tight reign on where the funding goes once it distributes the money to the states. The agency will need to work to dispel concerns about the possibility of overbuilding in areas that already meet the federal high-speed broadband threshold throughout the life of the program. It will also need to help states ensure that the money doesn’t end up with providers that can’t meet their speed and/or deployment commitments. But after the debacle of the Rural Digital Opportunity Fund and rescinding of billions in winning bids, we would expect numerous federal agencies to keep a close watch on where all the BEAD money ends up. Additional factors that could impact the program’s success include the Buy American rules for federal infrastructure programs, which may need to be waived if the administration wants BEAD deployments to proceed smoothly within the 2024-2028 timeline set out in the program, and whether Congress will exempt the broadband industry from being taxed on any BEAD grants they’re awarded. The status of the Affordable Connectivity Program could also play into the BEAD success, especially if Congress fails to authorize additional funding to subsidize broadband for eligible households. One or all of these issues could make it significantly more difficult to goal of universal broadband service by the end of the decade.

Share on facebook
Share on twitter
Share on linkedin
Scroll to Top