Even as the National Telecommunications and Information Administration moves to push states’ BEAD final proposals through, discussions about what to do with more than $20 billion in non-deployment funds continue to rage.
Impact: Two Republican senators, Roger Wicker (R-MS) and Shelley Moore Capito (R-WV) introduced legislation last week known as the SUCCESS for BEAD Act designed to establish a new framework for distributing the remaining BEAD funds. Trump Administration officials want to tie access to the leftover funds to a recently issued Executive Order on AI as a way to prevent states from implementing their own AI regulations, and Fierce Network reported the EO requires the U.S. Department of Commerce and NTIA to issue a policy notice within 90 days that explains eligibility for non-deployment funds. The EO language requires NTIA to bar states with “onerous AI laws” from gaining access to the remaining BEAD money and instead calls for “minimally burdensome” national guidelines on how AI can be regulated. But the order doesn’t define onerous, and that could lead to challenges from states who want the rest of their BEAD funding while reserving the option to regulate AI. The publication Governing reported that 46 states passed 159 laws related to AI in 2025, raising the risk that states might not acquiesce to the administration’s demands. Prior to the final AI EO, NTIA said that it would provide an update on how much money BEAD saved during the Benefit of the Bargain round in early 2026, and Administrator Arielle Roth has discussed using some of the excess funding for streamlining the broadband permitting process.
The Senate legislation appears to be a way for Congress to outmaneuver the EO and instead legislate a framework that would guide the process for distributing non-deployment funds. Telecompetitor reported that the bill calls for the non-deployment funds to be distributed through a competitive subgrant process that would give priority to projects that meet specific criteria ingrained in the legislation and require a 25% subgrantee match while establishing a mandatory public challenge process to prevent overbuilding. Projects that would meet the non-deployment criteria would fall under six areas: infrastructure improvement in rural areas, the enhancement of public safety and/or national security, network resiliency and cybersecurity protections, federal or military facilities, improve network latency, and the advancement of AI and related technologies. That could include things like wholesale fiber, mobile wireless infrastructure, undersea cables, 911 upgrades, and workforce development, per Fierce Network, but not data centers. Nor does it tie the funding to state AI laws or regulations. With opposition to the AI EO and the administration’s attempts to implement nationwide AI rules coming from both sides of the political aisle and the public, the legislation might provide an end around to the administration’s plans, especially if it has industry support. Telecompetitor said USTelecom CEO Jonathan Spalter called the legislation a “timely, pragmatic proposal” that will help ensure BEAD non-deployment funds deliver the best value to the public.
While state and federal officials grapple over the excess BEAD funds and what to do with them, a new ruling from the Government Accountability Office threatens to add yet another delay to the deployment process. The GAO recently ruled that when NTIA revised the BEAD guidelines, it failed to submit a report required under the Congressional Review Act to both houses of Congress and the Comptroller General. The GAO also found that NTIA did not provide any response outlining the legal reasons for changing the BEAD guidelines. Fierce Network reported that under the CRA, Congress has the authority to review and disapprove of any federal rules for 60 days. While it’s unlikely the Republican majorities in Congress will move to strike down the revised guidelines, the 60-day clock on the decision could delay the distribution of deployment funds. As one consultant noted, the failure to comply with the CRA won’t affect the BEAD program financially but could generate confusion around the program’s rules and impact funding distribution, particularly if the National Institute of Standards and Technology has to stop its review process of the final proposals. That could again prolong the wait times for unserved and underserved customers expecting access to high-speed broadband service. And if Congress does decide to act on the NTIA failure to submit the changes for review under the CRA, the entire BEAD schedule under the new guidelines could be thrown into disarray. That seems unlikely, as does the idea that Congress will send NTIA back to the drawing board to revise its updated guidelines, but in today’s political environment anything’s possible on any given day, so it’s something to monitor once the 60-day clock starts in Congress.
