Bandwidth Hawk
Don’t let the continuing disarray in the federal government discourage you from taking advantage of the Broadband, Equity, Access and Deployment Program.
Disbursement is now mainly in the hands of the individual states. Federal regulators lean right but are competent, and broadband is not a major concern or focus of President Donald Trump.
By: Steven S. Ross, Broadband Communities
What effect will debates swirling around the Broadband, Equity, Access, and Deployment (BEAD) Program have on your current or future grant proposals? What effect might BEAD changes have on potential competitors? And what, if anything, can carriers do about it? And what’s going on in other federal agencies with substantial broadband involvement? Here’s an update.
What’s the good news?
First, the good news. Unlike many other federal government functions, President Donald Trump’s appointments to agencies with broadband regulatory and funding tasks (as we noted a few weeks ago) are known quantities who know broadband. A new Rural Utilities Service (RUS) director at the United States Department of Agriculture (USDA) and its ReConnect program has yet to be nominated.
Existing Federal Communications Commission (FCC) member Brendan Carr, whose appointment as FCC chairman has already cleared the Senate, is sure to do President Trump’s bidding of course – he wrote the broadband chapter in the Project 2025, but Carr is also knowledgeable enough about the industry to offer reasoned guidance. He has been bullish on wireless, especially satellite, communication. But he has also said that the government’s subsequent denial of $900 million in grants SpaceX won in 2021, as part of the Rural Digital Opportunity Fund (RDOF) reverse auction, should not be revisited. And he’s already killed the FCC’s ill-advised proposed ban on bulk pricing.
Carr has also been opposed, in general, to overbuilding of existing older networks with new federally funded fiber. Meanwhile, he has been silent on overbuilding with low-earth-orbit satellite links. It’s worth noting that many BEAD applicants and winning RDOF applicants are incumbents wishing to upgrade to fiber or advanced wireless anyway. In other words, they want to use federal money to overbuild themselves.
Roth nominated to lead the NTIA
Arielle Roth, director of telecommunications policy on the Senate Committee on Commerce, Science, and Transportation, chaired by Ted Cruz (R-TX), has been nominated to head the National Telecommunications and Information Administration (NTIA) at the Department of Commerce.
As I noted several weeks ago, the NTIA administers the BEAD program at the federal level.
Roth has been an FCC staffer as well, advising former Commissioner Michael O’Reilly on wireline services.
At the time of this writing, Roth is in her pre-confirmation “blackout” period. She’s known to be nervous about the strength of BEAD’s tilt toward fiber over wireless (as is Senator Cruz) but she understands the issue well and seems unlikely to tilt much in the other direction. More on that, later.
The White House’s demands
On February 19, Trump issued an executive order demanding that independent executive agencies, such as the FCC, submit all draft regulatory actions to the White House for approval before they are made official with publication in the Federal Register.
Informally, such reviews of FCC, Securities and Exchange Commission and other independent agencies’ major proposals have not been uncommon. Proposed major rules from cabinet-level departments are actually fairly routine.
What is new here is that there are also pending U.S. Supreme Court cases that could invalidate or restrict independent agencies. A total, formal pre-publication censoring of proposed regulations or actions violates the Administrative Procedures Act of 1946 (APA), which sets out orderly, formal comment periods for proposed regulations published in the Federal Register and open, reasoned objection-by-objection acceptance or rejection of publicly proposed changes leading to a final regulation.
If all that comes to fruition, the very purpose for specialized regulatory agencies would be negated and opportunities for bribery and other fraud would be enhanced. The agencies have the staffs and the expertise. The White House has neither.
BEAD lobbying intensifies
Lobbying by various interests looking to grab BEAD funds — $42.5 billion in the main program alone – has been intense and is accelerating.
BEAD “delays” have been blamed on the law itself, enhanced by the NTIA’s “pro-fiber” policy.
There have been no real delays, however. All statutory BEAD deadlines have been met. The Trump Administration wants things to go cheap and fast. It is a longstanding Trump policy. He was, for instance, a quick mover in Atlantic City, when he renovated an old hotel rather than building a new one from scratch.
Glittering competitors wiped him out within a few years and his casino, attracting mainly day bettors from Philadelphia and New York City, went bankrupt.
Rumblings in the Senate
Of course, if BEAD is paying a good part of the build cost, fiber becomes more economically feasible for winners of BEAD grants. But is that a wise use of funds? Sen. Cruz thinks not.
Some in the Senate would also like to move some BEAD funding over to providing broadband subsidies, possibly through the Universal Service Fund at the FCC. However, others note that this is not a permanent source of funding for subsidies.
I have long suggested that wired and wireless can be combined in a build, because some neighborhoods are just too difficult (economically or technically) to use fiber, but with the idea that they eventually get fiber. My widely used “multi-neighborhood” financial model was written with that in mind.
National and large regional wireline carriers (generally Tier 1 and Tier 2 local exchange carriers, or “LECs,” plus the largest cable companies) now often – even usually — find fiber builds attractive despite price competition from wireless and expected eventual competition from Elon Musk’s Starlink. This is because they can lease fiber capacity for delivery to end-users, allowing them to maximize wireless spectrum use by dispersing cellular or P2P wireless hotspots (so-called densifying).
The big carriers have been trying to justify big BEAD grants for themselves by muddying the water with a bunch of silly studies done by the “nonprofit charitable foundations” they fund, favoring big business. Some progressives in Congress have pushed the other way – public monopolies are always better than private ones, they say. I guess they have not lived in New York City!
Fiber remains the surest long-term path
It would be nice (but unrealistic) if politicians, again, let the BEAD process play out. The stated purpose for BEAD is resilience and economic boost, NOT quick deployment. The federal government does not have much remaining spectrum to sell, but this administration will push to sell it. After that, just little shreds (at most) will be available.
Major carriers will pay about $30 billion to grab most of it. Thus, fiber is the surest long-term path. For weather and fire disasters, make sure wireless is possible. But remember that wireless, in the form of temporary satellite links, look ideal for that.
The NTIA (in line with Congressionally passed law) has been encouraging low-customer-fee options in line with BEAD but will probably pull back and lower the pressure. So far, most states have been allowed flexibility to set realistic price floors for their deployments. Most I’ve heard about have ranged from $20 to $70 a month.
Main takeaways moving forward
Congressional Republicans and, of course, the carrier-funded “nonprofits,” have been telling the NTIA that pricing must (under the specific wording of BEAD) be left to the states. But some states are really mandating silly minimum pricing. Massachusetts, for instance, just went for $15 a month. That might work if the funds to disburse come from a central pot like the lapsed Affordable Connectivity Program (ACP) and are paid directly to carriers. It does NOT work well in the BEAD environment because payment by the low-income customers themselves is problematic and, at that price, barely worth billing.
It all adds up to this so far: Smaller carriers are getting steamrolled. Local conditions vary. BEAD is a well-drafted law. That’s why state offices should be allowed to do their jobs, and smaller carriers should stay in touch with each other and with regulators.
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