Viewpoints
The NTIA’s plans for a second Benefit of the Bargain round for BEAD is the policy outcome the FBA had wished for, Gary Bolton writes.
By: Gary Bolton, President and CEO, Fiber Broadband Association (FBA)
One of the biggest broadband access problems the nation has faced for years is what to do with households and businesses who don’t end up getting served through no fault of their own when a service provider defaults on its federal grant commitment. For example, the Federal Communications Commission’s Rural Digital Opportunity Fund (RDOF) saw defaults on around $3.3 billion awards of the $9.2 billion initially awarded, leaving 1.9 million locations stranded as of early 2025.
“Every program has defaults,” Carol Mattey, principal at Mattey Consulting and former FCC deputy bureau chief, told me on a March Fiber for Breakfast podcast. “Circumstances change. People that think they want to make a commitment, find out for various reasons that things are not playing out the way they expected. I would be astonished if there aren’t defaults in BEAD.”
Fortunately, National Telecommunications and Information Administration (NTIA) Administrator Arielle Roth announced a solution to the broadband grant default problem in early September by making the $21 billion in Broadband Equity, Access, and Deployment (BEAD) Program non-deployment funding available to cover missed locations. The agency announced this solution was arrived at through “significant” public input on how to best use the BEAD funds, with the constant theme throughout public comments for the need to connect locations that were identified after submission of final BEAD proposals.
States and territories will now be able to access a portion of the $21 billion “Benefit of the Bargain” savings to connect newly identified unserved locations that were not previously included in the FCC’s broadband map, as well as other locations that have become eligible as a result of defaults or changes in previous federal and state broadband programs. This is the policy outcome that the Fiber Broadband Association and many other organizations advocated for, and I am glad NTIA agreed.
The NTIA’s Supplemental Policy Deployment Notice says the agency will conduct a final “true-up” review to identify any remaining locations that may be unserved and provide a supplemental BEAD eligible location list to the states to conduct a second “Benefit of the Bargain” round to serve these locations in what hopefully will be a “speed round” for both states and the NTIA.
The NTIA will also set an upper limit of funding based on the average cost of serving a Broadband Serviceable Location (BSL) under a state’s approved final BEAD proposal and the number of additional unserved locations, with the states able to seek a waiver if the cost of the proposed Supplemental Deployment Plan exceeds that established threshold, for reasons such as a priority broadband project. However, NTIA says it expects states to “use all levers within its control” to complete deployment within the established amount of funding.
I suspect many states will be seeking waivers for several reasons. Taking into account the increased cost of deployment due to inflation of goods and services, newly qualified locations may not benefit from economies of scale that would have derived from being a part of a larger first-round build.
The guidelines for priority broadband projects can easily scale over time to meet growing connectivity needs, and support deployment of 5G and other advanced services. These guidelines are all attributes where fiber is the best and only choice.
Alaska is one state that anticipates benefiting from the BEAD Supplemental Deployment Plan, with Senator Dan Sullivan noting there are potentially more than 5,000 additional locations in the state that would be eligible for funding under the new policy.
We will likely not know the full impact of the supplemental round for months. States need to review their NTIA supplemental location list, revise and publish it for public inspection, conduct an abbreviated challenge process, submit the final supplement list to NTIA for review and approval, then conduct a 90-day second “Benefit of the Bargain” round. In addition, they have to prepare and submit a Supplemental Deployment Plan, along with get review and final approval from the NTIA.
The latest research from New York Law School’s Advanced Communications Law and Policy Institute estimates there will be over a million – 1,041,099 to be precise – locations that will appear on the NTIA’s supplemental list if both unserved and underserved locations are included, with anywhere from $5.3 billion to $8.8 billion to be spent on additional deployments, depending on whether provider match is included in the average cost per location. This is over 815,000 homes and 221,000 businesses, plus nearly 5,600 mixed-use buildings across the country that need high-speed connectivity for participating in today’s digital economy.
More importantly, connecting every home and business in America is a necessity as we move from today’s information-based society to a thinking economy with AI at its heart.
There’s no escaping the importance of AI, the technology that is reshaping our lives, jobs, and the global economy. Hundreds of billions of dollars are being invested in building data centers to train and run the latest general purpose AI models, while agentic AI will provide businesses and individuals with increased productivity and efficiency.
How will individuals, institutions, businesses, and communities access the thinking economy? Fiber is the obvious and optimum choice, providing scalable broadband for unserved and underserved locations, and essential reliability and resilience for modernized public safety communications.
AI needs lots of bandwidth and low latency to work effectively, as do needed 911 upgrades from legacy systems to NG911 enhanced services supporting precise GPS mapping and multimedia support so the public can send text messages, photos, and live video directly to public safety dispatchers.
Tens of billions of dollars are being invested by cloud and fiber companies to increase domestic fiber production in the United States over the next five years, a clear signal that AI is here to stay and fiber is the means that will enable the thinking economy to grow and thrive. Amazon, Meta, and NVIDIA have all invested in and/or signed long-term purchase agreements with Corning, while Corning, Fujikura, Lightera, and Prysmian are all building new fiber plants.
With AT&T, Verizon, Zayo, and other service providers making long-term commitments to secure fiber and deploy it, fiber is an established and essential technology for today and tomorrow. AT&T alone plans to spend more than $250 billion through 2030 to expand and modernize its network, part of a necessary upgrade to replace legacy copper and support the advancements of AI today, and quantum in the future. With long haul carriers adding capacity to existing fiber routes and adding new routes thanks to the AI boom, states need to examine new possibilities for win-win partnerships to leverage these builds for supplemental builds.
As the first round of BEAD builds shift into high gear, there will be no rest for most of the nation’s state broadband offices (SBOs) as they prepare for the opportunity of the second BEAD round. FBA stands ready to support SBOs in their efforts in any way that we can, so we can connect everyone in the country with the best broadband services in the world.
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