In 2021, the Broadband Equity Access and Deployment (BEAD) program authorized more than $42 billion in grants to “connect everyone in America to reliable, affordable high-speed internet by the end of the decade.”
This bill was included in an infrastructure bill three years ago, and yet not a single household has been connected to the internet through the BEAD program.
The Promise of Government-Funded Internet
Home internet has revolutionized our lives, making it almost impossible to function in the world without it. However, not everyone has access to safe, secure internet access. The Biden administration hoped to provide equality for the US residents through BEAD.
Optimism for the BEAD program is high as fiber network builders and operators will connect more homes, gain more customers, and make more money through the government.
Not Moving Fast Enough
However, the BEAD program isn’t moving fast enough for some. Brendan Carr, the senior Republican commissioner of the Federal Communications Commission (FCC), wrote on X, formerly Twitter, “In 2021, the Biden Administration got $42.45 billion from Congress to deploy high-speed Internet to millions of Americans.”
He continued: “Years later, it has not connected even 1 person with those funds. In fact, it now says that no construction projects will even start until 2025 at [the] earliest.”
The Program May Not Move Forward Until 2026
Alan Davidson, the administrator at the National Telecommunications and Information Administration (NTIA) which is overseeing BEAD, told lawmakers in May that BEAD wouldn’t have “shovels in the ground” until 2025 or 2026.
Carr blames delays in the program on “the addition of a substantive wish list of progressive ideas” to the approval process.
Others Criticize the Program
Carr isn’t the only Republican who feels the BEAD program is not moving forward fast enough. In an April 2023 letter to Davidson, 11 Republican US Senators warned that “NTIA’s bureaucratic red tape and far-left mandates undermine Congress’ intent and would discourage participation from broadband providers while increasing the overall cost of building out broadband networks.”
The senators noted, among several other examples, that NTIA’s BEAD proposal “requires subgrantees to prioritize certain segments of the workforce, such as ‘individuals with past criminal records’ and ‘justice-impacted […] participants.'”
The Complicated Rollout
In a letter to Commerce Secretary Gina Raimondo back in 2022, Republican senators warned that NTIA’s proposed BEAD rollout was too complicated and would cause millions of Americans to be underserved.
The senators wrote that the BEAD programs “create a complex, nine-step, ‘iterative’ structure and review process that is likely to mire State broadband offices in excessive bureaucracy and delay connecting unserved and underserved Americans as quickly as possible.”
The Problems With the Grants
According to Reason, the multiple representatives from the telecommunications industry have no interest in applying for a piece of Minnesota’s $652 million in BEAD grants. But why?
Brent Christensen, president and CEO of Minnesota Telecom Alliance, which represents 70 Minnesota telecom companies, said, “None of them would bid for the federal grants because of the regulations that would come with it—especially the requirement to provide low-cost services to low-income households in exchange for grants that would allow internet providers to build out their networks.”
A Risky Program for Some
MinnPost noted that new state laws also “requir[e] companies who receive state grants to pay workers a ‘prevailing wage,’ a basic hourly rate paid on public works projects to a majority of workers in a particular occupation.”
“It’s becoming clear that it might be too risky to participate in the program,” Melissa Wolf, executive director of the Minnesota Cable Communications Association, told the news outlet.
Other States Struggle, Too
Minnesota isn’t the only state having troubles with BEAD program grants. Mackinac Center notes that Michagan’s BEAD application strays far from the stated mission of providing internet access to those who don’t have it.
“Rather than building duplicative infrastructure, MIHI could get more people online by equipping community organizations with resources to help those who already have access get connected, and by expanding broadband subsidies to low-income families,” Dr. Theodore Bolema writes.
Connecticut Tries to Connect
Connecticut also has its eyes set on $139 million in federal funding for high-speed broadband connection. Residents who don’t have access to 25/3 Mbps service or access to 100/20 Mbps service could get better internet connectivity.
While residents hear promises of stronger and more reliable broadband, several factors make it unclear if these improvements will actually happen.
The Inequality in the Proposal
The MIHI proposal is not neutral. Instead, it is using funding to pick winners and losers among competition telecommunications companies, specifically those who expensive wireline fiber over emerging wireless technologies that could make cable wire and other wireline technologies obsolete in the near future.
MIHI also proposed leveraging control over the federal funding to create its own rate regulation system for internet service in the state, exposing a huge hole in the BEAD program.
Speeding Up the Process
Carr already has an idea for speeding up the process and making the BEAD rollout much smoother without the current road bumps that are already being hit.
He proposes that the Broadband Equity, Access, and Deployment program stop everything it is doing and simply “cut everybody a coupon for $600–which is effectively the price of a Starlink dish–and mail that coupon to everybody and call it a day.”
Ending the BEAD Program Delays
Carr’s proposal would be the most cost-effective plan that delivers faster results than the MIHI proposal, which would cost about $4,232 per unserved household in the unknown future.
Taxpayers are paying for this program, and it doesn’t have to be expensive or serve those who are already receiving great internet access. While delays in the $42 billion BEAD program are likely, there have been no moves made to make this program a reality.
Connecting Americans
The Federal Communications Commission’s most recent report on the state of broadband in America found that millions of Americans lack access to reliable broadband service. Millions more must procure broadband service from a local monopolist.
The US BEAD program hoped to limit monopolists and open up reliable and affordable WiFi to communities and households that need it.
Do These Programs Work?
Before BEAD, the Federal Communications Commission (FCC) agreed to give over ten billion dollars to a similar program that aimed to ensure broadband access to underserved areas. The Connect America Fund (CAF) focused heavily on rural communities.
However, we need to assess the scale and importance of CAF and BEAD to determine if they are efficient and feasible to roll out.
The Study
In a peer-reviewed study, Harvard Law Review looked at the serviceability rate of these programs to help policymakers evaluate the success of these programs and design a new and better policy to help tackle the digital divide in the US.
The study found that the serviceability rate stands at 55%, dropping as low as 18% in some states.
Concerns About Self-Reported Data
Because state and federal policymakers have raised questions about the self-reported data from CAF, alongside widespread reports about problems in CAF, the Harvard Law Review used the Broadband-Plan Querying Tool (“BQT”), a tool that can take a dataset of street addresses and shows the set of broadband plans like download speeds, uploads speeds, and prices.
This allowed the team to explore whether the service is available to addresses certified as being served through the CAF program.
4 out of 7 Communities Are Being Serviced
The study looked at over 537,000 street addresses across 15 selected states, and 4 selected ISPs—internet service providers–to measure serviceability.
Through this sample, only 55% of these ISPs CAF addresses can receive broadband service, raising accessibility concerns even through a government-funded program.
Where Did $10 Billion Go?
So where is your $10 billion in taxes going if it isn’t bringing communities online through the CAF? If the CAF isn’t working, then who knows if the BEAD program will be able to pick up the pieces.
In areas farther from cities, serviceability rates were lower, despite CAF’s intention to support rural connectivity.
CAF Seemingly Failed
These trends suggest that CAF is not succeeding in its mission to connect undeserved communities. Even if it does, the providers receiving funds from the program are not meeting the standards established by the CAF.
If ISPs accept public subsidies on certain conditions and are constantly failing to meet the minimum service standards, then what will happen if they are unable to live up to their end of the bargain? They’ve already taken the money, so what’s next?
A Massive Warning Sign for BEAD
These policies are well-intention, but greed often undermines even the best-laid plans. The failures and limited successes of the CAF serve as a major warning sign, complete with blinking lights and bells, indicating that the BEAD program faces similar pitfalls that we should examine closely.
The biggest worry is that $40 billion of taxpayer funds will be going into the BEAD program. Americans want to see their $40 billion put to use rather than see it go back into the pockets of telecom companies that fail to meet the basic standards required of the program.
Looking to the Past to Prepare for the Future
State officials responsible for selecting BEAD grantees need to consider past compliance with funding programs when deciding how to allocate these funds.
As we can already see, some state officials are already taking advantage of the program by bending the rules and failing to meet the minimum standards put in place.
Ensuring These Programs Work
Policymakers should implement more stringent rates and service quality requirements to prevent rule-benders from serving specific communities and excluding those the funds are meant to support.
Ensuring these regulations are in place can provide greater value to the communities these programs aim to serve.
The Future of Public-Funded Programs
One way to keep these programs and recipients in check is by encouraging policymakers to commit to data-driven program development, especially data that is not self-provided.
This could help policymakers decide how to adapt the program, putting the public’s investment into something that serves them.
