States Provisionally Award Rural Electrics and Telcos About $2 Billion in BEAD Support

States have nearly completed naming the provisional winners of funding through the Broadband Equity, Access, and Deployment (BEAD) Program. So far 49 of the 50 states have named winners of more than $18 billion in provisional awards to broadband providers. NRTC estimates that telephone companies serving rural America won about $1.3 billion in provisional awards and that rural electric cooperatives won about $590 million for a total approaching $2 billion.

However, current estimates are preliminary. The National Telecommunications and Information Administration (NTIA), the federal agency overseeing the program, must approve all awards before final BEAD awardees begin receiving support. NRTC expects firmer estimates will be available by the end of the year.

Many NRTC members are among the preliminary winners. Online publication Telecompetitor, operated by NRTC’s Pivot, has been maintaining a state-by-state tally of BEAD provisional awards as the states have released them. The latest update on Oct. 21 shows that all states except California have announced provisional winners. The list also shows provisional winners for the District of Columbia but does not yet include winners from five U.S. territories.

For some, the preliminary award news comes as a disappointment. NTIA in June 2023 allocated $41.6 billion out of the total $42.45 billion program for distribution to the states. However, most states are awarding less than half of their allocations. Texas, for example, had the largest allocation at $3.312 billion; its total provisional awards announced earlier this week came to $1.271 billion.

Earlier this year, NTIA made significant changes to the BEAD rules. Proponents of the new rules said they would hasten distribution of BEAD support. Congress created BEAD through The Infrastructure Investment and Jobs Act of 2021, but at the start of the Trump Administration, the program had not awarded any funds. The administration claimed that rules connected to DEI, climate change, union labor and other issues had inordinately delayed the program.

Critics say looser restrictions on awards to lower-cost, lower-speed satellite and fixed wireless ISPs drew funding away from higher-quality fiber projects.

Regardless of the reason, it appears that several billion dollars in funds meant for broadband network construction will remain unspent and the ultimate use of those funds could be the subject of political and court battles.

“Some states are looking at using their non deployment funds for digital skills training, telehealth, workforce development, and public services, such as providing computers and rate discounts [for low-income consumers] …. or middle-mile networks in places to support AI and huge data centers,” said Teresa Ferguson, senior director, Broadband and Infrastructure Funding. However, NTIA may consider returning funds to the U.S. Treasury.

Update, Nov. 7: According to an article published this morning by the Benton Institute for Broadband and Society, Senator Joni Ernst (R-IA) is preparing a bill to reclaim nearly half of the funds originally intended for the $42 billion BEAD program. Current law would direct “non-deployment” funds not earmarked for broadband network construction through the states to data collection, broadband mapping, broadband affordability programs and others.  The Ernst bill, according to a draft of the legislation on the Benton website, would send those funds to “the general fund of the Treasury, for the sole purpose of deficit reduction.”