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The Trump administration has unveiled changes to a $42.5 billion program to fund high-speed internet in underserved areas, and some are already blasting it as a step backward.
“This is a betrayal of rural America,” says the Benton Institute for Broadband and Society, a group focused on expanding affordable high-speed internet.
On Friday, the Commerce Department announced "critical reforms" to the Broadband Equity Access and Deployment (BEAD) program in an effort to remove “regulatory burdens” and bring down the costs. Commerce Secretary Howard Lutnick hailed the revisions, saying "The American people will get the benefit of the bargain, with connectivity delivered around the country at a fraction of the cost of the original program.”
But US states, internet providers, and lobbying groups warn that the changes risk delaying and upending the entire BEAD program by diverting funding for planned gigabit fiber installations to slower satellite internet services such as SpaceX’s Starlink.
(Photo by Joan Cros/NurPhoto via Getty Images)The revisions show that the Commerce Department is indeed de-prioritizing fiber in the BEAD program to shift toward “technology neutrality,” opening the door for more funding to flow to satellite internet services and “terrestrial wireless,” such as T-Mobile’s 5G Home Internet.
It’ll be up to ISPs to apply for the funding. Under the BEAD program, each US state and territory has been developing their own funding plans, which involve a competitive bidding and negotiation process.
'It's Pretty Bad'
The problem is that a few US states, including Louisiana, Delaware, and Nevada, had reached the final stages of receiving BEAD funding. But it looks like the new reforms from the Commerce Department will force all US states to redo their plans to some extent. “Eligible Entities have 90 days to comply with the obligations outlined within this Policy Notice and submit a Final Proposal that reflects the results of the Benefit of the Bargain round,” the department said in its notice.
It’s why Evan Feinman, the former director for the BEAD Program who resigned in March, gave a harsh assessment of the changes. “It’s pretty bad —in some ways worse than we’d expected,” he told PCMag.
“It rescinds prior approved final proposals for Louisiana, Nevada, and Delaware; it doesn’t respect any of the progress made in dozens of other states, or the hundreds of millions in taxpayer and private funds already expended,” he added in a LinkedIn post.
“It requires least cost everywhere, for all tech, which will dramatically reduce fiber and fixed wireless connections relative to satellite connections,” he also noted.
(Photo by Silas Stein/picture alliance via Getty Images)The Benton Institute also points out that the satellite internet service Starlink is already available to residents across the US. "Investing in fiber networks is a better long-term value, delivering affordable, reliable high-speed access for decades to come," the group's executive editor Kevin Taglang said in an email.
In a statement, the Benton Institute added: “Commerce Secretary Howard Lutnick is shifting BEAD so rural America will once again be left stuck with slow, unreliable, and expensive satellite internet access. Secretary Lutnick wants to invest in the ‘cheapest’ broadband infrastructure, not the best broadband infrastructure. It’s a self-inflicted wound to American competitiveness.”
The nonprofit and open internet advocate Public Knowledge also faulted the Commerce Department for its focus on satellite internet technologies, calling them “technologically inferior, capacity-limited, and environmentally constrained"
"The Commerce Department is wasting public dollars on services that cannot deliver what communities need,” the group added.
Meanwhile, Gigi Sohn, the Biden administration’s former pick for FCC commissioner, dismissively wrote "'Benefit of the Bargain' my ass,” in response to Lutnick’s announcement.
“I call it ‘Lutnick's Folly.’ I call it that because I have reason to believe that smarter folks in the White House and the Administration thought that the states should have been left to decide what technology was best for their residents, but the Commerce Secretary wouldn't listen,” she wrote on LinkedIn.
Finally Closing the Digital Divide?
However, Joe Kane, a director for broadband policy at the Information Technology and Innovation Foundation think tank, sees positives in the revisions.
“My top-level takeaways are that it's right to make the program tech neutral. It does that by basing the definition of ‘priority broadband’ on meeting performance metrics, rather than by the technology that provides that performance,” he wrote. This means the ISP must offer speeds at least of 100Mbps for downloads and 20Mbps for uploads.
“It will be more open to all non-fiber technologies. The prior rules required a state to select a fiber provider even if it cost thousands of dollars more per house than other technologies,” Kane added. “BEAD locations are largely in relatively remote areas, so there are places I'd expect LEO (low-Earth orbiting) satellite and fixed-wireless access (FWA) to perform well. Allowing everyone to bid on a level playing field will be the real test of that.”
Although it’s true that fiber can supply far faster broadband than satellite internet services such as Starlink, Kane said the same fiber installations can also be the most expensive. “In the rural areas that comprise the bulk of BEAD locations, the cost to deploy fiber is exorbitant. BEAD policy is about tradeoffs,” he added. “ For example, rather than giving a fiber provider $70,000 to serve one house, we could serve that house with a far cheaper technology and given over a hundred low-income houses affordability support.”
However, Kane did take issue with the Commerce Department effectively delaying all state plans for BEAD’s “non-deployment funding,” or funding that goes beyond internet installation projects, which could include funding for broadband-sign up efforts, digital literacy programs, and free Wi-Fi in apartment buildings.
The Commerce Department plans on issuing further guidance on non-deployment funding for BEAD. But Kane said it “should quickly issue that updated guidance so that deployment cost savings can be paired with states using excess funds for targeted affordability and adoption efforts. That's the way to make BEAD a program that really closes the digital divide.”
In the meantime, the Commerce Department's National Telecommunications and Information Administration (NTIA) plans on completing its review of final proposals from each state within 90 days of submission. A fact sheet also says the revisions were designed to eliminate requirements in the BEAD program concerning climate change, net neutrality, and DEI, describing them as "burdensome" and "oppressive."