Some states are finding it difficult to entice providers to participate in the Broadband Equity, Access, and Deployment (BEAD) Program due to the myriad hoops (i.e. regulations) through which those companies must jump. Industry leaders in multiple states have recently said they expect no buy-in from their groups’ members.
BEAD is set to distribute $42.5 million in federal taxpayer dollars to all 50 states and American territories for the purpose of closing the digital divide. But the National Telecommunications and Information Administration (NTIA) under the Biden administration has implemented several leftist parameters to the program, such as unionized labor requirements and price controls, that threaten to derail BEAD before it connects the first American.
Brent Christensen, president and CEO of Minnesota Telecom Alliance, recently told MinnPost that he expects none of the alliance’s 70 members to apply for any of the $652 million from BEAD to be distributed in that state.
Christensen pointed out that many of the group’s members primarily operate in rural areas, which are already expensive to connect without putting additional restrictions on the projects. He singled out the low-cost option requirement as a large impediment to participation.
“To put those obligations on small rural providers is a hell of a roadblock,” Christensen said. “Most of our members are small and can’t afford to offer a low-cost option.”
His counterpart at the Minnesota Cable Communications Association, Melissa Wolf, agreed that the low-cost provision “just won’t work for smaller providers.”
The Mackinac Center for Public Policy opined that in Michigan “the entire BEAD funding program appears to be collapsing before any funds are distributed,” with providers in that state also resistant to participate due to the NTIA’s parameters. Like several other states, broadband officials in Michigan plan to score applications higher that dictate specific prices for service.
The Mackinac Center also criticized the plan by the Michigan High-Speed Internet Office for diverting funds away from the neediest rural areas of the state. “MIHI is seeking to replace existing wireline connections with more expensive fiber for politically favored areas that already have excellent internet access,” the organization argued in a policy brief.
North Dakota State Broadband Program Director Brian Newby said at the Broadband Nation Expo in Washington, D.C., in October that while his state already has 99 percent broadband coverage, connecting the last 5,000 locations will not be easy.
Newby said he’s not confident there will be a great level of participation in BEAD. “We don’t think people are going to bid,” he said. “At least that’s the chatter in our state.”
North Dakota is starting the bidding process with an anonymous initial bidding round to see who is willing to participate, Fierce Telecom reported. The state hopes to submit its final BEAD proposal in the summer of 2025, with Newby expecting the process to be “a 10-year slog.”
Leaders at the largest telecom companies have expressed concern about BEAD, as well. Charter Chief Financial Officer Jessica Fischer previously said that the rules for the program could deter private investment.
“There could be some limitation to the total amount we invest that’s related to our lack of willingness to bid in states where we won’t be able to get the returns because the rules aren’t conducive to it,” she said.
The Free State Foundation released a report in September that said BEAD price controls “will deter supply and lead to shortages…of experience, capable [providers] willing to participate.”
“This is not at all an acceptable outcome,” the report stated.
NTIA Director Alan Davidson has announced he plans to step down when president-elect Trump is inaugurated for his second term. Hopefully, the Trump administration will relax some of the NTIA’s policies that could deter investment into the BEAD program and ensure greater participation to connect those still in need of broadband service.
Johnny Kampis is director of telecom policy for the Taxpayers Protection Alliance
This article was originally published at www.thecentersquare.com
