Secretary of Commerce Howard Lutnick has been vowing to “revamp” the $42.45 billion Broadband Equity, Access, and Deployment Program—a federal-state partnership established by Congress in the Infrastructure Investment and Jobs Act to provide for rural broadband construction—to remove what he called “burdensome regulations” and “woke mandates” imposed by the Biden administration on states and bidding internet service providers.
On June 6, the National Telecommunications and Information Administration, which administers the BEAD program under Commerce, announced sweeping changes to its guidelines. The program is a centerpiece of IIJA and has been compared by supporters to President Franklin Roosevelt’s rural electrification program in the 1930s. The IIJA gives NTIA the authority to issue binding guidance and waivers through policy notices.
“Today we proudly announce a new direction for the BEAD program that will deliver high-speed internet access efficiently on a technology-neutral basis, and at the right price,” Lutnick said in a June 6 statement. “President (Donald) Trump promised to put an end to wasteful spending, and thanks to his leadership, 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.”
The changes have provoked letters to members of Congress from dozens of entities, including ports and agriculture groups, who plead that they could delay urgently needed broadband rollouts by one or two years.
The Benton Institute for Broadband and Society, a broadband advocacy group, organized an April letter campaign to Lutnick, ultimately signed by 148 state legislators, requesting that the contemplated changes not be made mandatory.
In a June 6 statement, Benton Institute Executive Director Revati Prasad said, “Through the BEAD Program, the Affordable Connectivity Program, and the Digital Equity Act, Congress initiated the most comprehensive effort in our history to close the digital divide. With these tools, we could have finally ensured that all Americans can access, afford, and effectively use reliable, high-speed internet. But over the last year, policymakers have weakened that commitment. … Now, Commerce Secretary Howard Lutnick is shifting BEAD so rural America will once again be left stuck with slow, unreliable, and expensive satellite internet access. This is a betrayal of rural America.”
However, a recent analysis of data gathered by the states on the digital divide suggests the need may no longer be as urgent as BEAD supplicants insist.
Existing awards rescinded
The new policy rescinds all existing BEAD award selections. All states and territories must conduct a new round of subgrantee selection “to ensure fair competition.” All internet service providers can apply, including those that didn’t participate in earlier bidding rounds. States have 90 days to re-submit their Initial BEAD Proposal to align with this policy notice, do another round of grantee selection, complete their selections, and submit a final BEAD proposal.
Under the old BEAD rules, states were taking six to nine months to run bidding processes. Only four states had fully selected service providers: Delaware, Louisiana, Nevada, and West Virginia, with the first three having advanced further by releasing their final proposals, according to NTIA. NTIA rescinded those proposals “as those final proposals no longer effectuate the goals of the program or the agency priorities.”
Under the new process, states are required to use a new NTIA-developed tool, the Environmental Screening and Permitting Tracking Tool, or ESAPTT, intended to “significantly reduce the time and effort required for broadband permitting,” according to the NTIA, which has set a goal to issue National Environmental Policy Act approvals within two weeks for an estimated 90% of BEAD projects and eliminate 3 to 6 months of environmental processing per project.
‘Fiber-first’ ended
The new policy rescinds the Biden administration’s “fiber first” policy in favor of tech-neutrality. This allows states to spend BEAD funds on low-orbit earth satellites or fixed wireless technologies, a course that has been pushed by some states like Louisiana. Critics claim alternatives to fiber are slower and potentially more expensive.
The policy notice terminates Biden-era BEAD requirements on fair labor practices, workforce development, climate change resilience, and net neutrality. According to the Benton Institute, states will now satisfy the Infrastructure Investment and Jobs Act’s requirement to “give priority to projects based on… [a] demonstrated record of and plans to be in compliance with federal labor and employment laws” by requiring a subgrant applicant to self-certify compliance with such laws.
Broadband providers that win BEAD awards can now satisfy the law’s requirement to “ensure reliability and resilience of broadband infrastructure” by establishing risk management plans that account for technology infrastructure reliability and resilience, including from natural disasters (e.g., wildfires, flooding, tornadoes, hurricanes, etc.) as well as cybersecurity best practices.
By law, broadband providers that win BEAD awards must still “include interspersed conduit access points at regular and short intervals” for any project that involves laying fiber optic cables or conduit underground or along a roadway.
The IIJA requires states to adopt local coordination requirements established by NTIA. NTIA concludes that a state shall satisfy this requirement by certifying that it observed the final proposal public comment requirements and received plans submitted by political subdivisions up until submission of the final proposal to NTIA.
States must adhere to the IIJA’s requirement not to exclude various entities (such as municipalities) from eligibility for BEAD subgrants.
Letters urge no delays
Among many other groups, the Pacific Northwest Waterways Association wrote June 9 to Lutnick and its Congressional delegation, “If NTIA changes program conditions, we ask that those changes be optional rather than mandatory. We are concerned that mandatory changes will undermine state authority over state programs (a central feature of the Bipartisan Infrastructure Law [another name for the IIJA]) undo our BEAD and DE plans and delay broadband deployment by a year or more.”
Chris Smith, chief operating officer for Riverside Global and the director of operations for the Corn Belt Ports, a grouping of ports and terminals in central Iowa and Illinois, said, “Over 60% of the products moved through our rural multimodal ports on the inland waterway system support our farmers. Increased access to adequate broadband directly impacts productivity and ultimately the regional and global supply chain. Improving local broadband infrastructure and increasing internet speeds is critical to the success of the farmers, rural communities and the multimodal users of the UMR system.
“The broadband expansion is only possible with BEAD funding. Today’s farm equipment, such as planters, sprayers, combines and tractors, is set up with precision ag technology that allows for the collection and analysis of data. A strong broadband connection at the farm allows farmers to access and transfer data to make better decisions, be more efficient, and improve productivity. The rural regional port simply cannot be a modern, sustainable, rural, regional, multi-modal, inland port without broadband access for the region.”
‘Digital divide’ shrinking
In May, the Advanced Communications Law & Policy Institute at New York Law School released a study showing the much-talked-about “digital gap” has decreased dramatically since the IIJA was passed. The study relied on data that the BEAD program itself required states to gather in a “challenge process” as part of their eligibility review for participating entities.
The ACLPI study found a 59% decrease in unserved and underserved locations across the 46 states the study evaluated since 2023. (Four states—New Jersey, North Carolina, Ohio and Texas—haven’t made their challenge process data publicly available.) This means that fewer than half of locations previously considered eligible for BEAD grants may still be eligible.
The study concluded, “These gains stem directly from continued capital investment by ISPs to extend networks and grant-funded projects via ARPA [the American Rescue Plan Act] and the RDOF [the Rural Digital Opportunity Fund].”
ACLPI’s website, Broadband Expanded, said the study raises important questions, including, “Given these significant and ongoing changes to the contours of the digital divide, are there adequate procedures in place to ensure that BEAD funds are not used to support widescale overbuilding?”
Another part of the IIJA, the Digital Equity Act, designed to address “unequal access to broadband” for “underserved communities,” has come under attack, with Trump calling it a “woke handout based on race.” But Trump will need Congress to make changes to that portion of the IIJA.
David Murray can be reached at [email protected].
