BEAD Funding Will Flow More Slowly Than Predicted: USTelecom

Broadband access, equity and deployment program funding is flowing more slowly than expected and likely won’t start in mid-2025 as originally expected, Diana Eisner, USTelecom vice president-policy and advocacy, said during a Georgetown University Center for Business and Public Policy webcast Wednesday. Most of the money will start to flow in mid-2026 or later, she predicted. It could even be the second half of 2026, she said.

“The sure volume of this has been overwhelming for the states and for NTIA,” Eisner said. “This program is so unprecedented.” If President Joe Biden isn’t reelected, there are some questions about the future shape of BEAD, she said.

Jennifer Fritzsche, managing director of Greenhill and a senior fellow at the Georgetown center, asked whether BEAD has “a bow on it” and can’t be reversed.

The money has been appropriated, Eisner responded. “It’s sitting in a box” at the Treasury Department “ready to be used and doled out,” she said. The program could change “around the edges” if the administration changes, she said. “The core … will stay the same,” Eisner said.

The BEAD approval process has been slower “than everyone, even NTIA, had expected,” Eisner said. So far, only eight states have approved BEAD plans, which means 46 states and territories are awaiting approval, she said. The Commerce Department has indicated all approvals should be completed by the fall, “so fingers crossed on that,” she said.

BEAD volume 2 plans are the “meatiest” part of the program, and it's only after those plans are approved that states and territories can start soliciting applications from sub-grantees, Eisner said. “They have 12 months to run their whole process before they have to then submit the final proposal, which will detail the outcome of the whole selection process,” she said.

Eisner predicted the USF reform efforts will move forward, and the contribution base will be expanded (see 2310240062). “Right now the USF base is an anachronism -- it only includes the telcos,” she said. The loss of the affordable connectivity program, which expires Friday, has partly driven the process, she said. Senior members of Congress are engaged on the issue, she said. “The hope is to move ACP into USF when it has a more expanded base,” she said: “We’re really looking at not only reforming the base but reforming the program.”

Eisner compared the need for a USF fix to Netflix having to pay the Postal Service for transporting DVDs in the early days of the company. Other companies shouldn’t be able to “ride these networks for free when they are such a source of the need for ongoing maintenance and additional capacity,” she said.

Carolyn Brandon, also a senior fellow at the Georgetown center, predicted a “tough, tough fight” on USF. “Nobody wants to pay even a penny, no matter how strong the equity arguments are,” she said. Brandon also noted that language opening the door to rate regulation by the states seemed to be added to the FCC’s net neutrality order while it was before commissioners (see 2405070077).

Rate regulation is always “a huge concern,” Eisner responded. She reads the revised language in the order as allowing a program comparable to ACP. “There is a case to be made that state rate regulation that is just pure rate regulation would be preempted” even “in the guise of affordability,” she said.

Eisner supported arguments that carriers should no longer be required to maintain historic copper networks while they’re building modern networks (see 2405210059). Consumers demand and need fiber, she said. Copper networks were once “state of the art,” but “they just don’t cut it anymore,” she said. The historical networks are expensive to maintain and only 1.3% of Americans are “landline only,” she said. Landline service can be delivered via fiber or cable, she said. “It’s about embracing the next generation of technology,” she said. No one can stream video on a copper network, she said.