Flush With BEAD Cash, at Least 13 States Make Plans For ‘Nondeployment’ Funds

WASHINGTON, March 4, 2024 – At least 13 states intend to undertake “nondeployment” projects as part of their funding under the $42.5-billion Broadband Equity Access and Deployment program, according to their initial proposals.

The number of states that expect money left over after allocating funds for all unserved and underserved locations could be higher, and perhaps considerably so.

In addition to the 13 states that have specified nondeployment funding proposals to the National Telecommunications and Information Administration, seven more states say they have enough funding to meet all locations, but do not detail specific nondeployment plans.

Of the remaining 30 states:

12 of them specifically say that they will not have enough funding to cover all un- and underserved locations, and 18 states do not specifically address the issue in their initial proposals.

Breakdown of states with nondeployment plans

The 20 states that are optimistic about being able to use what they regard as sufficient BEAD funds to connect all un- and underserved locations are Arkansas, Florida, Hawaii, Idaho, Indiana, Kentucky, Louisiana, Maine, Massachusetts, Michigan, New Hampshire, New Jersey, North Carolina, Ohio, South Carolina, Tennessee, Vermont, Virginia, West Virginia, and Wisconsin.

Many of these states have outlined plans for how they will use any remaining BEAD funds in drafts.

As per program guidance, states can only pursue nondeployment activities if they have a comprehensive plan to deploy broadband service to all currently unserved and underserved areas within its jurisdiction. 

These remaining nondeployment funds must be used to establish programs aimed at technology education, workforce reskilling, and promoting broadband adoption. Among other endeavors, states are urged to implement broadband assistance programs that provide support for obtaining devices.

Requirements for using nondeployment funds

States seeking access to nondeployment funds were required to detail whether alternative uses of the funds, such as connecting all community anchor institutions to gigabit services, would better align with achieving the BEAD program’s objectives in Volume 2 draft plans submitted to the NTIA, the agency at the U.S. Commerce Department responsible for the program.

Additionally, they were required to outline plans for maintaining a fair, transparent, and competitive subgrantee selection process in their drafts.

Based on Broadband Breakfast’s review of the initial proposals, the 13 states that outlined explicit nondeployment strategies as part of their broadband expansion plans are Arkansas, Florida, Hawaii, Louisiana, Maine, Massachusetts, Michigan, New Jersey, North Carolina, South Carolina, Virginia, West Virginia, and Wisconsin. 

Several state broadband offices, including those in Florida, Maine, and West Virginia, expect it will be necessary to utilize nondeployment funds in conjunction with infrastructure deployment funds. These states report this strategy will be essential for sustaining a sufficient workforce capable of handling upcoming broadband construction initiatives. 

Other states are using the nondeployment funds to address deficiencies in middle-mile fiber, or develop relevant smart technologies.

States with insufficient funding for nondeployment efforts

However, certain states won’t experience the luxury of excess BEAD funds. The 12 states (in Group 5 above) estimating that the cost to provide universal broadband service exceeds their allocation through BEAD are California, Georgia, Kansas, Maryland, Nebraska, New Mexico, New York, Oklahoma, Oregon, Texas, Utah, and Washington, as indicated in their initial proposals.

An additional group of 18 states (Group 4 above) do not specify whether funding will be sufficient or insufficient.

Final awards for nondeployment initiatives will not be finalized until after the completion of subawards for broadband infrastructure deployment projects. 

A closer look at 11 state nondeployment strategies 

Arkansas: ARConnect selected four categories as preferred uses for nondeployment initiatives: education, small business, healthcare, and agriculture. Three of the four categories are aligned with model nondeployment initiatives outlined in the BEAD program guidance.

The fourth category – agriculture – was selected due to its high importance and relevance to the state. Agriculture is Arkansas’ largest industry, contributing around $16 million to its economy and employing roughly one in every seven Arkansans. There is significant potential to develop smart technologies and capabilities for farming practices. Consequently, it is an important priority for the state and BEAD-related nondeployment.

Florida: Currently, the Florida Office of Broadband estimates it may have approximately $200 million remaining after connecting all remaining locations in the state.

The state plans to conduct a subgrantee selection process in parallel to the deployment subgrantee selection process that will prioritize workforce development initiatives. The selection process for nondeployment activities will focus on training, developing, and up-skilling Florida’s broadband-related workforce.

Through conversations with providers and other stakeholders, the office of broadband has realized the state’s access goals will only be possible if the broadband-related workforce is scaled up to meet the needs of building out communities’ access to broadband.

Hawaii: At this time, the Hawaiʻi State Broadband Office anticipates the state will receive enough funding to expend on nondeployment projects. 

“Hawaiʻi will prioritize last-mile service rollout to all identified unserved, underserved, and community anchor institutions locations prior to the execution of nondeployment funding in all cases EXCEPT when a community that should have otherwise been included in the [state broadband availability] map were excluded.”

Louisiana: Based on an analysis, ConnectLA is estimating a need of $645 million to conduct last-mile connections to all unserved, underserved, and community anchor institutions within Louisiana. 

Receiving $1.35 billion, will leave a significant amount of funds available for nondeployment initiatives. The state's priority is workforce development.

Maine: The Maine Connect Authority suggests allocating funds for nondeployment activities to execute workforce development programs before deploying services to all eligible CAIs in the state.

The broadband authority says this prioritization is crucial for the success of proposed deployment activities within the NTIA-required performance period.

Maine currently faces a shortage in its available broadband workforce, and without prioritizing workforce initiatives, the state's ability to implement the BEAD program effectively will be hindered. The urgent requirement for workforce support and investment is substantiated in MCA’s Maine Broadband Workforce Strategy. 

Massachusetts: With approximately 18,000 locations still lacking broadband service, and a significant budget of over $250 million from the Capital Projects Fund and BEAD funds, the Massachusetts Broadband Institute is confident it will close any remaining coverage gaps for mass market residential and commercial service. 

Given this scenario, the state will leverage successful existing digital equity programs to develop and initiate nondeployment activities.

Michigan: The Michigan High-Speed Internet Office expects to allocate a portion of the state's BEAD funding towards supporting activities such as permitting and deployment coordination, application intake, review, compliance, validation, and award monitoring. 

Additionally, technical assistance will be provided to communities, along with other nondeployment activities outlined in the state’s BEAD Five-Year Action Plan.

North Carolina: The North Carolina State Broadband Office will prioritize nondeployment projects that address internet affordability and device ownership.  

South Carolina: The South Carolina State Broadband Office will prioritize using any of the state’s BEAD funds available for nondeployment to address a major deficiency in middle-mile fiber transport networks in rural areas of the state.

“At present, it is difficult for the SCBBO to project the amount of BEAD resources which will be available for allowable nondeployment activities,” notes the state’s draft plan, adding that another priority is to extend broadband infrastructure to every unserved and underserved community anchor institution without access to gigabit symmetrical connectivity.

Virginia: To inform the state’s nondeployment plan, the Virginia Office of Broadband is subawarding Digital Equity Act Planning Grant funds to community action agencies in nine regions across the state to develop regional digital opportunity plans.

These action agencies will assess the digital divide in their communities and develop an implementation strategy to meet the identified need through affordability and adoption programs. This regional planning process will involve communities in the design of potential nondeployment programs.

West Virginia: The West Virginia Department of Economic Development plans to use nondeployment funds for things like handling permits, licenses and workforce development, and hopes to allocate up to $60 million for these activities before deploying broadband to certain community anchor institutions within the state.

The state’s prioritization of these programs over deployment to certain anchor institutions is justified by their role in supporting the successful implementation of proposed deployment activities within the NTIA-required performance period, says the state.

Apprehensive around funding

In spite of confidence by 20 states about being able to meet the objective of connecting all un- and underserved locations, apprehension remains surrounding whether sufficient funding is available for these initiatives.

Recent figures from the ReConnect program reveal a nearly threefold increase in the cost per premises passed over the past three program rounds, spanning from 2020 to 2023. This surge is attributed to recent escalations in construction expenses, labor and material shortages, and the escalating national demand for fiber.

Despite unanticipated costs, draft plans from twenty states express confidence in receiving 'sufficient' BEAD funding to connect all unserved and underserved areas within their state jurisdictions to high-speed internet infrastructure, realizing the program’s objective to provide Internet For All.