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Funding Freeze Makes More Uncertainty for BEAD

A White House memo directed agencies to pause all grant spending until Feb. 10.

Funding Freeze Makes More Uncertainty for BEAD
Photo of President Donald Trump by Gage Skidmore

WASHINGTON, Jan. 28, 2025 – Most observers reviewing the White House memo directing executive agencies to pause federal grant spending for 13 days, or until Feb. 10, believe that the $42.5 billion Broadband Equity, Access and Deployment grant program is covered by the pause.

The American people elected Donald J. Trump to be President ofthe United States and gave him a mandate to increase the impact of every federal taxpayer dollar. In Fiscal Year 2024, ofthe nearly $ 10 trillion that the Federal Government spent, more than $3 trillion was Federal financial assistance, such as grants and loans.
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But one analyst said that states with already approved broadband spending plans – Louisiana, Nevada and Delaware – should be safe to spend without a pause.

On Monday night, the White House circulated a memo directing executive agencies to pause federal grant spending until Feb. 10. “To the extent permissible under applicable law, Federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance,” read the memo, authored by Matthew Vaeth, acting director of the Office of Management and Budget.

Democratic lawmakers condemned the memo, arguing the White House can’t unilaterally pause funding Congress approved. Groups including the National Council of Nonprofits, the American Public Health Association and the Main Street Alliance on Monday morning filed a lawsuit seeking to block the freeze.

Less than a week ago, the Trump administration clarified a separate executive order pausing federal spending applied only to certain energy projects, causing relief amid speculation BEAD would be caught in the crossfire. Monday’s memo restored a sense of confusion.

According to Monday’s memo, the pause is set to take effect at 5 p.m. Tuesday. 

Trump appointees are in the meantime supposed to review spending programs for alignment with the new administration’s priorities—opposition to clean energy and diversity programs, among other things.

Blair Levin, policy advisor at New Street Research and former FCC chief of staff, said it’s likely the National Telecommunications and Information Administration, the Commerce agency handling BEAD at the federal level, won’t greenlight any state spending plans during the pause. States are the ones fielding grant applications from ISPs and selecting projects under the program.

But the three states with approved plans should still be able to move forward, Levin said. The states didn’t comment. Each state’s BEAD allocation was obligated last year when its proposal for implementing the program was approved, but their slate of grant recipients need the NTIA green light under program rules 

“Congress approved these investments and they are not optional, they are the law,” Senate Minority Leader Chuck Schumer, D-N.Y, posted on X. “These grants help communities in red states and blue states and support families, help parents raise kids, and lead to stronger communities.”

Legal issues aside, Levin said the NTIA was already unlikely to approve final spending plans in the coming days.

“Even without the memo, we would not have been surprised to see NTIA informally pause spending while it awaits guidance on how the Trump Administration wishes to proceed with the program,” he wrote in a note to investors Tuesday. “The operative question for investors is what happens after February 10th.”

The Commerce public affairs office didn’t respond to requests for comment.

Philip Macres, a telecom lawyer who works with ISPs that participate in BEAD, agreed the memo likely covered the program, but hadn’t immediately heard anything from NTIA or state broadband offices.

“I will continue preparing BEAD applications and meeting deadlines set by state broadband offices until I specifically and expressly hear from them that their specific application deadlines have been paused,” he wrote in a LinkedIn post.

Levin and others said they would watch the Wednesday confirmation hearing for Howard Lutnick, tapped to head the Commerce Department under Trump.

“We will be looking for signals from him and the Senators as to the fate of the BEAD program. We will also be looking for signs from the states as to the cost of delays,” he wrote. He added Louisiana should still be able to meet its goal of shovels in the dirt within 100 days, but “other states may weigh in on the costs of delay to their states.”

More than half of all states have begun taking grant applications under the program. Republicans in Congress, including Sen. Ted Cruz, R-Texas, whose telecom policy head is rumored to be next in line to lead NTIA, have expressed a desire to loosen BEAD’s fiber preference if they can.

Louisiana governor Jeff Landry, penned a letter to Lutnick last week asking him to change some reporting requirements and make it easier to fund non-fiber projects, but stopped short of calling for a pause or for scrapping the fiber priority entirely.

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