J. Randolph Luening: What Does Tech-Neutrality Mean for BEAD?

The BEAD Restructuring Policy Notice (Restructure Policy Notice) released on Friday, June 6, 2025, is full of changes.  One is a shift in language from “fiber first” and “Extremely High Cost per Location Threshold” (EHCPLT) to “technology-neutral.”

After another round of bidding, under new rules, where will BEAD end up?  Will the fiber networks the public has been expecting emerge or will they be replaced – to a large extent – by fixed wireless networks and satellite? A hopeful scenario is that:

1. Fiber will continue to dominate as in the Biden-era BEAD.
2. State plans will change slightly, primarily at the margins.
3. Hybrid technology networks will become more common, with “alternative” technology choices appearing in geographically remote / expensive to serve (with any technology) locations.

Here’s why it might unfold in that way

The Policy Notice redefines some familiar concepts:

Section 3.1:
Eligible Entities may not categorically exclude any given technology ….
Priority Broadband Project—The term “Priority Broadband Project” means a project that provides broadband service at speeds of no less than 100 megabits per second for downloads and 20 megabits per second for uploads, has a latency less than or equal to 100 milliseconds, and can easily scale speeds over time to meet the evolving connectivity needs of households and businesses and support the deployment of 5G, successor wireless technologies, and other advanced services (Emphasis added)

Section 3.3:
… a standard installation is the initiation by a provider of fixed broadband internet access service within 10 business days of a request with no charges or delays attributable to the extension of the network of the provider.

The following pages discuss why fiber uniquely fulfills some important “Priority Broadband Project” requirements, how other technologies – while immensely effective – are not viable everywhere, and other factors that may lead to fiber-centric outcomes.

When is fiber a compelling solution (based on the criteria of the Notice), even in a technology-neutral framework?

• In urban / suburban areas over a minimum density threshold.  In such an environment fiber wins, hands down, based on cost and performance.
• In any area with existing fiber. We often think of “unserved / underserved” areas as remote mountain-top locations.  In fact, 30.4% of unserved / underserved and unfunded broadband serviceable locations (BSLs) are in geographic areas with a fiber provider within a few hundred yards (the same FCC fabric L8 hexagon).  In such an environment it is often less expensive for the incumbent fiber provider to add a small number of locations than for someone else to overlay a competing network.
• In areas with cell towers. There are over 100,000 unique cell towers in the US.  According to the Restructuring Policy Notice a Priority Broadband Project must “support the deployment of 5G, successor wireless technologies, and other advanced services”.  4G/5G mobile broadband is typically backhauled using fiber or – if fiber is not available – point-to-point microwave. 
• Where businesses or community anchor institutions have high bandwidth requirements.  Consider hospital and schools: 
  • Hospitals.  The radiology department of a modern hospital is continuously sending and receiving high resolution images.  Each generation of imaging equipment produces higher resolution results / larger file sizes.  A hospital can’t perform its core mission without an exceptionally fast broadband connection.
  • Schools.  The sheer number of students in a large school demands high connectivity.

Perspective:  in our modern world all cities and most towns need high performance fiber access to meet the needs of specific institutions.  No technology, other than fiber, is able to meet these requirements.

Technologies besides fiber often fail to meet Priority Broadband Project requirements

When do specific last-mile technologies fail to meet the requirements of a Priority Broadband Project, as defined by the Restructuring Policy Notice? Often.

WISP architecture (licensed or unlicensed wireless):

• When there is no line-of-sight due to surrounding buildings, terrain obstructions (hills, mountains) or heavy foliage.
• In a multi-tenant environment (rented or owned) where the subscriber does not have roof rights and where they can’t see the access point from their rented or owned portion of the property.

Perspective: A WISP architecture requires a highly directional outdoor antenna.  It is able to perform only if it has line-of-sight (or near line-of-sight, depending upon the technology) to an elevated access point (a tower or high building).  In a rural environment with single family homes these requirements are often met, but not always.  WISP providers as a group, operate with tight budgets.  They rarely have the resources (as a mobile operator would) to spend on high resolution clutter data to model coverage in an urban environment.  As a result, it is hard to argue that they can cover with certainty a particular location.  If deployed as an ISP’s only technology they are likely to fail the requirement (3.3) of installing within 10 business days.  A WISP might install 9 out of 10 requests within 48 hours.  On the 10^th installation request they might discover that the customer does not have line-of-sight and their response will be “We can’t get it done”.

4G/5G architecture (licensed fixed wireless):

• Mobile operators have increasingly offered fixed broadband services.  The offering is convenient (the consumer simply drops a box in his or her window – no wires entering the building and no snaking wires through drywall).  The service is often inexpensive (appealing to low-income subscribers) and “good enough” for those with modest needs.
• The service area is almost always defined by its proximity to existing cell sites.  If it is near an existing cell site, in an area of high signal quality, the experience may be excellent.  If it is not near a cell site, then the experience may be poor (often failing to meet BEAD standards).
• Operators tend to offer service in geofenced areas on an opportunistic basis.  Unlike fiber or cable or DSL the service is not available everywhere in a contiguous area.  It would therefore be difficult to propose such as solution as the primary and only fixed broadband technology in a large area.
• Operators tend to prioritize mobile traffic over fixed traffic.  This means that if the mobile demand bursts fixed users are likely to see reduced speeds.  

Perspective: 4G/5G architectures, unless explicitly deployed for fixed coverage (which few networks are) are unlikely to offer coverage over a large geographic area.  They are also unlikely to meet the “reliability” requirement of a Priority Broadband Project, because the quality of service is likely to degrade during times of peak mobile broadband demand.

LEO satellite

• In an urban or suburban area where demand exceeds the local capacity of the satellite system.
• When there is no unobstructed view of the sky (due to nearby buildings, foliage, or terrain obstructions)
• In a multi-tenant environment (rented or owned) where the subscriber does not have roof rights and does not reside on the top floor with a space (perhaps a patio) with an unobstructed view of the sky.

Perspective:  LEO satellites offer a specular suite of services that complement fixed infrastructure.  They are designed to provide connectivity in exceptionally sparse areas.  Their “sweet spot” is exactly opposite that of fiber.  Fiber is exceptionally functional and cost-effective in dense areas (urban, suburban).  It is an expensive solution in remote areas.   Satellite serves remote areas well.  It runs out of capacity as densities increase.  Satellite in many cases competes with fixed wireless.  It is much harder to make the case that satellite competes with fiber.  BroadbandToolkit.com recently released a whitepaper describing the opportunity and the limitations of LEO satellites.  It includes interviews with industry experts and discusses the technology, the increasing capacity, powerful uses cases / segments, and how it fits with the NTIA’s December Alternative Broadband Technology Policy Notice.

Other factors favoring a fiber-oriented outcome:

• Deference to Preliminary / Provisional Subgrantees.   In the Scoring Rubrics (section 3.4) Eligible Entities may give additional weight to applications from applicants who have provisionally won awards.  These applicants will be overwhelmingly fiber-focused, because the original BEAD NOFO was fiber-focused.
• Prequalification Process.  Entities that have previously qualified do not need to requalify (section 3.3).  This crowd is predominantly fiber-oriented.
• Fewer Unserved / Underserved Locations.  The technology neutral posture means that locations that are currently served at 100 Mbps / 20 Mbps / low latency by unlicensed wireless will be removed from the list of “unserved / underserved” locations.  There will be fewer instances, therefore, of extremely remote (and expensive) unserved locations.  Each broadband office will be required to recalculate their list of locations (section 4.0).
• Litigation Resources.  The NTIA’s ability to overrule state decisions is anchored in a “right to reject any proposed deployment project or specific BSL connection for which costs are excessive, as determined by the NTIA based on the cost characteristic of the area to be served.”  The test has moved from a bright line “fiber only” under the original NOFO to a much more ambiguous (section 3.4) definition of “excessive” in the context of the cost characteristics unique to the area being served.  The burden of proof appears to fall on the NTIA.  Making such a determination would likely include engineering / economic analysis and lots of lawyers.   The NTIA will almost certainly have to pick its battles.
• Calculating Costs.  The new rules focus on “minimizing the cost of deployment” (section 3.4) and avoiding situations in which the “costs to deploy are excessive” (section 3.4).  Costs, of course, are greatly influenced by the required functionality of the network.  Eligible Entities are required to minimize the “overall cost of the Program” (section 3.4), not the cost of each individual project or each individual BSL.  To challenge such a decision is difficult.
• Capex vs. Opex.  While BEAD reimburses capital expenditures the overall cost of broadband access is a mixture of capital expenditures and operating expenses.  Fixed wireless is inexpensive when assessing a fully loaded network and when considering only centralized up-front capital (no opex, no CPE).  If one imagines a lightly loaded network (a likely scenario in a remote location) and includes operating expenses (site real estate lease, fiber backhaul, etc.) the solution may be costly.  It is possible that the WISP business case would be upside down, even though BEAD is covering 100% of the site capital.  In such a scenario the WISP might choose not to bid.  A fiber-based solution has relatively modest operating expenses and therefore might have a stronger business case if its up-front capital is fully paid.  The mixture of capex vs. opex influences participation and sustainability.
• No Extremely High Cost per Location Threshold (EHCPLT) and no national cost threshold.  The Restructuring Policy Notice could have capped the dollar limit per BSL, but its authors chose not to do so (section 3.4).
• Unique requirements for unlicensed fixed wireless (Appendix A) and for LEO satellite (Appendices B and C).  While the Policy Notice opens the door to new technologies, it doesn’t give them a free ride.  It requires providers using unlicensed fixed wireless (ULFW) to demonstrate that they have designed in sufficient capacity and have effectively mitigated interference in the band.  It requires LEO satellite providers to reserve capacity, to pay for installed CPE (something fiber providers and WISPS are not required to do), to advertise their services, to hit adoption thresholds, and to accept an extended period of performance and incremental payments in exchange for no federal financial interest in their physical plant (which would be difficult, since it is not local).
• State Broadband Offices.  State broadband offices, in red and blue states, overwhelming care about enabling long-term solutions.  They are likely to fight hard, given the degrees of freedom in the Policy Notice, to have networks that are as future-proof as possible.  

J. Randolph Luening is the founder of BroadbandToolkit.com, a leading provider of broadband infrastructure planning software and services. BroadbandToolkit.com helps private equity investors, ISPs, and government officials make informed infrastructure investment decisions. Luening frequently speaks and writes on topics of broadband policy and broadband economics. Luening began as a satellite hardware design engineer. He later funded, as a corporate investor, one of the first commercial LEO satellite systems. He spent two decades in the wireless telecommunications industry in strategic planning and as a leading thinker in mobile operator economics. This Expert Opinion is exclusive to Broadband Breakfast.

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