Monitoring, Enforcement Important as BEAD Gets Underway: Expert
Carol Mattey said states should include contractual provisions to claw back already paid funding in the event of nonperformance.
WASHINGTON, March 11, 2026 – As projects funded by the Commerce Department’s $42.45 billion broadband expansion program start to get underway, monitoring and oversight are going to be increasingly important, a broadband funding expert said Wednesday.
“I would be astonished if there weren’t defaults, just because every program has defaults,” said Carol Mattey, head of Mattey Consulting and former deputy bureau chief at the Federal Communications Commission.
She spoke about the Broadband Equity, Access, and Deployment program on a Fiber Broadband Association webinar Wednesday. Commerce’s National Telecommunications and Information Administration has approved all state and territory spending plans under the program, except for California, Illinois, and Oklahoma, and states are beginning the process of signing grant agreements with winning ISPs.
BEAD requires participants to submit performance tests annually to state broadband offices over the ten-year period of performance after networks are constructed, an effort to ensure providers are meeting the minimum required speeds of 100 megabits per second (Mbps) download and 20 Mbps upload.
Mattey said that would be important with respect to satellite ISPs, as about 20 percent of BEAD locations will get low-Earth orbit satellite. Ookla speed tests show SpaceX’s Starlink service, which dominates the market currently, providing a median speeds of just under 118 * 17 Mbps in the U.S., which doesn’t quite meet BEAD requirements yet, although the company is looking to launch more satellites and get other regulatory approvals that it says will improve its home broadband service.
If a company is paid its BEAD award but “then a year later they’re not meeting the performance standards, or two or three years later, what as a practical matter is the state going to do?” Mattey said. “Do they have contractual provisions in place that allow them to claw back the money that’s already been paid out? That’s a serious issue.”
BEAD rules allow for enforcement mechanisms including “imposition of additional award conditions, payment suspension, award suspension, grant termination, de-obligation/clawback of funds, and debarment of organizations and/or personnel,” according to the program’s notice of funding opportunity.
Some states like North Carolina produced draft grant agreements that included measures to claw back awarded funds proportional to the locations where minimum standards weren’t being met. States were also reportedly looking to make defaulting providers pay for replacement service to their locations.
That was a problem for SpaceX, which was able to submit much lower bids than terrestrial providers. The company asked states to agree to a contract rider earlier this year, which among other things included an agreement only to claw back already paid funding in the event of a default. NTIA ultimately said the rider was in conflict with its rules.
“Penalties to pay for replacement would be exceptionally unreasonable for a LEO provider like SpaceX that stands to receive approximately $500-$1500 on average in payment per [location],” the company wrote in a letter to state broadband offices. “Any other technology is many times more expensive per BSL, particularly in the remote areas awarded to SpaceX.”
But a pure clawback could limit states’ ability to secure alternative connectivity for those locations, former NTIA chief counsel Stephanie Weiner argued back in September, given how much more expensive terrestrial service would be.
Weiner also argued that in cases where providers agreed to serve locations through BEAD with no government assistance, a means of preventing those locations from being awarded to another provider, the state would have nothing to claw back in the event of a default.
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