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# Nearly One in Three Co-ops Turning Down BEAD Money, NRECA Says
- URL: https://broadbandbreakfast.com/nearly-one-in-three-co-ops-turning-down-bead-money-nreca-says/
- Published: 2026-09-21T20:10:06.000Z
- Updated: 2026-10-23T21:47:37.000Z
- Description: The group’s members said one provider’s U.S.-made fiber prices jumped 40 percent in August alone
- Author: Jake Neenan
- Tags: BEAD, NRECA, Howard Lutnick, Jim Matheson, David Brodian, #with-siderail, ACLP

WASHINGTON, Sept. 21, 2026 – Nearly one in three electric cooperatives to participate in a major broadband expansion program have pulled out, with even more considering withdrawing, according to their main industry group.

NRECA, which represents electric co-ops, said [in a letter](https://www.electric.coop/wp-content/uploads/2026/09/Matheson-Letter-to-Secretary-Lutnick-on-BEAD-Issues-09162026.pdf?ref=broadbandbreakfast.com) to Commerce Secretary **Howard Lutnick** last week that 63 cooperatives had won funding in 27 states under the $42.45 billion Broadband Equity, Access, and Deployment program.

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Of those, 20 have dropped out, he said, and “many others are considering withdrawal” because of riding equipment costs and program rules. 

It’s not clear how much money co-ops won under the program in total, or how many locations they’re set to serve.

Co-ops [strongly dislike](https://broadbandbreakfast.com/fba-benton-pleased-by-new-bead-round-electric-co-ops-want-course-correction/) a Trump administration rule requiring federal pole attachment rules to apply to some pole owners’ footprints in states where they win BEAD money. In addition to deploying broadband, electric co-ops own utility poles that house power and communications gear.

The BEAD pole rule applied to pole owners that aren’t regulated by an existing attachment scheme that outlines things like attachment fees and timelines. Federal rules don’t cover co-ops, and neither do many state laws.

“As cooperatives are statutorily exempt from FCC pole regulations under Section 224 of the Communications Act, the application of these rules and timelines across their distribution footprint has created confusion and increased participation costs,” NRECA CEO **Jim Matheson** said in the group’s letter.

Placing FCC rate caps and other rules on co-ops “unfairly shifts a portion of high rural broadband deployment costs from BEAD awardees to cooperative electric ratepayers,” he added.

NRECA and individual cooperatives have long opposed the rule, which came as an unpleasant surprise to them. The rule [was instituted](https://broadbandbreakfast.com/little-talk-of-bead-at-lutnicks-house-hearing/) in January, after providers had already been tentatively awarded BEAD funding.

During a Federal Communications Bar Association webinar in June, a top attorney at the agency administering BEAD [said the rule](https://broadbandbreakfast.com/ntia-defends-bead-pole-rules/) was aimed at preserving a level playing field for BEAD winners.

**David Brodian**, chief counsel for the National Telecommunications and Information Administration, acknowledged there was “definitely some initial resistance to it,” but said NTIA was also trying to avoid a situation where a co-op that won BEAD funding would charge other participants more than its own ISP subsidiary for pole access.

“We didn’t want to see any anticompetitive behavior in the program — where somebody was trying to get on BEAD poles and they couldn’t because the provider is also in the BEAD program,” he said.

A May analysis from New York Law School found about 42 percent of the fiber miles set to be deployed with BEAD funding would be aerial, and about 40 percent of those aerial fiber miles would be hung on cooperative-owned poles.

NRECA had other requests, including allowing BEAD winners to access more money in the face of skyrocketing equipment costs — Matheson said that members saw an unnamed provider’s U.S.-made fiber prices jump 40 percent in August alone. 

BEAD requires fiber and other components to be made in America, meaning rural ISPs are competing for the same supply as tech giants building out as many data centers as they can. At least one state has asked NTIA to waive the rule in the face of rising costs.

NRECA said the agency should raise its limit on non-compliant material. Up to 5 percent of a project's material cost, or up to $1 million, can be spent on gear that breaks BEAD’s domestic manufacturing rules.

The percentage limit should be raised and the $1 million cap should be axed, Matheson said, to give providers more leeway to get projects done.