NTIA Cracks Down on BEAD Proposals Built on ‘Hypothetical’ Funding

WASHINGTON, Nov. 18, 2025 – The Commerce Department’s top broadband official signaled Tuesday that it was cracking down on applicants relying on “speculative” funding sources under a federal broadband program, calling it a major predictor of future defaults.

Speaking at a policy summit hosted by NTCA – The Rural Broadband Association, National Telecommunications and Information Administration administrator Arielle Roth said NTIA has seen applicants whose business cases hinge on hypothetical future grants.

With the Broadband Equity, Access and Deployment program “likely to be the last federal broadband program for some time,” Roth said NTIA must aggressively mitigate default risks and was preparing to issue new guidance, even as the agency approved 18 states’ final proposals.

Roth used the appearance to clarify a message she delivered in October, when she said that BEAD subgrantees would have to forgo federal operating subsidies for BEAD builds over the entire four-year performance period.

That position drew immediate concern among NTCA members, said NTCA Executive Vice President Mike Romano, many of whom rely on Universal Service Fund support, including some in the same territories where they applied for BEAD grants.

“A lot of folks in this room get USF funding in some portions of the areas they serve,” Romano said. “In some of those areas they may have also applied for BEAD funding, because of the way USF and BEAD rules interact.”

NTIA clarified days later that the prohibition on operational subsidies applied “only to BEAD-funded projects” and would not affect existing subsidies in non-BEAD areas to which a provider was already entitled.

Roth offered additional clarity Tuesday. 

“We all know how challenging this area is. We don’t want to be in a situation where providers are relying on the hypothetical possibility of Congress passing a law or the FCC creating a new fund that doesn’t exist today, because that would be, in our view, overly risky and speculative.”

“Again, we've focused on speculative, hypothetical future funding that has not already been committed,” Roth said. 

She stressed that this does not require providers to choose between BEAD and support they already receive. 

“For example, if a provider already has a commitment under ACAM to serve an area and then has BEAD locations within that area, that’s not a hypothetical commitment,” Roth said. “We’re not concerned about that kind of reliance. That’s a reasonable reliance by that provider.”

Roth also emphasized that NTIA’s scrutiny does not extend to federal programs outside the BEAD service area. 

“If a provider is getting ReConnect funding to serve an area outside of its BEAD footprint, that wouldn’t be impacted by the certification we’re requiring,” she said. “We’re really focused on situations where a provider is banking on federal support that is truly hypothetical and would not be reasonable to rely on, because that creates a much higher risk of default.”

“We want to make sure that we're not exposing the program to unnecessary risks,” Roth said, adding that NTIA would be releasing an FAQs document on the issue. 

Roth said NTIA’s goal at this point in the program was to reduce defaults from every angle.

“We're doing this in different ways,” she said. “We’re pursuing permitting efforts to ensure delays don’t undermine timely broadband deployment, we’re looking at regulatory burdens that can slow or complicate builds, and, finally, it’s our duty as stewards of this funding to make sure the providers making commitments under the BEAD program are actually able to deliver.”