States Could Still Use Statute to Favor Fiber for BEAD: Experts
The 2021 infrastructure law defines priority projects as those able to easily scale speeds over time.
WASHINGTON, June 24, 2025 – Updated rules for the $42.45 billion Broadband Equity, Access, and Deployment program make it easier for non-fiber applicants to compete for funding. But because of the way the law standing up the program was written, experts say state broadband offices’ final spending plans might end up being similar to what they would have been under the old rules.
“The provisions may have created openings for the states to maintain more of their original plans than we initially thought,” Blair Levin, policy advisor at New Street Research and former FCC chief of staff, wrote in an investor note Monday.
The Infrastructure Act defines priority projects – those that get first dibs on a given area – must “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,” in addition to meeting minimum speed and latency requirements.
FROM SPEEDING BEAD SUMMIT
Panel 1: How Are States Thinking About Reasonable Costs Now?
Panel 2: Finding the State Versus Federal Balance in BEAD
Panel 3: Reacting to the New BEAD NOFO Guidance
Panel 4: Building, Maintaining and Adopting Digital Workforce Skills
The Biden NTIA had determined that applied only to fiber, meaning fiber projects would be considered first for any given area and that states could only look elsewhere if no qualifying fiber bids came in or fiber would be extremely expensive.
The Trump administration’s new rules, handed down June 6, scrap the determination that only fiber could be priority, instead allowing applicants using any technology to ask to be considered with priority in a mandatory additional bidding round. States will effectively determine priority on an application-by-application basis, and the priority projects will then compete largely on cost, where fiber is at a disadvantage.
But even though fixed wireless and satellite providers can ask for the designation, it’s possible that states could use the scaling requirement to say many non-fiber applicants don’t qualify as priority projects on the merits, Levin wrote.
“We think there is a critical mass of states considering adopting the approach of using the scale argument to favor fiber.,” he wrote. “The big question is how the Secretary will react if states, consistent with the rules they set out, provide plans that do not provide the outcomes the Secretary wants.”
The NTIA did specify in its policy notice that it “reserves the right to reverse an Eligible Entity’s determination that a project does or does not meet the standard for a Priority Broadband Project if such determination is unreasonable.”
So the outcome may boil down to how willing Commerce is to reject states’ determinations, and how many choose to deny priority to many non-fiber applicants. State broadband officers have generally said they want to deploy as much fiber as possible while still connecting everyone, viewing it as a more permanent option.
NTCA, which represents rural fiber ISPs, urged states earlier this month to rigorously evaluate projects and grant priority sparingly.
Carol Mattey, a broadband consultant and former FCC deputy bureau chief, said last week that the new rules funneling money to satellite wasn’t a foregone conclusion. She also said states had room to be rigorous in evaluating whether a project met the priority standard.
“Many seem to assume that the decision will steer most of the BEAD funding to Elon Musk’s Starlink satellite service. I’m not convinced that outcome is inevitable,” she wrote in a June 17 blog post.
Less than 18% of Starlink customers consistently experience 100 * 20 Mbps
Mattey pointed to a recent Ookla report that found less than 18 percent of Starlink customers consistently experience 100 * 20 megabits per second service, the minimum speeds required by BEAD, and an OpenVault report showing business data consumption increasing rapidly. Meeting business needs is part of the statutory priority project definition.
That all should lead states to ask satellite providers for detailed plans for scaling up service, she wrote. Aside from Starlink, which dominates the market, the other low-earth orbit satellite option is Amazon’s Kuiper Systems, which has yet to offer service but launched an additional batch of satellites Monday.
A significant amount of money going to satellite would likely require one of the two to bid in many states. But since the new bidding rounds are happening much closer to each other as states hustle to meet a 90-day deadline, states could ask applicants where else they’re bidding and how they plan to handle a significant increase in customers if there would be one.
“With Starlink already capacity-constrained in certain areas of the country, with waitlists and congestion charges, that’s a legitimate inquiry for state broadband offices,” Mattey wrote. “Satellite providers should similarly be required to submit detailed plans with launch dates for additional satellites and how they would augment existing terrestrial assets sufficient to support a significantly larger customer base.”
