Tim Stelzig: A New Approach to Connecting All Americans to the Internet

This is the third in a series of four posts that attempt to provide context for NTIA’s BEAD program, the nation’s leading effort to once and for all make sure every American has access to fast, affordable, and reliable internet service. If you haven’t yet read the first two posts, I encourage you to do so now as they provide essential context for the below.

• Part 1: Explaining BEAD, Broadband Abundance?
• Part 2: Explaining BEAD, Trying to Bridge the Digital Divide

As a brief recap, the nation has been working for decades to achieve universal access to broadband. The last post explained why, no matter how hard we have worked to achieve this goal, the finish line always seems just beyond reach. We have been chipping away at the problem incrementally, investing and reinvesting in the same communities, while the hardest-to-reach places remain perpetually left behind.

That’s a core issue Congress was wrestling with when it was debating how to design the BEAD program. Part of the solution is the once-in-a-generation level of funding Congress provided in recent years—$42.45 billion in the BEAD program on top of the additional billions of broadband deployment funding provided to USDA, Treasury, and the FCC. But having enough money isn’t sufficient for success. Smart program design also is essential to making sure the money is spent in an effective and efficient way.

One possibility: Patterning BEAD on USDA's ReConnect?

The most straightforward design Congress might have chosen for the BEAD program would have been to pattern it on USDA’s ReConnect broadband funding program. Congress created ReConnect as a pilot program in the Consolidated Appropriations Act of 2018 and RUS has implemented it in a reasonably streamlined fashion.

Essentially, ReConnect is a multi-round program in which private entities compete for grant and loan funding pursuant to a scoring system federal regulators periodically tweak and announce in advance of each funding round. If Congress had followed this federal agency competitive bidding model—even if it situated the program inside NTIA rather than RUS for committee jurisdictional reasons—it would have been able to award most of the $42.45 billion in BEAD funding within a single year. This rush of investment would have created supply chain and other challenges, but overall, I believe this approach would have built on a successfully tested model and could have delivered broadband networks quickly.

That is not the route Congress chose. Instead, Congress structured the BEAD program as a state and territory broadband grant program. Specifically, NTIA awards federal BEAD grants to states and territories under a statutory formula based on need.

Each state needs to administer its own broadband program

Each state and territory then must set up and administer its own broadband infrastructure grant program using the statutory framework to distribute the money to the internet service providers that will be building the networks. Importantly, Congress directed that each state and territory must ensure every broadband serviceable location in its jurisdiction gets connectivity as a condition of receiving the bulk of BEAD funding.

This statutory mandate to finish the job is a conceptual break with the incremental approach of perpetually moving the needle but never quite getting there the nation has used for decades when funding broadband infrastructure.

These two aspects of the BEAD program’s structure are related. The mandate to connect every location will, in almost every state and territory, involve hard policy choices about priorities. The cost curve for deploying broadband infrastructure has a long tail. It can be enormously expensive to serve the hardest-to-reach locations with fiber and other terrestrial broadband technologies. Because all funding is finite, this cost structure requires compromises on what mix of technologies will best complete the job in different parts of the country. As will be discussed more in the next post, there is no single right answer to that issue.

Hard choices are primarily in the hands of states

Structuring the BEAD program as a state and territory grant program rather than a direct federal funding program more like ReConnect puts those hard policy choices primarily in the hands of states and territories, rather than the federal government. One can easily imagine this structure appealing to Republican legislators who typically are more comfortable with state control than federal control in this type of context.

Also, this structure would result in slower deployment so ribbon cuttings would occur after the November 2024 election, an obvious benefit for Republicans. (Timing victories is a legitimate political goal so in no way do I intend that observation as a criticism.) In addition, the broadband deployment challenges in Connecticut, Louisiana, Alaska, Wyoming, and the Northern Marianas Islands (etc.) are highly varied. Therefore, giving states and territories flexibility to adopt a tailored approach seems likely to result in better broadband deployment outcomes than a one-size-fits-all federal mandate, regardless of one’s political ideology.

The statutory structure of the BEAD program is neither the most direct nor quickest route to getting shovels in the ground. That undeniably has costs. But politics is about compromise among competing policy goals, and timeliness and program simplicity are just two goals among many. Whether one agrees with this program design, the BEAD program is the product of reasonable policy choices Congress made through bipartisan compromise and consensus, whatever the details of each supporting legislator’s actual motivations.

One major challenge of structuring BEAD in this way, however, is that many states and territories had never been involved in broadband infrastructure grant funding and thus in 2021 and 2022 lacked the experience required to achieve good outcomes. Many did not even have an office nominally charged with such expertise. The fundamental structure of the BEAD program thus necessitated giving states and territories time to establish such offices, irrespective of other timing goals. Establishing such an office in states and territories that did not already have one generally required prior state legislative or executive action, and in most cases also required state funding notwithstanding that the Infrastructure Investment and Jobs Act allocated some of the $42.45 billion as initial planning funds.

An additional reason for the BEAD program’s multi-year timeline is that certain of BEAD’s procedural steps (e.g., the “challenge process”) stem from industry insistence that grants not be used to overbuild their existing infrastructure. The federal government has made that mistake in the past. There was a time when federal broadband grant programs were subsidizing multiple competitors in the same market, markets that barely had sufficient retail demand to sustain a single provider.

That left lasting scars on industry psyche. Today, most federal regulators agree with industry that taxpayer money should not be used to undermine the business case of entities that risked private capital to make infrastructure investments that benefit the American people. While that seems so obvious today, in the years shortly after the Telecommunications Act of 1996, the ambition to open markets through regulated competition sometimes spilled beyond statutory requirements and overrode common sense.

Thus, the BEAD program needed to wait for the FCC to finish mapping all the broadband serviceable locations in the United States and which among those locations already had adequate broadband service before the BEAD program could fund new broadband infrastructure. More than that though, NTIA was not even able to set top-line budgets for each state and territory until the FCC’s map was completed. The allocation methodology Congress adopted in the statute provided more grant funding to states and territories where the need was greatest, something that the statute required be determined by reference to the FCC’s map.

For technical reasons beyond the level of detail in this series of posts, the mapping effort is significantly more difficult than most would expect and thus took longer than many expected. In addition, the FCC’s map was delayed by a vendor protest of the FCC’s mapping contract that needed to be resolved by the reviewing court before the FCC could proceed.

As a result, even such basic information needed to set participant expectations as the total amount of funding that would be available in each state and territory was not available until June 26, 2023, the month following the FCC’s publication of the map. Plenty of other program work was occurring in parallel during this time. But states and territories were not in a position to begin working on the details of their broadband grant program rules, such as defining the geographic areas providers would bid to serve, prior to June 2023.

This isn’t the place to describe every aspect of the BEAD program or how its procedures are designed to achieve good results for the American people within the framework Congress established. The important takeaway is that the timeline for BEAD grants flows directly from the fundamental program structure Congress selected. Congress made that choice deliberately, trying in a bipartisan way to solve longstanding problems as it attempted to once and for all close the digital divide.

Tim Stelzig is a former Senior Policy Advisor and Regional Director of NTIA's BEAD program. This piece was first published on his personal Substack on May 16, 2025, and is republished with permission.

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