Tim Stelzig: Creating a Lasting Solution for BEAD

This is the final post in a four-part series that attempts to provide context for NTIA’s BEAD program, the nation’s leading broadband grant funding program. If you haven’t yet read the other three posts, I encourage you to do so now as they contain information necessary to fully understanding this post.

• Part 1: Explaining BEAD, Broadband Abundance?
• Part 2: Explaining BEAD, Trying to Bridge the Digital Divide
• Part 3: A New Approach to Connecting All Americans to the Internet

Unfortunately, this post ends with a warning about changes the Trump Administration is considering making to the BEAD program. If implemented, these changes would deprive many rural Americans of the benefit of the bargain Congress struck when it enacted the Bipartisan Infrastructure Law.

As explained in prior posts, Congress created the BEAD program to once and for all close the digital divide. For decades, the hardest-to-reach rural communities in America kept being passed over as federal investment in broadband infrastructure flowed to places that were easier to serve. Three aspects of the BEAD program are designed to bridge this divide in a more permanent way.

First, Congress provided enough money all at once to finish the task. Second, Congress involved states and territories in the process and conditioned their receipt of the money on actually achieving the goal of universal access to broadband in each jurisdiction. Third, Congress directed states and territories to prioritize future proof technology, as explained below. The statutory focus on creating a lasting solution is necessary to overcome the situation described in the second post in this series, namely how exponential growth in the demand for faster speeds in just a few short years can make technologies that work well today insufficient to serve customers’ growing needs.

Bipartisan infrastructure law prioritizes technologies that can scale 'easily scale speeds over time'

The BEAD statute prioritizes taxpayer investment in technologies that can “easily scale speeds over time.” The prior Administration interpreted—correctly in my view—this preference for future-proof technologies to be a statutory priority for investment in end-to-end fiber connections.

While every connection technology is an important part of the mix necessary to achieve universal access to broadband, fiber unquestionably is the gold standard in that it lasts for decades, is reliable under challenging weather conditions, and can be upgraded at low cost by swapping out the electronics at either end of the fiber run. This makes fiber relatively inexpensive for providers as they make network upgrades over time, including increasing customer speeds as broadband demand keeps rising exponentially. No other technology has these characteristics to the same degree.

In accord with Congress’s direction, NTIA’s BEAD program therefore gave priority to end-to-end fiber technologies. In practice, what this means is that if two providers submit a bid to build a broadband network in an area, if one of them proposes to use fiber and the other does not, the fiber bid will win even if it is more expensive or doesn’t score as highly in other respects.

Only up to a point though. NTIA required each state and territory to set a dollar limit per location above which fiber would not receive this technology preference. The program’s goal was giving the American people a broadband solution that would keep up with demand for decades at an affordable rate, while recognizing that in some places fiber just isn’t cost-effective and other technologies are a better option.

Implicit in this structure is a recognition that states and territories are better positioned than the federal government to know what is an appropriate cost threshold for their citizens. Deploying broadband networks in Alaska, for example, where rural villages can be dozens or even hundreds of miles from the nearest fiber connection, has cost considerations that simply are not present in Connecticut or Louisiana. Every state and territory has its own unique deployment challenges, which is why broadband service does not already exist ubiquitously anywhere. That is the point of empowering states and territories to make these decisions for themselves, rather than at the dictate of regulators in Washington, D.C.

States and territories are incentivized to get it right

States and territories have strong intrinsic incentives to get this right. As supplemental insurance states and territories would set an appropriate cost threshold, the BEAD program also relies on market-type incentives. Specifically, states and territories are allowed under the BEAD program’s existing rules to use any funds not spent on deploying broadband infrastructure on other eligible broadband-related purposes.

These eligible purposes can include things like broadband-related job training programs; money to support remote learning or telemedicine; computer science or cybersecurity education programs; or other activities that invest in broadband-related activities that can build local capacity and help that state or territory compete using 21^st Century technologies. That is an enticing carrot to ensure program efficiency for any Governor who is struggling to squeeze more value out of their budget, which is to say every Governor.

Under the current program structure, Governors therefore have strong incentive not to invest BEAD funds in fiber beyond a level that is effective and efficient for that state or territory. Doing so would only deprive the jurisdiction of funding it could use for other valuable purposes.

This fiber preference is a critical part of program success. As explained above, the demand for broadband access is not static. Consumers continue to demand faster and faster service to power quickly developing technologies, most of which depend on robust connectivity. With the likely incorporation of AI technologies into more products, coming adoption of virtual and augmented reality entertainment and utilities, self-driving cars, individual AI-powered agents that will provide tailored education and other services, we should expect the demand for faster broadband service to continue growing exponentially for the foreseeable future.

None of this is to disparage other connection technologies. As the BEAD program correctly recognizes, all connection technologies that can meet minimum performance requirements must be part of the solution to achieve the difficult task of giving every American the option of internet access. That is why the BEAD program makes all such technologies eligible for funding, including fixed wireless and satellite technologies. There is a right tool for every job and these connection technologies have an important place in our nation’s toolkit. For example, some have estimated that under the current program structure, satellite technologies including those provided by Elon Musk likely will receive approximately $4 billion in BEAD grant funding.

Fixed wireless or satellite technologies will be more expensive to upgrade

Nevertheless, the reality is locations the BEAD program connects using fixed wireless or satellite technologies will be more expensive to upgrade over time. This means consumers served with those technologies likely either will find their internet speeds not keeping pace with current technology needs, or getting more expensive, or both, as bandwidth needs keep doubling every few years.

Significantly upgrading a satellite network, for example, requires billions of dollars in additional investment as entire fleets of new satellites need to be built and launched into orbit. Those costs must be passed on, most likely as higher prices to consumers, although it can also mean network upgrades are spread out over a longer period of time and service quality suffers in the interim.

All this to say, if America tries to save a little money now by underinvesting in fiber technologies, rural America once again will be left behind. A service that is good enough today is not going to power the consumer and business needs in coming years. Smart policy therefore requires factoring in the cost of network upgrades.

It is imperative America invest in the broadband infrastructure that will give all areas of the country the best chance to compete and succeed in coming generations. Investing in ubiquitous connectivity strengthens our shared future, including by building the digital platforms rural communities need to retain local talent, grow new businesses, and attract new skilled workers.

My hope is that BEAD funding over time will slow and potentially reverse the out-migration harming the economic and social health of rural communities as workforce contributions become less tied to geography, allowing wealth that today is concentrated in urban markets to flow more equally to all corners of America.

As currently structured, the BEAD program puts the choice of what is the right technology mix and how best to prepare for this future in the hands of states and territories, which is exactly what Congress intended in designing BEAD the way it did.

Unfortunately, the Trump Administration appears to be on the cusp of taking that choice out of the hands of states and territories. On April 22, 2025, NTIA issued a program waiver giving states and territories an additional 90 days to implement forthcoming changes to the BEAD program, including a “more technology-neutral approach.” More recent reporting suggests program guidance will not be released until June or July.

Regardless of timing, Secretary Lutnick is widely expected to stray from the current approach of using market forces to incentivize states and territories to determine the right technology mix most appropriate for their jurisdiction. The fear is he will adopt a one-size-fits-all federal mandate and direct states and territories to cut corners using a “short-term bang for the buck” approach, basically the same approach that has failed for decades to deliver fast, reliable, and affordable internet service in the hardest-to-reach parts of the country. That would be a tragic mistake.

The Bipartisan Infrastructure Law provided once-in-a-generation funding, and we are very unlikely this level of funding will come around again in our lifetimes.

To the extent the new Administration seeks to cut unnecessary red tape, remove unnecessary rules and mandates, and improve efficiency, more power to them. In that effort they should have everyone’s unwavering support. But to the extent the forthcoming changes have the effect of selling out the American people to steer an excess of money toward Elon Musk’s satellite company, it will be a travesty mostly rural red states will regret for decades.

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 18, 2025, and is republished with permission.

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