Justice Scale

Over a quarter of states are expected to be able to have enough BEAD funding to get broadband to all their unserved and underserved areas and still have money left, according to Andrew Lipman, a partner with law firm Morgan, Lewis & Bockius, which has a specialty in telecom.

At the other end of the spectrum, some states are struggling to meet national goals of making broadband available to everyone and to deploy fiber to the maximum extent possible. In a letter to NTIA earlier this year, fixed wireless provider association WISPA noted several states – including Minnesota, New York and North Carolina — that have indicated they don’t expect to have enough BEAD funding to reach everyone.

Rules for the BEAD program call for funding to be allocated to the states based on the percentage of unserved locations in the state as a percentage of total unserved locations nationwide – with one exception.

As Lipman noted in an email exchange with Telecompetitor about BEAD program rules, “Every state, even Rhode Island and Delaware, which are both small and largely broadband served, receive a minimum $100 million.”

Although not mentioned by Lipman, I can think of at least two other factors that may have caused funding disparities:

1-Some states had a bit of windfall when the FCC established the Enhanced A-CAM program for small incumbent rural providers. That program, established after BEAD allocations were announced, increased the target speed for the rural providers and allocated additional funding to achieve the target speed. Participation in the program was optional but the response was strong.

The upshot is that states where rural providers accepted a lot of E-ACAM funding will have fewer unserved and underserved locations than they were expected to have when BEAD funding was announced.

2-States that participated in location and availability challenges in time to impact the BEAD allocations may have fared better in the allocation process than those states that did not participate in the challenge process.

Allocations were based on the second version of the FCC National Broadband Map based on the newest data collection methods. The second version of the map reflected the results of challenges that were made to the first version of the map – provided that those challenges were made by certain dates.

Not all states filed challenges in time, yet the second version of the map determined the number of served and unserved locations in each state, which in turn determined allocations.

Where Do We Go From Here?

Potentially states that fared best in the BEAD allocation process could aim to get fiber to more locations – something that Evan Feinman, BEAD director for NTIA, referenced on a recent webinar.

“Some states have a boatload of money and will require fiber broadband,” he said.

A close reading of the rules for the BEAD program suggests that states don’t have to deploy fiber broadband everywhere, however, even if the net result would be that the state would have some money left over.

Each state will be setting its own high-cost threshold, which will determine where providers must use fiber and where they can use alternative technologies such as fixed wireless. Theoretically a state that is flush with BEAD cash could opt to set that threshold at a high level. But setting it too high could create a public uproar, with people questioning why the government spent an outrageous amount to get fiber to a single farm.

Those states that don’t need all their BEAD funding to make broadband available to everyone will be able to use the funds for other purposes. Subject to NTIA approval, the states can use the money toward connectivity for anchor institutions or local governmental facilities or possibly for broadband adoption purposes, Lipman said.

Will those states that are flush with BEAD cash lean more towards using the funding for those purposes or for getting fiber to everyone? Can some states do both?

Telecompetitor will be watching closely in the coming months as the answers to these questions begin to come into focus.

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