Okay, now comes the hard part. The communications ecosystem has been working feverishly on the Broadband Equity, Access, and Deployment (BEAD) Program since it was formed under the the Infrastructure Investment and Jobs Act in 2021. The first steps towards rolling out the ambitious $42.45 billion project now are at hand.
Beginning the actual work is a big milestone. Announcements are being made and receptions held. Today, Vistabeam will host a media event in Gering, Nebraska attended by governor Jim Pillen and Arielle Roth, who heads up the National Telecommunications and Information Administration (NTIA).
The invitation said that the event will celebrate the Keith County connection that the company claims is the first direct connection funded by the BEAD Program.
Two weeks earlier, on May 1, Nextlink Internet said it activated a BEAD-funded tower in Bienville Parish, Louisiana that will bring services to 104 locations in Bossier Parish.
Challenges on the BEAD horizon as deployment begins
Rolling out a mammoth project like BEAD will be rife with problems and challenges. Many issues are unknown at this point. But as the project kicks off, two issues are already looming: BEAD contracts and pole attachments.
The subgrant agreement challenge: This week, the NTIA instructed grant winners not to sign subgrant agreements that modify or omit language related to permitting and prohibition of utility-style rate regulation They also are to report states that try to make such changes. If made, the guidance said, awards and the subgrant contract would be in noncompliance.
New Street Research policy advisor Blair Levin pointed out in a research paper yesterday that though the NTIA released the guidance, it suggested that grantees seek legal advice elsewhere. This could be a recipe for confusion and delay.
It also could create opportunities for SpaceX’s low Earth orbit (LEO) service Starlink, which can deploy quickly and gain customers while states, the NTIA, grantees, and subgrantees hash out what may be litigious and time-consuming issues.
“The new NTIA guidance appears to be designed to assist carriers, but we are dubious that it will have a material impact on their economics,” Levin wrote. “To the extent, however, that the meaning and enforcement of the NTIA guidelines creates delays in the deployment of networks that compete with Starlink’s existing footprint, that is a clear and material benefit to Starlink.”
The pole attachment challenge: Pole attachments also will be a big deal. A study written by BroadbandExpanded, which is a project of New York Law School’s Advanced Communications Law and Policy Institute (ACLP), says that BEAD deployment will use approximately 2,954,013 poles owned by utilities. BEAD-related fiber will cross 2,053 electric utility service territories with about 188,287 route-miles of aerial fiber. About 40% of all BEAD aerial fiber will cross electric cooperative territories.
These poles are governed by attachment rules that are fragmented, contentious, and administered by different entities. The ACLP study says that it is common for broadband service providers to encounter higher-than-expected pole costs, including cases in which pole owners attempt to illegally shift curing of pre-existing violations to new attachers. This type of activity can cause delays and hurt projects’ financial feasibility.
“BEAD will touch millions of poles that are not regulated by the FCC, where there are fewer guardrails in place to provide predictability and consistency in how pole-related costs are set,” said the paper, which was written by ACLP Senior Fellow Alex Karras and Director Michael Santorelli.
“For example, one study found that the attachment rates for pole owners subject to regulation (IOUs and private companies) were significantly lower than those exempt from regulation, such as municipalities, cooperatives, and public utilities. BEAD recipients may encounter higher-than-expected pole fees from these entities, which could drive up costs and trigger delays or defaults.”
Indeed, an ongoing dustup between Comcast and the Appalachian Power Company (APCo) may be a sign of things to come. The FCC found that APCo’s policy of demanding communications providers bear the full cost of some pole replacements caused by prior users’ violations is a violation of FCC rules and the Communications Act.
Comcast said recently that APCo has not yet complied with the order and that it has filed a request with the FCC’s Rapid Broadband Assessment Team to convene a status conference with the parties. The time and money needed to work through such administrative and legal conflicts across a vast universe of poles suggests that a Herculean effort will be necessary to keep projects on track and within budgets.
Establishing the BEAD Program and reaching the milestone of the first deployments was a monumental task in which many people can take pride. However, the true size of the program and the challenges it presents may only become apparent when the industry ecosystem gets down to the real-world job of building it.
