As the new presidential administration ponders potential changes to the BEAD rural broadband funding program, some stakeholders recommend relaxing current rules that favor fiber broadband technology and shifting funding toward lower-cost options such as low-earth orbit (LEO) satellite broadband. That idea raises some important questions, however — including how it would impact which locations are eligible for BEAD funding.
With the news today that President Trump was “pausing” federal grant funding pending potential changes, the most complete recommendations for changes we’ve seen to date come from Jeff Landry, governor of Louisiana, which was the first state to award BEAD funding.
Landry’s recommendations came in a letter to Howard Lutnick, acting commerce secretary, in which Landry offered to “serve as a thought partner and sounding board as you make reforms” to BEAD.
BEAD Technology Rules: Redefining “Reliable” Technology
One of Landry’s key recommendations is to reclassify fixed wireless using unlicensed spectrum and LEO broadband as “reliable” technologies. Currently those technologies are classified as “alternative” technologies to be used only to serve what the BEAD program defines as “extremely high-cost locations.”
Currently, “reliable” technologies include fiber broadband, cable modems, fixed wireless using licensed spectrum, and DSL. Importantly, locations where such services are already available were not eligible for BEAD funding, provided that the services met minimum speed requirements.
Landry’s letter didn’t address whether areas already served by unlicensed fixed wireless or LEO satellites should be ineligible for BEAD. But if those areas were to be excluded, states would have to create a new list of eligible areas, which the federal government would have to approve, causing program delays.
When Telecompetitor asked Veneeth Iyengar, Louisiana’s executive broadband director, about this today, he said he hoped that would not be required.
On the other hand, if the federal government is serious about spending BEAD dollars efficiently, and if unlicensed fixed wireless is deemed “reliable,” shouldn’t we exclude locations that already have unlicensed fixed wireless available to them at the required speeds?
A May 2023 study from Vantage Point Solutions estimated that there were 1.4 million locations where the only high-speed broadband option was unlicensed fixed wireless and that therefore were eligible for BEAD. Under the proposed rules, such locations potentially shouldn’t be eligible.
Larry Thompson, Vantage Point Solutions CEO, told Telecompetitor today that he doesn’t think the 1.4 million number has declined much since it was calculated.
He added that, if those locations were made ineligible for BEAD, they might not see any other broadband technologies deployed there for years to come.
BEAD Technology Rules: Fixed Wireless
As for LEO broadband, telecom cost expert Jim Stegeman — president and CEO of CostQuest — told Telecompetitor today that SpaceX claims to offer service to 99.7% of all U.S. locations, based on the FCC’s National Broadband Map.
The logical implication, if LEO satellites are deemed “reliable,” is that almost everyone in the U.S. already may have high-speed broadband available to them, provided that those services meet minimum speed requirements. The data that Stegeman found did not summarize available SpaceX speeds, but checking a few random locations showed all speeds to exceed the 100/20 Mbps minimum.
Of course, LEO satellites have limited capacity and might not be able to serve every location in an area — a factor that parties such as NTIA may have contemplated as they considered the qualities for defining a reliable broadband offering.
Another concern may have been that LEO satellites have a much shorter lifespan than fiber broadband. Telecompetitor has seen estimates in the range of five years.
In comparison, Stegeman estimates the life of fiber at 25 years.
As for unlicensed fixed wireless operating in unlicensed spectrum, NTIA was concerned that the spectrum could become crowded over time, thereby degrading performance.
An Ex Ante Extremely High-Cost Threshold
Landry’s letter also recommends that states establish an “ex ante” extremely high-cost threshold before they begin accepting BEAD applications.
Louisiana didn’t do this, although it did cap the funding that a provider could request per location at two times an estimated reserve price. The reserve price was based on an estimate of what it would cost to deploy fiber.
The state ultimately didn’t really need to calculate an extremely high-cost threshold because it had enough money to award funding for every location for which it received an application. Locations that didn’t receive an application will go to an unnamed LEO satellite provider.
According to Iyengar, Landry’s recommendation about the “ex ante” threshold is aimed at “giving states the flexibility on how to define the technology mix.”
While Louisiana had ample funding to get fiber to over 90% of eligible locations, others may not be so fortunate and may prefer to limit how many locations can get fiber in order to make sure that all locations get some type of high-speed service.
“Let’s toggle it up and down so everyone gets something,” he said.
Numerous other states already have opted not to establish an extremely high-cost threshold until after applications are received, however, and some of these states already have begun accepting applications under those guidelines.
What impact changes to the BEAD guidelines would have on those states is unclear. Would they be required to halt the application process and restart it under new guidelines? Would those already accepting applications be grandfathered in? Or would these just be considered best practices and not mandatory?Telecompetitor will be watching these issues closely over the coming weeks and months.
