States have 90 days to comply with revamped BEAD rules, including a ‘Benefit of the Bargain’ bidding round
The Trump administration has released its updated rules for the $42.5 billion Broadband Equity, Access and Deployment (BEAD) program, to mixed responses.
As part of issuing the new rules, the administration rescinded approval of the state broadband plans of Louisiana, Delaware and Nevada, which had been the furthest along in the approval process for the bipartisan BEAD program. While BEAD had originally been passed by Congress with a heavy preference for fiber deployments, NTIA has instituted a “technology neutral approach” and is demanding that states hold another round of bidding where all technology types can be considered—some of which will inevitably be cheaper than fiber.
The NTIA notice says that states and territories “must rescind all preliminary and provisional subaward selections and notify applicants that a further round of applications will be considered before final awards are made.” NTIA is calling the new round of applications the “Benefit of the Bargain” round.
U.S. Secretary of Commerce Howard Lutnick categorized the updated rules as “new direction for the BEAD program that will deliver high-speed internet access efficiently on a technology-neutral basis, and at the right price.”
Lutnik posted on X, formerly Twitter, complaining about the slow progress and high cost of BEAD projects and saying that the new rules fix those things: “Look at Alaska: Washington approved a $33 million grant (plus a required $11 million match) to run fiber to just 211 homes and five businesses. That equals over $204,000 per address and the work hasn’t even started. Fixed-wireless or satellite would have done the job faster and cheaper. We’re ending this nonsense. Every BEAD dollar will be deployed this year, but we will be technology-agnostic: fiber, fixed-wireless, and satellite.”
Among the other changes outlined in the new BEAD notice, the new rules:
-Remove wholesale access requirements.
-Allows data caps to be instituted on services provided via BEAD-funded networks.
-Eliminates development of “middle class affordability” plans for middle-income customers, calling those requirements “confusing, arbitrary [and] impossible to operationalize.”
-The new rules also remove some of the low-cost plan requirements. In order to gain approval for funding under the Biden administration, the states had each worked out their own pricing but had to justify it to NTIA. According to analysis by Jake Varn, associate manager of broadband access initiative at the Pew Charitable Trust, those prices ranged from less than $30 per month (which prompted AT&T to refuse to do BEAD business in New York State) to $110 per month in Alaska.
The new rules cut states and territories out of the pricing of services over BEAD-funded networks, with NTIA declaring that it “prohibits Eligible Entities [aka, states and territories] from explicitly or implicitly setting the … rate a subgrantee [aka, a service provider] must offer.” The new rules also say that existing low-cost plans can be used to meet the statutory requirements for BEAD low-cost plans.
-Adding a requirement to use an NTIA-developed environmental screen and permit tracking tool that is “designed to accelerate National Environmental Policy Act (NEPA) processing timelines by several months”.
Adam Cassady, who is acting assistant secretary of Commerce for communications and information and acting NTIA administrator, said: “Thanks to today’s reforms, the BEAD program can focus on what Congress intended: broadband deployment. Shelving the previous administration’s unnecessary burdens, and opening access to all technology types, connects more Americans to broadband more quickly, and at a lower cost to the American taxpayer.”
“The low-cost emphasis will certainly have an impact on which technologies are selected and deployed,” said Jeff Heynen, VP of broadband access research at Dell’Oro Group, in a research note. He added: “There will undoubtedly be a percentage of projects where fiber will be replaced by licensed or unlicensed fixed wireless, or even LEO satellite service.” The new BEAD rules also make it easier for LEO satellite services to be the default option for service under BEAD.
Heynen noted that in the early state plans, states already were pursuing a mix of technologies but fiber accounted for the vast majority of total proposed spending: between 70-90%. That percentage is likely to fall under the new rules, and Heynen expects to see broader use of 6 GHz-based Fixed Wireless Access as well as unlicensed mmWave spectrum.
David Zumwalt, president and CEO of WISPA, said that the new rules bring BEAD into line with the program’s original intent. “By prioritizing cost-effective, quickly deployable solutions that meet the IIJA’s baseline technical standards, the new Policy Notice eliminates the harmful delays—as well as the higher capital and operating costs—arising from BEAD’s prior positioning as a fiber-first program. It never needed to be, nor should it have been, that way,” Zumwalt said.
Not everyone, however, received the new rules well.
“Secretary Lutnick’s decision to ask states to reapply for funding will waste years of work and millions of dollars,” Senator Michael Bennett (D-Colo.) posted on X in response to the NTIA public notice.
“NTIA’s new BEAD rules are a betrayal of rural America. The program I helped create was meant to deliver real, high-speed broadband — not slow, unreliable satellite. These changes let big providers cut corners at the expense of our communities,” posted U.S. Representative James Clyburn, a Democrat from South Carolina’s 6th Congressional District, also on X.
Jessica Dine, a policy analyst at New America’s Open Technology Institute and Wireless Future, said in a statement emailed to RCR Wireless News: “NTIA claims it wants to streamline the BEAD program to more effectively close the digital divide. But the new guidance released today creates a confusing, last-minute mess of changes that don’t align with that mission. By forcing a rebidding process on an incredibly short timeline, the new policy notice is, in effect, undoing all of the states’ work on their bidding processes so far.
“Despite NTIA claiming to want a balanced mix of technologies funded by BEAD, the new guidance directs states to compare all applications on the basis of project cost alone,” Dine said, adding: “This process will likely lead to rushed outcomes that overwhelmingly favor tech with the lowest upfront costs. It largely fails to account for network quality, price for consumers, or even long-term maintenance costs.”
