As states turn in their final proposals for the Broadband Equity, Access, and Deployment Program (BEAD) ahead of tomorrow’s September 4th deadline, several states, including Louisiana and Virginia, are moving forward with plans that prioritize expensive fiber optic cables.
But the states’ fiber preference is likely not due to ill-will towards less-expensive connectivity options, or a dogged commitment to the gold-standard tech, but a response to messy rule changes. The National Telecommunications and Information Administration (NTIA) issued guidance in June asking for cost-efficiency through tech-neutrality, but revoked approval for non-deployment projects, such as internet affordability and adoption programs.
Leaning more on alternative deployment methods would have saved money to put towards these worthwhile programs. However, blocking non-deployment projects undermines the cost-efficiency goal because now states must either spend their whole budgets on expensive infrastructure or let their leftovers go to waste. The result is that states choose the former instead of saving money for affordability and adoption programs. The NTIA should reinstate approval for non-deployment uses and give states one more month to reconsider their final proposals.
Encouraging states to prioritize a technology-neutral approach was the right choice. BEAD originally prioritized “projects designed to provide fiber connectivity,” but in the evolving landscape of internet connectivity, many methods can easily deliver the 100 Mbps download speed and 20 Mbps upload speed that BEAD requires, including Wireless, Cable, and low-earth-orbit satellites (LEO).
Research shows fiber-optic cables are the gold standard as they provide the fastest speeds most reliably—but they are expensive to build and sometimes ill-suited for cost-effective buildout strategies. BEAD’s initial preference for fiber may help explain why a historic $42 billion in taxpayer money was allocated to the program in the first place. But the NTIA’s June guidance removed the fiber preference and called on states to equally consider all technologies. That opened the door for more cost-effective alternatives to help bring that massive price tag down. This was a good change insofar as it saves taxpayer dollars—money with even more effective uses if the NTIA allowed it.
According to a recent letter from Congress, the program deliberately provides flexibility “to address the full scope of the digital divide, including affordability, accessibility, adoption, and digital readiness.” Indeed, solely focusing on infrastructure risks spending billions of taxpayer dollars and barely moving the needle.
According to a 2024 survey from the NTIA, only 2.8 percent of offline Americans remain offline due to a lack of accessibility in their area. Meanwhile, 18.6 percent explained they cannot afford service, and 55 percent said they simply didn’t understand the need for getting connected. That means about 73.6 percent of offline Americans are already within reach of existing infrastructure and are better helped by the non-deployment programs Congress authorized.
By considering cost-effective alternatives to fiber, states could free up time and money to spend on consumer-facing affordability and adoption solutions. Unfortunately, the same June guidance that opened the path for savings through tech-neutrality also revoked approval for all non-deployment-related uses of BEAD funding. The NTIA said it would “issue updated guidance in the future,” but has so far left the fate of leftover funding ambiguous. Texas announced that, without being able to put the unused funds to good use, it may return them to the US Treasury, but there has been no official mandate to claw back previously allocated funds.
A tech-neutral approach without non-deployment options incentivizes waste. Without NTIA approval, any tech-neutrality savings not spent on deploying internet infrastructure will have no clear future. So instead of letting their funding wait in bureaucratic purgatory, states like Louisiana and Virginia have chosen action over ambiguity, opting to go with fiber-heavy plans after all and put their whole budgets toward deployment.
Had NTIA called for unused funds to be returned to the Treasury, the result would have been the same. States would try to use as much of their allotted funding as possible to benefit their residents, even if that meant needlessly expensive infrastructure.
The reality is that when states are blocked from using saved funds on worthwhile non-deployment projects, they lose the incentive for cost-efficient deployment overall, and consumers lose out.
Out-of-reach Americans could be reached by satellite and fixed wireless quickly, but must instead wait for slow infrastructure buildout. Meanwhile, funds that could have eased the more pressing issues of affordability and adoption rates get funneled into lower-value uses simply because of a self-defeating rule change. If all goes to plan, consumers will still get their internet, but after a longer wait and far more tax dollars spent.
The BEAD program was previously criticized as a “bureaucratic failure” for not having distributed a single dollar after 3 years. But now it risks dramatically wasting its historic price tag because the federal government got in its own way.
With the September 4th deadline looming, NTIA should quickly reinstate approval for the non-deployment projects it previously approved and extend the deadline to October 2nd to bring all states in line with an extension the administration already gave California. That decision would allow Louisiana, Virginia, and other finishers the chance to reconsider.
States prioritizing fiber are simply responding to the messy incentives the government created; incentives that could be fixed. Further delays to the BEAD program are far from ideal, given its already existing reputation, but overspending and outright wastefulness are also problems.
Nate Karren is a policy analyst with the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, follow us on X @ConsumerPal.