The US House Energy and Commerce Committee hosted a three-hour hearing on the $42.5 billion Broadband Equity Access and Deployment (BEAD) program on Tuesday (September 10). The hearing covered difficulties some states are having getting the program to the starting line, with fingers pointed at the NTIA for a lack of timely guidance. But it also highlighted that challenges with BEAD largely come from or could be alleviated by Congress.

The hearing also touched on how the BEAD situation can still get more complicated.

Some background

Tuesday's hearing on BEAD follows a recent flurry of headlines, mostly from right-leaning outlets, lamenting that no funding has yet been spent through the program to build broadband infrastructure in the last three years, and blaming the Biden administration and NTIA.

BEAD funds have been anticipated for several months, thanks in part to the process set by Congress in 2021. That process – created via the Infrastructure Investment and Jobs Act (IIJA) – necessitated that BEAD allocations per state be made using a new FCC broadband map. The FCC's map was finalized for BEAD use in May 2023, thus the NTIA was unable to set BEAD allocations until that June. 

It's also worth noting that Congress created BEAD as a four-year program and mandated through the IIJA that states submit initial and final proposals to the NTIA for approval.

Indeed, as policy analyst and former FCC official Blair Levin – who served as a witness at Tuesday's hearing – pointed out, BEAD was specifically designed by Congress to avoid the flaws of prior federal broadband programs, like the Rural Digital Opportunity Fund (RDOF), and to "finish the job" of closing the digital divide.

"The principal causes of the BEAD timetable stem from Congress' desire to avoid the problems of waste, fraud and abuse that plague the 2020 RDOF auction and other deployment programs," said Levin.

'Flying a plane while building it'

Still, as Montana's Chief Operating Officer Misty Ann Giles illustrated at the hearing, states are caught in the middle of a complex process, and are lacking clarity from the NTIA. Montana officially received approval on its initial BEAD proposal last month and opened its application window shortly thereafter.

"States all face the same common issue when it comes to BEAD deployment: It's navigating the complex BEAD process. It's really more akin to flying a plane while building it. Yet we don't really have access to the full instruction set," said Giles.

She further lamented a lack of clear or timely guidance from the NTIA on a range of matters, including permitting and the use of alternative technologies to fiber – the latter of which the NTIA provided guidance on in August.

"It's great that we finally have guidance, but it's at the eleventh hour for all states," said Giles. "Our initial proposals were due last December, and so we've got to figure out how to weave those in and implement. And some of us, like Montana, actually have our application window actually open."

Affordability requirements

Another subject that has generated pushback from service providers and the states that need them to bid on broadband funding is a requirement that BEAD grant recipients offer an affordable option. That mandate, too, was created by Congress, but the NTIA has been criticized for how it is evaluating and approving (or not approving) states' definitions of an affordable plan and thus accused of rate regulation.

"The position of NTIA is ... that this is a voluntary program, so it's not rate setting. However, I would state that is a farce," said Giles.

But as Blair Levin noted, it's "necessary to condition the government subsidy on an affordability requirement, as the subsidy creates a monopoly. Monopolies price in ways that would make the service unaffordable to many, which would be contrary to congressional intent."

Further, said Levin, when BEAD was created, the Affordable Connectivity Program (ACP) was expected to be the solution to the program's affordability requirement – but Congress has since let the ACP's funding lapse.

"The affordability issue would not be a problem if Congress had extended the Affordability Connectivity Program," said Levin.

Nevertheless, without the ACP, and with an affordability requirement, some providers may find it difficult to participate in BEAD at all – particularly with continued uncertainty around the future of the Universal Service Fund (USF), which sustains high-cost deployments.

"Concerns about affordability measures in some states do remain as they could undermine project sustainability," said Shirley Bloomfield, CEO of NTCA–The Rural Broadband Association, and a witness at Tuesday's hearing, adding that the recent court decision ruling USF unconstitutional "may have a chilling effect on BEAD participation."

The election

It's notable that this hearing occurred mere hours before the 2024 presidential candidates are to take the stage in Philadelphia for their first debate (and first meeting).

While telecom matters are not likely to take up much of the airtime at the debate, another subject – Project 2025, designed by the Heritage Foundation as a playbook for a second Trump term – is sure to come up, and is relevant to BEAD.

At Tuesday's hearing, Levin referenced Project 2025, including a chapter written by Republican FCC Commissioner Brendan Carr, which proposes changing the federal government's priorities for broadband spending. If implemented, that could result in a complete overhaul of BEAD and the work done thus far.

"Using Montana's example ... in terms of the timetable, if you suddenly say, 'Okay, we're just going to stop everything' – I mean, she's on the ten-yard line. She is ready to score for Montana. NTIA is ready to give her money. And if you suddenly say, stop, and let's have another winter go by ... I think that would be a disaster," said Levin.

"In addition, I would say Project 2025 talks about firing civil servants. And a lot of the people who have done these programs, both at the FCC and NTIA, are civil servants, and they know more about this than anybody," added Levin. "They serve honorably and well under both Republicans and Democrats. You suddenly fire them, that could cause massive delays in terms of this program."