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Report warns of BEAD funding delays due to municipal broadband bansReport warns of BEAD funding delays due to municipal broadband bans

A new report suggests BEAD funds could be delayed by 'months – or even years' for states that don't remove their municipal broadband bans.

Nicole Ferraro

April 13, 2023

7 Min Read
Report warns of BEAD funding delays due to municipal broadband bans

A new report from BroadbandNow is calling attention to how ongoing roadblocks to municipal broadband across the US may result in delays to states receiving funds from the $42.5 billion Broadband Equity, Access and Deployment (BEAD) program.

Language within the NTIA's notice of funding opportunity (NOFO) for BEAD suggests the government may withhold funding if municipalities are restricted from bidding on state broadband grants.

As per the NTIA, state BEAD final proposals must include:

  • A description of efforts undertaken by the Eligible Entity to ensure the participation of non-traditional broadband providers (such as municipalities or political subdivisions, cooperatives, non-profits, Tribal Governments, and utilities), including an explanation for awards to traditional broadband providers when one or more non-traditional providers submitted competing proposals to serve an area...

According to BroadbandNow's research, there are currently 17 states with laws either banning or otherwise hindering municipalities from offering broadband, and a handful more with "other forms of roadblocks in place that make operating municipal networks more difficult," writes BroadbandNow's Editor in Chief Tyler Cooper.

As such, BroadbandNow warns that states may face a situation where municipalities petition NTIA directly if they're left out of the BEAD granting process. Cooper writes that "there is technically nothing stopping the NTIA from denying state plans if they refuse to allow municipal providers to participate," which could delay BEAD funds by "months – or even years."

Figure 1: (Source: Juan Roballo/Alamy Stock Photo) (Source: Juan Roballo/Alamy Stock Photo)

Below is a condensed summary of states with municipal broadband restrictions and their estimated BEAD allocations based on existing data:


Explanation of Ban or Restrictions

Estimated BEAD $


Allowed but can't use local funds for initial build, can't expand beyond jurisdiction, limits on bundles



Banned unless municipalities hold public referendum (allowed if no private ISP present)



Allows muni broadband but imposes 'ad valorem' taxes



New public utilities require 51% voter referendum (60% if using bonds for broadband)



Allows muni broadband but imposes barriers, requires public referendum



Requires municipality to solicit RFPs from private companies first



Allowed with 65% 'supermajority' vote on referendum



Allows muni broadband but not TV, phone; bars leasing to other providers



Allows muni broadband if no private providers present



Bans any public entity from providing broadband



Banned for municipalities with over 25K population, counties with over 50K


North Carolina

Roadblocks include restrictions on financing, requirement to bake in extra costs, etc.



Allowed if private ISPs are first given 14 months to respond to request for service


South Carolina

Roadblocks include proposal-stage barriers, phantom cost requirements, additional taxes



Electric utilities may operate broadband but not beyond service area



Bars munis from offering telecom services; some exceptions when no private ISP present



Allowed but with 'many procedural and accounting requirements'; restricts municipal bonds



Allowed but must match incumbent rates, meet additional requirements, add costs



Allowed but must match incumbent rates, hold public hearings, conduct feasibility studies


(Source: BroadbandNow, state constitutions; BEAD figures from ACA Connects)

Munis push back

To be sure, some communities have launched municipal broadband networks despite the roadblocks and bans presented by the aforementioned state laws. The most well-known example is Chattanooga, Tennessee, which delivers gigabit fiber via the city's Electric Power Board (EPB).

In Utah, the open access municipal network Utopia Fiber is now providing fiber to 20 Utah cities and last year built out more than 2,969,784 feet of fiber infrastructure across Utah, Idaho and Montana, according to a recent announcement.

And the parish of Lafayette in Louisiana overcame its own hurdles as well to launch LUS Fiber in 2009, which was awarded $21 million from the NTIA last year to continue expanding.

Moreover, a few states are attempting to pass more favorable laws in light of the BEAD program.

In 2022, for example, both New York and Maine passed legislation to further support municipal broadband efforts.

And currently, the Colorado legislature is considering a bill that would overturn a state law restricting municipal broadband. That law allowed for individual municipalities to opt out via public referendum, and 140 have done so since its passage – leading to municipal network launches such as Loveland's Pulse. The new legislation, if passed: "Eliminates the requirement that a local government hold an election before providing or before operating a facility to provide cable television, telecommunications, or broadband internet services to subscribers," according to the bill text.

What comes next?

How states resolve these roadblocks in terms of BEAD remains to be seen. But there's still a bit of time to sort it out.

At present, the NTIA plans to release BEAD allocations on June 30 (providing that date doesn't get delayed). That starts a 180-day window where states are required to submit their initial proposals for how they'll structure their BEAD programs.

NTIA has said it will review proposals "as expeditiously as possible." Upon approval of initial proposals, states will receive 20% of their funding and – from there – will have a year to "conduct additional local coordination, complete the selection process" and submit final proposals to receive their remaining funds, according to NTIA's BEAD NOFO.

It's at that point that funds could conceivably be held up if states haven't taken adequate steps to include "non-traditional broadband providers" in the process.

BroadbandNow's Cooper told Light Reading that he thinks NTIA's stance, as written in the BEAD NOFO, was "intentional" with regard to addressing municipal broadband bans.

"They seem to want to give states the option to take the 'easy' way out and waive their muni restrictions. If they don't, they want to force the state to defend their decision to the public," he said. "As for what happens when we reach that point, it's currently anyone's guess."

Related posts:

Nicole Ferraro, editor, Light Reading, and host of "​​The Divide" on the Light Reading Podcast.

About the Author(s)

Nicole Ferraro

Editor, host of 'The Divide' podcast, Light Reading

Nicole covers broadband, policy and the digital divide. She hosts The Divide on the Light Reading Podcast and tracks broadband builds in The Buildout column. Some* call her the Broadband Broad (*nobody).

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