BEAD dollars to flow in later than expected – analyst

The Broadband Equity Access and Deployment (BEAD) program is poised to "provide a material stimulus" to broadband service operators with respect to government-subsidized footprint expansion, but the "dollars will flow later than originally expected," a top policy analyst predicts.

It's unlikely that a "significant number" of BEAD-funded networks will become operational in 2025, New Street Research's Blair Levin explained this week in a research note (registration required) aimed at resetting expectations for the program following the firm's Fiber to the Future Conference.

Instead, Levin expects BEAD-funded networks to become operational in greater volume between 2026 and 2028.

Even so, he said he expects BEAD to be "one of the biggest events in the telecom sector" in 2024 and 2025 as the government doles out $42.5 billion to help expand high-speed Internet access in unserved and underserved areas.

He noted that the process ahead includes map challenges for unserved and underserved locations, the completion of the NTIA's review of state-level BEAD plans, state-run grant processes, winner selections and finally network deployments by grant winners.

The good news is that states have set up their respective broadband offices to manage the BEAD program, Levin added, and that several equipment suppliers across both fiber and electronics have "stepped up" with US-based manufacturing to help operators adhere to Build America, Buy America (BABA) act restrictions. That removes a potential risk for BEAD, he noted.

Room for FWA

Levin also touched on the network requirements for BEAD. While fiber is a general requirement, there is room for some grants for fixed wireless access (FWA) in unserved and underserved areas where the fiber option will run over the build budget.

Meanwhile, operators are still forming their attitudes toward BEAD. New Street Research analyst Jonathan Chaplin reiterated in a separate note (registration required) that Charter Communications and Frontier Communications will focus on states that are the friendliest to private investment. However, some smaller operators, such as TDS and Shentel, "have lost interest in BEAD given the red tape and heavy-handed regulation," he noted.

Additionally, uncertainty about the future of the Affordable Connectivity Program (ACP) is also playing a role. "Various speakers [at the Fiber to the Future event] also mentioned that an end to ACP would make many BEAD locations unattractive build opportunities," Chaplin explained.