Turning up the Heat on BEAD

July 10, 2023 | As if the summer wasn’t hot enough, last week the NTIA turned up the temperature on the BEAD program by announcing its funding allocations for the $42B up for grabs. Awards ranged from $27 million to over $3.3 billion, with every state receiving a minimum of $101 million, including some small states who received out-sized dollars for the very limited locations that remain to be served.

The allocations were built on the FCC’s most recent version of the National Broadband Map, released in May. Relying on the challenge process and additional work with more sophisticated data tools, the FCC added almost 3 million new locations to the fabric, removed 2 million and resolved more than 3.7 million challenges to data on broadband availability. In the end, from version 1 to version 2 of the FCC’s map, the percentage of unserved locations nationwide increased by only 0.2 percentage points, which increases confidence in the accuracy of the overall data set.

Based on the current data set, NTIA relied on a base of 8.7MM unserved locations and 3.8MM underserved locations in the US.  These 12.4MM eligible locations are down from the 14.2MM identified in the first version of the FCC map. Note that the data reflects only one location for multi-tenant environments, so the number of actual homes/small businesses that will ultimately be available for service will be higher.

Nineteen states received allocations over $1 billion, with the top 10 allocations being directed to Alabama, California, Georgia, Louisiana, Michigan, Missouri, North Carolina, Texas, Virginia and Washington. The five states receiving the most funding were Texas ($3.3 billion), California ($1.9 billion), Missouri ($1.7 billion), Michigan ($1.6 billion), and North Carolina ($1.5 billion).

The actual subsidy available per unserved location ranges from a high of over $500,000 (DC received $101M against 184 unserved locations) to a low of roughly $2,200 (with Arkansas receiving $1.024M against 451,000 unserved locations). Average subsidy per unserved location is roughly $4,800 (not accounting for the administrative expenses that each state gets to take off the top).

Now that the allocations have been announced, the states and territories are free to submit their Initial Proposals for Allocation of the dollars, with the window opening on July 1st and all filings required by December 1st. Each eligible entity may also request up to 20 percent of their allocated funds once their proposal is approved by NTIA.

This is no doubt a huge accomplishment for the BEAD program. But there is much work left to be done — by the federal government, the State Broadband Offices, which will manage the ultimate distribution of the funds, and the companies that will be vying for grants. And there are a number of issues that continue to cloud the path forward, from cumbersome local permitting processes to finding a workable path forward on the Buy America provisions. The industry also continues to work with Congress on taxation issues that threaten to divert some of the grant dollars back to the U.S. purse.

And, of course, the ultimate question: will it be enough? With so many variables, that one is hard to call. We will learn more as the states submit their initial proposals for review.

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