Providing broadband access to Americans who are unserved and underserved and want to be connected to the internet is a longstanding objective for both the private sector and the federal government.  As the incoming Trump administration and 119th Congress prepare to move this process forward, significant questions about funding for both the Broadband Equity Access and Deployment (BEAD) program and the Universal Service Fund (USF) must be addressed.

In 2023, the broadband industry invested $94.7 billion in communications infrastructure, the second highest in 22 years, bringing the total to $2.2 trillion since 1996, not only for new connections, but also to improve and upgrade existing systems.  The federal government, on the other hand, has yet to allocate a single penny of the $42.45 billion that was provided for BEAD through the National Telecommunications and Information Administration (NTIA) in the Infrastructure Investment and Jobs Act, which was signed into law in November 2021. 

In his July 9, 2024, testimony before the House Energy and Commerce Subcommittee on Communications and Technology, incoming Federal Communications Commission (FCC) Chairman Brendan Carr said, “This makes President Biden’s signature BEAD initiative the slowest moving federal broadband deployment program in recent history, as far as I can tell.”  He noted that no projects will begin until 2025 and most will not start until 2026. 

Concerns about BEAD have also been expressed by incoming Senate Commerce, Science, and Transportation Committee Chairman Ted Cruz (R-Texas), whose November 21, 2024, letter to NTIA Administrator Alan Davidson noted that Congress’s review of the BEAD program early in 2025 will include the agency’s “extreme technology bias in defining ‘priority broadband project’ and ‘reliable broadband service’; imposition of statutorily-prohibited rate regulation; unionized workforce and DEI labor requirements; climate change assessments; excessive per-location costs; and other central planning mandates. In turn, states will be able to expand connectivity on terms that meet the real needs of their communities, without irrelevant requirements that tie up resources, create confusion, and slow deployment.” 

Sen. Cruz’s September 2023 “Red Light Report” pointed out that $42 billion “is more than enough money to deliver broadband to every American.”  He was concerned that the “duplicative subsidies” in the BEAD program would “divert funds away from truly unserved rural areas.”  He also cited disparate allocations of costs per location, including $547,524 for each location in Washington, D.C., and that there were five million locations funded by BEAD that were already received funds from other federal programs.  He noted that the preference for fiber would not only drive-up costs but “likely deprive some communities of any broadband access at all.” 

Sen. Cruz is not the only member of the Commerce, Science, and Transportation Committee to express significant concerns about BEAD.  An August 18, 2022, letter to Commerce Secretary Gina Raimondo, signed by 14 Republican members of the committee, cited provisions of the NTIA Notice of Funding Opportunity for BEAD that undermine, conflict with, or exceed the authority provided in the IIJA, including rate regulation, technology neutrality, provider and workforce preferences, middle mile deployment, and unnecessary burdens in the review process.

Citizens Against Government Waste (CAGW) has been analyzing and tracking the BEAD application process, and released an issue brief on October 2024, “BEAD: Broadband or Bust.”  The report reiterated the availability of sufficient “federal funding to bring broadband connectivity to every household and business in America,” but that would be “unachievable” unless the Biden-Harris administration stops its “wasteful, duplicative, anti-competitive, and anti-consumer spending.”  The report also reviews the states’ efforts to bride the digital divide and the myriad barriers to deployment.

With Commissioner Carr becoming chairman of the FCC and Sen. Cruz becoming chairman of the Commerce, Science, and Transportation Committee, there will be more accountability not only for BEAD, but also other federal programs related to broadband deployment.  Unserved and underserved business and households may finally get connected while the taxpayers get more effective and efficient use of their money to achieve that objective.

The future of the USF is also at stake as well following the July 24, 2024, Fifth Circuit Court of Appeals decision on the program’s funding mechanism.  CAGW’s August 2, 2024, blog post noted, “The court found that the “FCC calls this tax the USF ‘contribution factor’; but we call it what it is – the ‘USF Tax.’”  The Fifth Circuit also calls into question the subdelegated authority the USAC was given by the FCC to increase this tax on providers, which are typically passed on to consumers.” 

Proposals to fix the funding issues include charging fees to all consumers who use the internet and providing funds through the appropriations process.  The latter idea would solve the issue raised by the court about the Universal Service Administrative Company (USAC)’s authority to impose quarterly increases in the USF fee on the dwindling number of people and businesses who use the basic telephone services that now fund the USF and provide much-needed accountability and transparency for how the fund is administered by the FCC and USAC.

The new Congress and incoming Trump administration must resolve not only issues related to BEAD and USF but also other telecommunications and technology challenges facing the federal government.  The Department of Government Efficiency (DOGE) can help by reviewing the 133 duplicative and overlapping broadband programs across 15 agencies identified in a May 2022 Government Accountability Office (GAO) report and determining which are the most effective in deployment broadband across the country.