Return the BEAD Bonus to Taxpayers
The National Telecommunications and Information Administration (NTIA) has confirmed that the state proposals for funding under the Broadband Equity, Access, and Deployment (BEAD) program are projected to save more than $20 billion and could reach $22 billion after the last remaining state, California, submits its final bid. Texas alone saved more than $2 billion of its original allocation, more than any other state. BEAD received $42.45 billion in the Infrastructure Investment and Jobs Act (IIJA) of 2021, and the estimated savings of $25 billion would mean that only 40 percent of the original amount was necessary.
The savings come in part from the revised guidance for BEAD, as Citizens Against Government Waste (CAGW) had recommended. The NTIA removed restrictive and burdensome non-statutory requirements related to labor, employment, and workforce development; climate change requirements; open access and net neutrality restrictions; preferences for non-traditional broadband providers like local governments or political subdivisions; and the middle-class affordability and low-cost plan requirements that impose price controls on broadband service.
The other reason for the savings is the use of funds from the American Rescue Plan Act (ARPA), the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Rural Development Opportunity Fund (RDOF), and other programs that were in place before BEAD was created, which CAGW suggested would occur. For example, North Carolina’s final BEAD proposal revealed that the state needs only $408.5 million out of its $1.53 billion allocation because it had spent $1 billion in ARPA funds on broadband deployment. Montana used $310 million of its ARPA funds to connect more than 57,000 locations and needs only $308 million to reach the state’s remaining unserved and underserved locations, which saves $300 million from its BEAD allocation. The most effective use of resources outside of BEAD funding appears to be in South Carolina, which used $400 million in ARPA funds, $25 million in CARES Act money, $30 million of state funds, RDOF funds, and private investment, which cut the number of homes and businesses that were not connected from more than 300,000 to 27,274. As a result, the state needs to use only $41.3 million, or 7.5 percent of its $551 million BEAD allocation.
While the IIJA allows the surplus funds to be spent on “other activities related to improving broadband,” such spending requires approval by NTIA. CCG reports that “West Virginia plans to use non-deployment funds, … for training programs for technical jobs in the telecom sector,” among other projects. Louisiana’s final proposal declares that it will use the funds to “make the state’s largest investment in expanding rural healthcare access. Louisiana Workforce Commission will develop the country’s most unique workforce effort focused on outcomes. The Louisiana Department of Education will implement the most robust virtual learning and virtual tutoring effort in the country. Louisiana Economic Development will roll out the nation’s most ambitious small program focused on helping small businesses and those that are part of our legacy industries get ready for a digital economy.”
CAGW agrees with former Federal Communications Commissioner Mike O’Rielly, who said, “the savings [from BEAD] should inure to the American taxpayer.” He added that if the Trump administration does not want all of the excess funds to be returned, they should be spent in line with BEAD’s “central mission.” That would exclude Louisiana’s wish list, West Virginia’s training plan, and similar far-fetched concepts. The administration should take a well-deserved victory lap for finishing the job of connecting Americans to the internet and give taxpayers a “BEAD Bonus” by requiring states to return all excess funding.
