In a June 2024 Perspectives from FSF Scholars, I focused a spotlight on insidious efforts by both the National Telecommunications and Information Administration (NTIA) and certain state-level bureaucracies to inject extraneous policy objectives like rate regulation and a fiber-at-any-cost bias – what I termed "devilish details" – into Broadband Equity, Access, and Deployment (BEAD) Program funding decisions. Recent news from the Hill and the FCC demonstrate that others share my concerns.
In a letter dated July 9, 2024, to NTIA Administrator Alan Davidson, House Energy and Commerce Committee Republican leaders wrote that "it appears that the NTIA may be evaluating initial proposals counter to Congressional intent and in violation of the law." And in written testimony prepared for a congressional hearing held that same day, FCC Commissioner Brendan Carr expressed his broad view that the BEAD Program "is going off the rails."
Noting the BEAD Program's unprecedented exemption from Freedom of Information Act (FOIA) requirements, House Energy and Commerce Committee Chair Cathy McMorris Rodgers (WA), Subcommittee on Communications and Technology Chair Bob Latta (OH), and Subcommittee on Oversight and Investigations Chair Morgan Griffith (VA) in their letter demanded greater visibility into why only 16 of the 56 initial proposals submitted by states and territories prior to year-end 2023 had been approved as of July 9, 2024. (The following day that total grew to 17 with the approval of Maryland's submission.)
In particular, the authors pointed to "anecdotal evidence" – the best available under the circumstances – indicating that NTIA "is directing [states] to set rates and conditioning approval of initial proposals on doing so." By way of example, they highlighted an objection by the Virginia Office of Broadband to NTIA's insistence upon "an exact price or formula" for its low-cost service option before its initial proposal would be approved, an impasse which I addressed here.
Chair McMorris Rodgers and Subcommittee Chairs Latta and Griffith therefore requested copies of "all communications between [NTIA] and state broadband offices as it relates to pending [BEAD Program] Initial Proposals" no later than July 23, 2024. They also sought information regarding "[t]he factors or conditions that are preventing state entities from having their initial proposals accepted," including "all instances where a state's initial proposal was not accepted … due in part to the BEAD's low-cost option requirement pricing as a factor in the decision."
The concerns of Commissioner Carr, meanwhile, include but are in no way constrained to rate regulation alone. Labeling the $42.45 billion BEAD program "the slowest moving federal broadband deployment program in recent history" – after nearly 1,000 days, "not one person has been connected to the Internet with those dollars" – he pointed the finger at the convoluted, multistep design of the program and reminded the Subcommittee that this "failure to launch is not only predictable, it was predicted" by various members of Congress.
(For the record, it also was predicted by numerous Free State Foundation scholars: member of the Free State Foundation's Board of Academic Advisors Michelle P. Connolly, Ph.D., FSF President Randolph J. May, FSF Director of Policy Studies and Senior Fellow Seth L. Cooper, and me.)
Laying the blame at the feet of the Biden Administration for "layering on red tape and advancing a wish list of progressive goals," Commissioner Carr faulted specific elements of the BEAD Program as implemented – but not found in the text of the Infrastructure Investment and Jobs Act that lead to its creation – that "pursue a climate change agenda, [diversity, equity, and inclusion] requirements, technology biases, price controls, preferences for government-run networks, and rules that will undoubtedly lead to wasteful overbuilding."
Consequently, Commissioner Carr predicted that, at the end of the day and after all the money is gone, households, particularly rural households, will remain unserved "absent major reforms" that reign in wasteful spending on unrelated Biden Administration priorities and remove unnecessary bureaucratic hurdles.
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