The Trump administration released new Broadband Equity, Access, and Deployment (BEAD) Program guidance for states and territories meant to minimize federal spending on broadband deployment as much as possible. Among other changes to Biden-era rules, this guidance mandates that states and territories use cost efficiency of BEAD dollars as the primary criterion for making awards. Further, the new rules prohibit states from showing any preference for particular types of technologies. 

The obvious implication of this rule is that entities that can bid the lowest cost per location—regardless of the type of technology they use—should be big winners. This puts fiber providers at a big disadvantage compared to Low Earth Orbit (LEO) satellite and lower-end Fixed Wireless technologies, because fiber costs more up front.

There is no argument that fiber to the home provides the fastest speeds and the best mechanism to scale up those speeds as demand for higher speed connections increases as AI and multimedia use cases become the mainstream. But even if you use a cost-over-quality argument, fiber still wins out in the long term, as it is much cheaper to maintain and much easier to scale to faster speeds than LEO or fixed wireless. 

Despite this, the new federal guidance has put broadband leaders who were hoping to prioritize fiber infrastructure in a tricky spot. Some states may be considering litigation to restore their right to prioritize fiber deployments, however, there is another mechanism that many states may consider that can bring fiber projects in alignment with the new BEAD guidance in a non-confrontational way: any state that can quickly access its own capital sources could, in theory, provide extra match dollars to fiber-based BEAD applications, bringing the federal share in line with LEO or fixed wireless bids.

Many states still have American Rescue Plan Act (ARPA) funding that isn’t fully allocated, and others have a budget surplus this year. Thinking more creatively, many states have infrastructure bond banks—and while the types of infrastructure they currently fund vary by state—the premise of all of them is to fund good, long-term public infrastructure like roads, bridges, water/sewer. If it isn’t allowable already, fiber could be added to the mission of these lending structures.

While this certainly isn’t as appealing as BEAD paying for up to 75 percent of new fiber broadband infrastructure as the original legislation intended, a significant federal match could still be very appealing to bring world class broadband to more un- and underserved areas, ensuring the digital divide does not re-emerge in five years as bandwidth demands continue to grow.

States that have ARPA money for this will need to plan around the deadline of 2026 to expend ARPA funding. However, given the excess capacity in the fiber construction industry, which staffed up in anticipation of BEAD, there should be a way for states to coordinate with fiber applicants and their contractors to ensure they can expend ARPA dollars next year, and incorporate that guarantee into the award language.

If BEAD is the last big broadband funding effort, and states are set on making sure as many people have long-term fiber infrastructure as possible, providing additional matching funds to select applications is a good compromise option to execute on state broadband priorities while also meeting the federal government’s cost-cutting mandate.

Matt Dunne is the founder and executive director of the Center on Rural Innovation, a national nonprofit committed to advancing economic prosperity in rural America through the creation of inclusive tech economy ecosystems that support scalable entrepreneurship and tech job creation. A lifelong Vermonter and Brown University grad, Matt previously served 11 years in the state legislature, focusing on broadband policy and downtown redevelopment efforts, and was tapped by the Clinton Administration in 1999 to lead the AmeriCorps VISTA program. In 2007, he started Google’s Community Affairs division out of a former bread factory in rural Vermont, helping lead the Google Fiber rollout in addition to the company’s U.S. philanthropy and engagement efforts.

The Benton Institute for Broadband & Society is a non-profit organization dedicated to ensuring that all people in the U.S. have access to competitive, High-Performance Broadband regardless of where they live or who they are. We believe communication policy - rooted in the values of access, equity, and diversity - has the power to deliver new opportunities and strengthen communities.

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