The Biden Administration’s unwillingness to enforce federal statute could threaten billions in broadband funding.

The 2021 Infrastructure Investment and Jobs Act (IIJA) provides $42.45 billion in grant funding to states via the Broadband Equity Access and Deployment Program (BEAD). IIJA also underscores that any state receiving these funds may not exclude local governments from applying to use these funds to build their own broadband networks. Yet, 17 states have laws that do exactly this.

With tens of billions of dollars about to be disbursed, the National Telecommunications and Information Administration (NTIA)—the government agency tasked with overseeing BEAD— continues to ignore a looming legal quandary that could mire the program in lawsuits.

This legal paradox is not subtle. Texas, for example, which has been allocated $3.3 billion in BEAD funding, acknowledges the contradiction between federal and state laws. Yet, the Texas Broadband Development Office lacks the ability to resolve this inconsistency between federal and state law, affirming that it “has no authority to waive any laws [that] preclude certain public sector providers from participation in the subgrant competition.”

With over $1 billion of BEAD funding on the line, Pennsylvania has an even more peculiar response. In Pennsylvania, state law forbids municipalities from offering broadband services unless the incumbent telephone company refuses to deploy high-speed internet. Essentially, while Pennsylvania has not banned municipal broadband outright, it has made it functionally impossible for local governments to build their own networks.

The Pennsylvania Broadband Development Authority (PBDA) originally acknowledged that state law directly conflicted with federal statute, concluding:

What is remarkable is that in its recently-approved Volume 2 Initial Proposal, PBDA replaced its assessment with new language that directly contradicts its original statement. While acknowledging that stakeholders expressed concern “about compliance with both Commonwealth and federal law, specifically relating to 66 Pa. C.S.  3014(h)(2), and providing a list of the hoops a municipality must pass through in order to begin a broadband project (such as right of first refusal by incumbents), the PBDA concluded that:

Thus, rather than repeal a highly problematic state law, Pennsylvania claims that the law in question simply does not exist. This is all the more awkward when you look at the title of the statute: “Prohibition against political subdivision advanced and broadband services deployment.”

To be fair to Pennsylvania, however, the NTIA has failed to provide any guidance on this matter.

The closest the NTIA has come to addressing the contradiction between federal and state law as they pertain to public sub-grantees is an unofficial media quote from an unnamed NTIA employee, “there is nothing in our rules that any state’s or territory’s BEAD allocation would be delayed or reduced due to a state’s restriction on pre-existing public eligibility to compete for BEAD grants.” Thus far, NTIA has refused to issue any official clarification about its own staff’s claim that the agency is planning to ignore federal statute.

By failing to address the problem, the NTIA has placed itself between a rock and a hard place. Clearly, the NTIA did not make any states ineligible for funding based on prohibitions on municipal broadband. But, by failing to issue guidance on the issue and by not upholding the federal statute as it pertains to these 17 states, the NTIA may find itself in direct violation of the IIJA. We may also see lawsuits by potential public applicants in these 17 states that could delay the allocation of BEAD funding to sub-grantees. The sad reality is that the NTIA is well aware of this problem, acknowledging two years ago that this contradiction exists and encouraging states to “waive” anti-municipal broadband state laws.

The current “solutions,” however, are either to follow Pennsylvania’s lead and pretend that current anti-municipal broadband laws do not exist, or to follow in Texas’s footsteps and acknowledge that anti-municipal broadband laws exist but pretend that federal statute does not.

The IIJA is quite explicit: states may not exclude local governments from eligibility for BEAD funding. NTIA has ignored this looming problem for more than two years but is now out of time. And if NTIA does not reconcile this grant eligibility issue, it will be guilty of allocating billions of dollars in federal funding in violation of federal statute.

Christopher Ali is the Pioneers Chair in Telecommunications and Professor of Telecommunications in the Donald P. Bellisario College of Communications at Penn State University.

David Elliot Berman is a Postdoctoral Fellow at the Media, Inequality & Change Center at the University of Pennsylvania studying media policy and journalism.

Sydney L. Forde is a PhD candidate in the Donald P. Bellisario College of Communications at Penn State University. Her work focuses on the political economy of communications and media industries, media policy, and critical theory. 

Sascha Meinrath is the Palmer Chair in Telecommunications in the Donald P. Bellisario College of Communications at Penn State University and the director of X-Lab.

Victor Pickard is the C. Edwin Baker Professor of Media Policy and Political Economy and Co-Director of the Media, Inequality & Change Center at the Annenberg School for Communication at the University of Pennsylvania.

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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