The BEAD Subsidy of Utilities

When internet service providers are asked about the impediments they encounter for building new fiber networks, they almost always list pole issues at or near to the top of the list. Why are poles of such big concern? Building aerial fiber means putting the fiber on poles. Most poles are owned by electric utilities, although some belong to telephone companies or municipalities. Invariably, some poles have to be replaced in order to add a new fiber line. This mostly occurs when there is not enough space for the nationally required distance between wires. But often, poles must be replaced because they are obsolete or in bad condition. Regardless of why poles have to be replaced, the Broadband Equity, Access and Deployment (BEAD) grants are going to be used to replace huge numbers of poles. The cost of replacing poles is built into the construction costs of adding new aerial fiber. Since BEAD will pay up to 75 percent of the cost of fiber construction, that means BEAD will pay up to 75 percent of the cost of replacing poles. That is a huge windfall for electric utilities. In far too many cases, the poles that will replaced by BEAD should have already been upgraded and replaced by the pole owners.