If BEAD Isn’t Enough

There are several states already estimating that the Broadband Equity, Access, and Deployment (BEAD) grant funding is not going to be enough money to reach all of their unserved and underserved areas. California, New Mexico, and Minnesota have estimated that BEAD will fall short. By the time the dust settles there will likely be more states. I’m not surprised by this. Just since the BEAD grant program was enacted by the Infrastructure Investment and Job Act (IIJA) in November 2021, there have been some significant cost increases for building broadband networks. Network design engineers are telling me that costs have gone up in most places by 20% to 25% since 2021. Part of this comes from inflation, which has driven up the cost of materials and labor. But a lot of the increase comes from perceived labor shortages in the industry, which has prompted construction contractors to raise prices faster than inflation. The various cost increases mean that BEAD funding won’t cover nearly as many locations as might have been supposed by whoever determined that $42.5 billion was enough money. Where might the money come from to cover these shortages? There are several possibilities.