States Must Be Smart When Defining ‘Extremely High-Cost Locations’

States have a lot to think about as they determine how to prioritize investing federal broadband dollars. Every state that receives federal funding via the Infrastructure Investment and Job Act’s (IIJA) Broadband Equity, Access, and Deployment (BEAD) Program should have the flexibility to design and implement a plan that meets its policy prerogatives. However, there is a sleeper issue not receiving much attention that could derail a state’s ability to spend its BEAD allocation effectively. It’s called the “Extremely High Cost Per Location Threshold,” and if states are not careful, this wonky issue could hamstring their ability to maximize the impact of federal broadband funding. You won’t find the term in the statute, but the BEAD Notice of Funding Opportunity requires states to propose, and NTIA to approve, an extremely high-cost threshold – a minimum cost-per-location-passed below which states cannot consider a non-fiber alternative, regardless of the cost differential. Some have called for this threshold to be set as high as possible so that fiber is virtually guaranteed to win every time. This is a mistake. If a state sets the threshold too high, it could be forced to allocate all of its funds for a limited number of fiber deployments, likely to the exclusion of alternative high-speed technologies and other state priorities. That doesn’t make sense for several reasons:

• First, let’s recognize that choosing a non-fiber alternative does not mean providing a second-class service. Quite the contrary. Fixed wireless to the home is a reliable, high-speed, affordable alternative to fiber, and it is much faster to deploy.
• Second, rural fixed wireless offers an important additional benefit – mobile 5G. The right mix of spectrum and technology often enables the same radios and antennas being deployed for fixed wireless to also expand access to mobile broadband service in remote areas. 
• Third, states are faced with the challenge of designing a bidding process that results in reasonable subsidy levels to sufficiently stretch limited federal funds. Experts are already starting to do the math, and there will be significant variation in terms of which states receive enough funding to connect the unserved and still have additional dollars to address other issues.
• Fourth, some states are big and topographically diverse, resulting in systematic broadband deployment cost differences. A high threshold in the eastern part of a state might ensure that all homes there get fiber, but in the process consume the vast majority of BEAD funds, leaving fewer options for the entire western region, even if the state’s goal is to ensure a regionally diverse mix of projects.
• Finally, in addition to physical infrastructure buildout, BEAD dollars can be used for digital literacy and equity programs, workforce development, telehealth facilities, and even device subsidies. Set the threshold too high, and the state may not have enough money for important non-deployment priorities.

The bottom line: This is not a battle between technologies. Fiber and fixed wireless are both incredible technologies that will make sense for a state to deploy in different areas. But states should not unnecessarily tie their own hands by setting an overly high threshold. Instead, states should allow themselves the opportunity to choose the right mix of technology to meet their deployment and non-deployment policy objectives. 

[Patrick Halley, President and CEO, Wireless Infrastructure Association. He also served at the Federal Communications Commission as a legal advisor to the FCC Chairman and two Bureau Chiefs, as Associate Chief of the Wireline Competition Bureau, and Acting Director of the Commission’s Office of Legislative Affairs. ]