One of the biggest questions associated with the $42.5 billion Broadband Equity, Access and Deployment (BEAD) grant program is if that is enough money to solve the national rural digital divide. The funding works out to be around $850 million per state, but will vary significantly by state. However, states like Minnesota, which are estimated to receive about $650 million in BEAD funding, require around $1.3 billion to reach everyone in the state. This raises a lot of questions. Inflation has caused a lot of estimates where the cost to build broadband networks is between 15% to 25% higher than just two years ago. Additionally, I’ve also seen estimates that the rules established by Congress and the National Telecommunications and Information Administration (NTIA) for the BEAD grants could add as much as another 15% to the cost of building broadband networks compared to somebody not using grant funding. Other concerns include: how state legislatures decide to allocate American Rescue Plan Act (ARPA) funding to broadband; how state broadband offices decide to service areas where a 75% grant is not enough for a broadband provider to make a business case; and whether a particular broadband provider is considered qualified enough to receive BEAD funding from state broadband office. If the Minnesota estimate is even roughly accurate, it’s likely that Minnesota won’t be the only state that doesn’t receive enough BEAD money to get broadband to everybody.

[Doug Dawson is president of CCG Consulting.]

Gov Greg Abbott (R-TX) was recently in Laredo (TX) touting his efforts to get the roughly 7 million Texans without broadband access online, something he deemed an emergency item in the last legislative session. But Abbott’s Democratic challenger, Beto O'Rourke (D-TX), has been hammering him for vetoing a bill that would have shored up state funding used to build and maintain phone lines that carry broadband service in rural areas. O’Rourke blamed the veto for phone bills jumping by as much as $4.61 in August for some rural Texans. The political sparring underscores how tenuous the state of broadband remains in Texas, where some 2.8 million homes do not have access to high-speed internet, according to the comptroller’s office. State officials are gearing up for a massive, federally funded buildout of the service, but have not figured out how to fund it in the long run. Texas is on tap to receive $500 million from the American Rescue Plan and as much as $4 billion through the Infrastructure Investment and Jobs Act, though the actual amount has yet to be determined. It’s also unclear how many homes the federal funding will be able to get online. By some estimates, it could cost as much as $15 billion to get every home connected to high-quality fiber networks.