How Will Big Telecom Companies Handle Federal Grants?

Several large telecom companies have announced big plans to expand fiber coverage, and I assume that also means heavily participating in the infrastructure law's $42.5 billion Broadband Equity, Access and Deployment (BEAD) grant program that is aimed primarily at bringing better broadband to rural areas. It’s likely that companies want to benefit from the huge upcoming federal grants. The easiest way for them to take advantage of the federal grant is to plan to overlash fiber onto existing telco copper where the companies are already the incumbent. But if the grants are lucrative enough, they might seek grants in other areas as well. Big telecom companies have always done well with subsidies coming directly from the federal government, but will they do as well with funding being decided at the state level? State regulators and state governments across the country have been unhappy with the way that the big telecom companies abandoned rural telephone networks. Most states have been able to make an easy comparison between smaller companies and cooperatives that have invested in rural fiber and the big ones that have done as little as possible to keep rural networks operating. It’s going to be nearly impossible to follow grant policies and trends everywhere when all fifty states will be embarking on a giant grant program at the same time. One thing is for sure – the next few years are going to be interesting.

[Doug Dawson is President of CCG Consulting.]