Is the BEAD Program Large Enough to Solve the Rural Digital Divide?

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.]