NTIA, the federal office administering the largest single investment to expand Internet access across the nation, appears to once again be changing the BEAD program in ways that would only force states to further reduce investment in rural areas.
Commerce Secretary Howard Lutnick, who oversees the NTIA office, has already introduced delays to the $42.5 billion Internet access expansion program, creating a year-long slow-down at a time when many states could be already connecting homes.
Now, even as the administration claims to be expediting the process, NTIA seems to have added yet another time-consuming wrinkle: a super secret “Best and Final Offer” round imposed on states after submitting final proposals.
A quick reminder of where we are: states were forced to redo all their work in recent weeks to follow new rules aimed at cutting costs by making the program demonstrably worse for hundreds of thousands of families.
Rather than spend money to help get these families access to comparably affordable fiber networks, states now have to push billions toward low-Earth orbit satellite services which offer them far worse connectivity at much higher prices to each subscriber. And yet, NTIA called this process of reducing investment in rural America the “Benefit of the Bargain” round.
Last week, most states submitted their new final proposals and were moved into the 90-day process of NTIA responding and curing the state plans. But we are now hearing reports that there is a new step in the BEAD process to further reduce new investment in the areas that currently only have access from satellite providers.
There is no official announcement to date about the new “Best and Final Offer” part of the BEAD saga, but it apparently involves new price caps that are based on secret Costquest (the company the FCC pays to maintain the deeply-flawed national broadband map) models. If a project exceeds the secret cost cap, the state has 3 days to work with the ISP bidder to reduce costs still further.
If the bidder cannot meet that secret cost cap, then the state must reopen negotiations with all the applicants.
In early 2025, the majority of states had managed to find ISPs to build advanced Internet access networks that would meet resident and business needs for decades into the future for nearly every location in their jurisdiction. And they did so under budget! Then they were told they had to trim their under-budget plans, meeting the new rules imposed specifically to reduce investment in rural America. They did it – on an expedited basis – only to find that once again they are being told to find more families and businesses to leave with no options beyond satellite Internet access.
One of the endless, unexplained mysteries in this whole process is why NTIA is pushing so hard to move from fiber that meets the NTIA budget requirements to a satellite service that is already present.
In rural northeast Louisiana, the only option many families have is Starlink. It makes sense to spend $4,000 to $5,000 per home to build a more affordable, robust network there that can attract economic development and opportunity. But paying Elon Musk’s SpaceX $1,000 per location (a rough average of these subsidies across the US in preliminary figures) is a waste. It is already available.
Several thoughts come to mind in this latest twist, the first being that this might all be a massive psychological experiment conducted by the Trump Administration to see what happens when you subject people running broadband offices to unimaginable stress time and time again. When and how do they break?
Another thought is that if you think the “Best and Final Offer” round is the actual final step, then I want to introduce you to my friend Sisyphus and his rock. Have you ever reviewed a doc named something like “2024_final_final_0421_really_final_last_chance.docx”?
Commerce Secretary Lutnick is setting a record in how many times he can try to pull the rug out from under rural America. The state and territory offices trying to unlock these funds to permanently solve the infrastructure gap hindering Internet access in rural areas have risen to challenge after challenge in both Presidential Administrations, but I wonder how much more they can take.
At the Institute for Local Self-Reliance, we aren’t a big fan of BEAD or BEAD 2.0 – too much money is going to national monopolies that have a poor track record of service. But we feel the need to take a stand in favor of honest and transparent government.
BEAD was designed to correct the failures of multiple billion-dollar federal Internet access subsidy programs but the Trump Administration is forcing it back into the old pattern of throwing money at politically-connected monopolies rather than serving the long term interests of rural communities.
UPDATE - We thought it is worth noting that on the episode of Connect This! before the "Best and Final Offer" news came to light, we discussed how state offices had done a good job of complying with the significant changes to reduce investment. That discussion started at 30:20 into Episode 120.
Inline image of Commerce Secretary Howard Lutnick testifying before Congress courtesy of Broadband Breakfast
Inline image of Starlink home satellite dish courtesy of Wikimedia Commons, Creative Commons license, CC0 1.0 Universal
