- With about $20 billion in taxpayer funds on the line, there are bound to be competing views on how to spend it
- The chorus of people wanting states to keep their non-deployment funds includes many Republicans
- The funds could be used to advance AI at the state level
A fight is brewing over Broadband Equity, Access & Deployment (BEAD) funds that will be left over after all the states and territories complete their mission to connect broadband to unserved homes in their locales. These remaining monies – known as BEAD non-deployment funds – could total as much as $20 billion.
The reason for the huge amount of remaining funds is that the Trump Administration changed the rules of the BEAD program in June, requiring states to award most of their bids to the lowest-cost bidders. This has resulted in about half of the $42.45 billion in BEAD funds not being used.
For instance, the state of Texas was allocated $3.31 billion in BEAD funds. Recently, the National Telecommunications and Information Administration (NTIA) approved the Texas Broadband Development Office’s BEAD proposal, which will only require $1.27 billion to connect unserved households.
In late November Texas Senator Ted Cruz wrote, “My work on the Commerce Committee to hold the BEAD program accountable has spared taxpayers from paying for internet to mansions and vacation islands while still securing over $1 billion in funding for Texas.”
But what will become of the remaining $2.94 billion allocated to Texas? Not to mention the remaining $20 billion across all the states and territories?
A November 25 letter from Democrat members of the House Committee on Energy and Commerce said President Trump does not have the authority to use an executive order to withhold BEAD non-deployment funds from states.
“To the contrary, the bipartisan infrastructure law expressly includes eligible uses beyond deployment and mandates that all remaining funds be used to further the BEAD program,” wrote the representatives. “Congress intentionally envisioned a range of acceptable uses of BEAD funds and flexibility for states and territories because barriers to connectivity are different in every community. We urge you to release to each state and territory its full BEAD allocation, including all funds for non-deployment activities allowable under the statute.”
New Street Research policy analyst Blair Levin has previously told Fierce that the general view of state broadband officers is that they don’t expect to receive any non-deployment funds from NTIA.
But Republican politicians, including Louisiana Governor Jeff Landry and West Virginia Senator Shelley Moore Capito want their states to receive the non-deployment funds. Landry says they could be used for AI infrastructure and AI workforce training at the state level.
Barlow Keener, special counsel with Phillips Lytle LLP, told Fierce, “I certainly see the scales leaning in favor of the non-deployment funds finding homes in various needed state AI infrastructure – like MDU fiber buildouts in non-rural areas, towers, AI training.”
Keener said, “I personally think it is likely that the funds will be deployed by NTIA, and not clawed back, because of the significant size of the funds held by states with Republican governors, because the Infrastructure Investment and Jobs Act expressly directs the approved uses (the law has some sway), and because the funds can be targeted to supporting AI infrastructure (towers) and AI interconnection (fiber and FTTH) in addition to AI workforce development.”
In one final twist, Iowa Senator Joni Ernst has introduced a bill to amend the Infrastructure Investment and Jobs Act to require that BEAD non-deployment funds be clawed back from states and used by the U.S. Treasury for deficit reduction. But it's unclear if this bill has any prospect of passing.