Commerce Sec. Lutnick releases new BEAD guidance, with ‘tech-neutral approach’

The National Telecommunications and Information Administration on Friday released its much anticipated guidance for states on the Broadband Equity, Access, and Deployment, or BEAD, program.

The new BEAD guidance, which comes three months after Commerce Secretary Howard Lutnick announced his intentions to “revamp” the $42.45 billion program, features a removal of what Lutnick called “burdensome regulations” imposed by the Biden administration on states and bidding internet service providers. These now-axed stipulations include the program’s labor and employment requirements and its climate reporting requirements. And, as Lutnick promised, the new guidance also includes a move toward a “tech-neutral approach,” dropping the Biden administration’s “fiber first” strategy.

The removal of “fiber first” opens more pathways for states to spend BEAD funds on technologies like low-Earth orbit satellites and fixed wireless. This is a move that some states, like Louisiana, were pushing for.

“Today we proudly announce a new direction for the BEAD program that will deliver high-speed internet access efficiently on a technology-neutral basis, and at the right price,” Lutnick said in a statement shared Friday. “President Trump promised to put an end to wasteful spending, and thanks to his leadership, the American people will get the benefit of the bargain, with connectivity delivered around the country at a fraction of the cost of the original program.”

However, the changes will upend the multi-phased BEAD application process for states, as many are still in the middle of their subgrantee selection processes. According to the new guidance, states and territories are directed “to implement these reforms in their subgrantee selection process to lower costs, speed up implementation, and ensure all technology solutions are considered.”

The NTIA is giving states and territories just 90 days to comply with the new guidelines, including conducting an additional subgrantee selection process referred to as a “Benefit of the Bargain Round,” which the agency said will permit all applicants to compete on a level playing field. States are also required to use a new NTIA-developed tool, the Environmental Screening and Permitting Tracking Tool, or ESAPTT, intended to “significantly reduce the time and effort required for broadband permitting,” according to the NTIA’s news release.

Along with the regulatory changes, the new guidelines also direct states to “rescind all preliminary and provisional subaward selections,” and notify applicants that they must conduct another round of selection. This means that the states that have already received approval on their final BEAD proposals from the NTIA under former President Joe Biden — Delaware, Louisiana and Nevada — have had those approvals rescinded.

Last-minute changes

During a House Appropriations Subcommittee hearing on Thursday, Lutnick teased the new guidance, hinting that states will have to restart some of the process.

“Our objective is as follows: within the next 90 days, I think we’re going to put it out on Friday, basically saying that if your state is willing to just be technologically agnostic, meaning produce the right access at the lowest price, if it’s a tie I don’t care which one you pick, make that application within 90 days, and then this department will put out the money by the end of the year,” Lutnick said. “So, we will go from not having given any money under the Biden administration [to] having the full program funded and distributed.”

According to a statement from Jason Goldman, the NTIA’s acting director of congressional affairs, that was sent to Congress members on Friday and reviewed by StateScoop, the new guidelines were formulated following “a thorough review of the BEAD program, the changing broadband technology landscape, and the need for subsidized broadband infrastructure around the country.”

Lutnick, members of the GOP and several advocacy groups have been critical of the BEAD program and its lengthy rollout. In addition to the fact that states have yet to receive any BEAD funding after three years of planning, some broadband advocacy groups have pointed to overfunding some areas as a potential problem with BEAD.

A recent report from the Advanced Communications Law & Policy Institute at New York Law School found that more than half of locations previously identified as eligible to receive BEAD funds are no longer eligible. The report attributed the changes to continued investment by internet service providers to extend their networks, and additional grant-funded projects via American Rescue Plan broadband funds and the Rural Digital Opportunity Fund, a program the FCC created during Donald Trump’s first presidency.

Mixed reactions

Despite these issues, advocacy organizations and state lawmakers have vocalized concern about substantial changes to the program this late in the game. The Benton Institute for Broadband & Society’s director of policy engagement, Drew Garner, said in a statement that Lutnick’s changes to BEAD “will cement the digital divide for decades,” and notes that his removal of the program’s fiber preference is “shortsighted.”

“He is hurting our economic competitiveness, our healthcare and education, and our ability to work and stay connected with loved ones. He is denying rural Americans access to the modern economy and our increasingly connected world,” Garner wrote. “Secretary Lutnick wants to invest in the ‘cheapest’ broadband infrastructure, not the best broadband infrastructure. It’s a self-inflicted wound to American competitiveness. China and Europe are going all in on fiber to position themselves for AI. Under Secretary Lutnick, America is getting cheap, unreliable networks. That’s the definition of penny-wise, pound-foolish.

“Long-term infrastructure investment shouldn’t be cheap, it should be smart. Fiber-based broadband networks will last longer, provide better, more reliable service, and scale to meet communities’ ever-growing connectivity needs. NTIA’s new guidance is shortsighted and will undermine economic development in rural America for decades to come.”

Michael Santorelli, a director at the Advanced Communications Law & Policy Institute at New York Law School, said that Lutnick’s removal of regulations may appear to make things easier for states, but the proposed 90-day timeline might be burdensome. And states that have already had their final proposals approved may file lawsuits, he guessed.

“That’s a that’s a huge lift,” Santorelli said. “I mean, after all these years of planning, careful planning, and you know, over 40 states have already completed or are almost done with their bidding. Now they have to go back and do it again. It’s just like taking a huge eraser to the majority of the work that states have done over the past couple of years.”

‘Outraged’

Sen. Jacky Rosen, D-Nev., said in a statement Friday that she was outraged at the rescinding of Nevada’s approved BEAD funds, adding that she was going to put a hold on all Congressional nominations for broadband policy positions at the Commerce Department and “block their expedited confirmation, until Nevada gets its BEAD funding.”

“I’m beyond outraged that the Trump Administration has moved the goal post yet again and rescinded Nevada’s approval to get the BEAD funding I secured to connect the hardest-to-reach communities in our state to high-speed internet,” Rosen said in the statement. “This decision will put Nevada’s broadband funding in jeopardy, and it’s a slap in the face to rural communities that need access to high-speed internet.”

The changes are receiving praise from some groups. David Zumwalt, the president and CEO of the Wireless Internet Service Providers Association, commended the program’s updates. In a statement shared with StateScoop, he said the changes will help return BEAD to the intended impact, as outlined in the Infrastructure Investment and Jobs Act of 2021. The changes will “accelerate the deployment of connectivity” by allowing other non-fiber technologies to receive consideration, he said.

“By prioritizing cost-effective, quickly deployable solutions that meet the IIJA’s baseline technical standards, the new Policy Notice eliminates the harmful delays – as well as the higher capital and operating costs — arising from BEAD’s prior positioning as a fiber-first program. It never needed to be, nor should it have been, that way,” Zumwalt wrote. “The new guidance opens the door to all qualified technologies that deliver reliable broadband — fixed wireless, fiber, satellite, and others —ensuring that unserved Americans can get connected faster and more affordably.

“This guidance returns BEAD to the intent of the IIJA and will benefit communities across the country. Thank you, Secretary Lutnick and NTIA, for your hard work and efforts to make BEAD a successful program. WISPA welcomes this much-needed shift in direction.”

States’ hopes

While contending with the looming changes to BEAD, several state broadband chiefs said during the Fiber Broadband Association’s FiberConnect conference in Nashville this week their offices have been slowly moving ahead with the program over the last several months. Rebecca Dilg, director of the Utah Broadband Center, said Monday that waiting on this updated guidance was “frustrating,” and Glen Howie, the Arkansas state broadband director, said Wednesday that flexibility would be key to any changes made to the federal BEAD program.

Joseph Le, the deputy director of broadband development with the Kansas Department of Commerce, said Wednesday that he was hoping the “guidance comes out as quickly as possible” — a wish that appears to have been granted this week.

He also said he hopes the new guidance will provide states flexibility to tackle their own unique issues in closing the digital divide.

“A lot of us are trying to move as fast as we can, keep our foot on the gas with the program, get the funding out the doors to our communities, to our industry partners, and we’re hoping the changes that essentially would come are going to be changes that hopefully allow us to be streamlined in such a way that allows us to maintain this speed,” Le said. “So, we really would hope that whatever the guidance comes out from, from up top, is going to be something that allows the state to continue to move in a streamlined fashion.”

Le added that additional delays would “devastatingly impact communities or industry partners from participating in the program.”

“I think one of the things that could certainly negatively impact states is very hard line restrictions that are blanketed across the entire country, all 56 states and territories,” he said. “Because whatever the guidance comes out, one of the things that I think needs to be very well understood is whatever may work for one state is not going to work for the state of Kansas, and it’s not going to work for the state of Arkansas or Texas or Mississippi or Minnesota or anything like that.

“So we’re hoping that there is some latitude that will be allowable in whatever the new guidance terms for us to continue to move in each of our own individual states and territories.”