Preserving technology neutrality to achieve universal broadband deployment

The US Department of Commerce National Telecommunications and Information Administration (NTIA) recently released a Notice of Funding Opportunity (NOFO) setting the ground rules for $42.5 billion in Broadband Equity, Access, and Development (BEAD) Program grants made available under the Infrastructure Investment and Jobs Act of 2021 (Infrastructure Bill). While BEAD grants will be administered by state broadband offices, NTIA sets the framework under which these funds are made available to states, which then make subgrants to broadband providers and other entities committing to extend broadband to unserved and underserved communities.

There is much to celebrate in NTIA meeting its first milestones under the Infrastructure Act. NTIA’s focus on deploying broadband to unserved and underserved communities and guidance on digital equity programming is commendable and consistent with Congress’s goals in enacting the program.

However, a strict interpretation of the BEAD Program NOFO’s prioritization of end-to-end fiber deployments threatens to undercut the anticipated benefits for Americans on the wrong side of the digital divide, especially in the hardest to reach communities.  

Here's why. NTIA directs states to prioritize funding for “a project that will provision service via end-to-end fiber-optic facilities to each end-user premises.” NTIA claims that “[a] project that will rely entirely on fiber-optic technology to each end-user premises will ensure that the network built by the project can easily scale speeds over time to meet the evolving connectivity needs of households and businesses and support the deployment of 5G, successor wireless technologies, and other advanced services.” NTIA presents no evidence supporting its claim that end-to-end fiber is the only network architecture capable of easily scaling to meet evolving connectivity needs. As we noted in our recent paper, future proof is not synonymous with end-to-end fiber — many other technologies can be used to deploy cost-effective high-speed broadband meeting the future needs of US households and businesses.

With NTIA’s approval, a state can provide a BEAD subgrant to an internet service provider (ISP) deploying an otherwise compliant alternative technology that is less expensive than end-to-end fiber; however, NTIA also directs states to set open bids (the “Extremely High Cost Per Location Threshold”) for deployment subgrants “as high as possible to help ensure that end-to-end fiber projects are deployed wherever feasible.” Less expensive alternative technologies can be funded when no end-to-end fiber proposal is submitted or an end-to-end fiber proposal is submitted that is above the Extremely High Cost Per Location Threshold. Only then is a state “directed to seek out the most robust, affordable, and scalable technologies” for funding.

Under the NTIA BEAD NOFO, states that can demonstrate that they have a plan for bring affordable, high-speed broadband to all unserved and underserved locations within their jurisdictions may also allocate funding to a wide range of non-deployment activities, such as remote learning or telehealth services/facilities, digital literacy programs, workforce upskilling, community outreach, and direct subsidies for use toward broadband subscriptions. However, if states must set funding amounts for broadband deployments “as high as possible to help ensure that end-to-end fiber projects are deployed” without respect to “feasibility” then it is likely that insufficient BEAD funding will remain available to help unconnected Americans overcome barriers to broadband adoption and use.

Data in our recent paper shows that disproportionately favoring end-to-end fiber deployments could exhaust all available government funding, leaving millions of US households without broadband and with limited funding to address the broadband adoption divide, which is much bigger than the access divide.

With so much funding at stake, the NTIA BEAD Program NOFO also could distort the competitive marketplace, at the expense of scores of innovative US companies manufacturing and deploying scalable cable, fixed wireless, and satellite technologies that are already connecting millions of Americans. The NOFO also could undermine US global competitiveness on internet connectivity solutions, as the US market has always been the lynchpin of success for telecommunications equipment and device manufacturers.

To appropriately balance program goals, NTIA should clarify that states have the flexibility to declare that end-to-end fiber deployments are not feasible if they cost more than a specified amount per home passed (thereby clarifying that states can place a reasonable upper limit on the Extremely High Cost Per Location Threshold). This will give states the flexibility to direct BEAD grants to network operators deploying alternative lower cost technologies where end-to-end fiber is infeasible and optimize program funding across availability and adoption programs.

If NTIA does not issue this clarification, what else can states do to mitigate these impacts? Fortunately, other less restrictive sources of federal, state, and local funding, such as those established under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Consolidated Appropriations Act (CAA), and the American Rescue Plan Act (ARPA), can be used for technology-agnostic broadband deployments in unserved and underserved communities. States can use these sources of funding for high-speed broadband deployments in low population density rural areas where fiber may not be the most cost-effective solution – the very places that are most likely to be unserved today. By exhausting these funding sources first, states will reduce their need to use BEAD funding for network deployments and free up more of it for efforts to increase broadband adoption.

While surely a well-intended attempt to bring affordable high-speed connectivity to America’s unconnected households and businesses, if interpreted too strictly, the NTIA BEAD Program NOFO’s end-to-end fiber requirements could upend three decades of technology neutral and competitively neutral decision-making, policy making that has promoted competition and technology innovation in the U.S. telecommunications media and technology sector. We cannot afford to risk undermining innovation, reducing domestic and global competitiveness, wasting limited government funding, or, most importantly, harming consumers.