Reforming BEAD: A Vision for a More Competitive, and Efficient Broadband Future
As our nation strives to expand high-speed internet to every corner of the United States, the Broadband Expansion Access, and Deployment (BEAD) program has emerged as a critical component of this effort. The BEAD Program is part of a once-in-a-generation federal investment in broadband infrastructure intended to connect all Americans to scalable, next generation networks. But as we work toward expanding access, we must ensure that the program is adequately structured to achieve its goals, promote competition, streamline deployment, and avoid unintended financial and administrative burdens.
Yesterday, Secretary Lutnick took a notable step in signaling a major overhaul of the program. Coupled with Congressman Hudson’s new Speed for BEAD bill, I am hopeful that these commonsense reforms will speed deployment and achieve the telecommunications industry’s goal of bridging the digital divide.
To achieve universal connectivity, we urge Congress and the Administration to focus on four key principles: ensure all resources allocated go directly to deployment of networks, embrace a competitive tech-neutral approach that delivers the highest quality broadband to the unserved, remove barriers to deployment, and ensure that BEAD and other deployment grants are not taxed.
Using Allocated Resources to Bolster and Deploy Networks
During yesterday’s Energy and Commerce hearing, members of Congress and witnesses did an excellent job of encouraging reforms to the BEAD program that ensure the focus is on building networks. These reforms will help ensure every dollar goes to building out networks capable of gigabit and above broadband service and will also make the program more attractive to participate in, creating a more competitive process.
In addition to these reforms, the question of what to do with excess funds was also addressed. As a former Congressman, I understand the need to be a good steward of taxpayer resources and that’s why I believe it’s imperative these funds go directly to building every part of the network. When the BEAD program was codified, the network infrastructure needs were much different. As a COVID-era program, it focused on bridging the digital divide and ensuring every unserved and underserved community was connected. While that mission is still critically important, a new need has emerged — increased network capacity and infrastructure to support and fuel AI capabilities. We believe states should have the flexibility to direct any excess resources toward strengthening networks that connect to the last mile and bolster these essential AI corridors.
A Tech-Neutral Approach to Promote Competition
Our membership represents an all-of-the-above approach when it comes to technology and delivering vital high-speed broadband services. INCOMPAS members, like Zayo, are building fiber networks across the country. Tarana Wireless is deploying their next generation fixed wireless solution in every state, and Amazon’s Project Kuiper will connect especially hard to reach communities through their lower earth orbit satellites. All of these technologies should be eligible for funding if they can demonstrate to state broadband offices that they can meet the needs of the community. By allowing a diverse range of solutions, we increase the chances that rural and underserved areas will get the internet access they need, while also creating a competitive marketplace that drives down prices and accelerates innovation.
Fiber is the backbone of connectivity, but we recognize that it’s not always cost effective to deploy in certain terrains or circumstances. By leaving room for a variety of deployment models, we will allow the states to choose the best, long-term solution for their unique needs, ensuring faster, more effective outcomes for all.
Streamlining Deployment by Removing Regulatory Hurdles
While funding is critical to expanding broadband access, it is only part of the equation. Too often, providers face long delays in obtaining permits, navigating local zoning laws, and dealing with complicated right-of-way processes and negotiations. These regulatory barriers create unnecessary costs and delays, particularly for smaller, regional broadband providers who may not have the resources to navigate complex local and state bureaucracies.
To unlock the full potential of BEAD, we must streamline the deployment process by removing regulatory hurdles. This includes simplifying permitting processes, eliminating unnecessary red tape, reforming pole attachment and replacement rules, and encouraging local governments to work in partnership with broadband providers rather than standing in their way.
One specific issue INCOMPAS members have been working on is streamlining deployments across railroad crossings. From onerous costs to long wait times, the railroads have been a huge impediment to our members. For example, we have a member operating in the western states who was charged $40,0000 for one crossing after waiting more than a year on their permit. Last year, another member was building 455 miles of fiber in Georgia and applied for roughly 1400 permits with Army Corps, state rights of way, municipality rights of way, and the rail roads. After 18 months, out of those 1400 permits they were still waiting on five — all railroad. These examples don’t even scratch the surface of what our providers have had to deal with. That’s why we have been working with members in the House and the Senate to fix the problem through a bill that puts a shot clock on the approval process and ensures broadband and telecom providers are charged fair and reasonable costs. This will not only speed deployment, but it will ensure that BEAD and other federal grant money will stretch as far as possible and actually go toward building out networks rather than paying railroad ransoms.
Ensuring BEAD Grants Are Not Taxed
Another issue that threatens the success of federally funded deployment projects is the possibility that federal grant funds, intended to help expand broadband infrastructure, could be taxed. The government’s role in providing grants for broadband expansion is a critical part of our nation’s effort to connect underserved and rural areas.
One of our newest members, Alabama Fiber Networks (AFN) is building 6600 miles of fiber across every single county in Alabama. This has been made possible in large part due to federal funding and they have allocated every single cent of those resources to deployment and their operation. If they were to be taxed on the $264 million in grant money, AFN would be on the hook for nearly $45 million, nearly 20% of the amount of money to complete the build. That would take a huge toll on their mission and prevent them from finishing their project.
Thankfully, Senator Moran, Senator Warner, Congressman Kelly, and Congressman Panetta are leading a bill, the Broadband Grant Tax Treatment Act, that would ensure these funds are not taxed. These funds are designed to support the development of broadband infrastructure in areas where it is most needed, and imposing taxes on them would undermine the program’s ability to deliver tangible results. INCOMPAS proudly supports this effort and encourages Congress to include it in the upcoming reconciliation package.
Conclusion
The BEAD program is a monumental opportunity to expand broadband access, but its full potential will only be realized if we take steps to reform it in ways that promote competition, streamline deployment, and ensure that grant money is not taxed. By bolstering AI corridors, permitting the use of alternative technologies for those hard-to-reach areas in every state, removing regulatory hurdles, and protecting the tax-exempt status of these funds, we can build a broadband infrastructure that meets the needs of all Americans, creates jobs, and supports economic growth for decades to come.
As we continue to work toward closing the digital divide, it is crucial that we remain focused on solutions that allow innovation and competition to flourish. Let’s ensure that BEAD works for the American people by making these reforms a priority. The future of our nation’s broadband infrastructure depends on it.
