States will likely need additional federal funding to attain universal service under BEAD Five-Year Action Plans

The National Telecommunications and Information Administration’s (NTIA) Broadband Equity, Access and Deployment (BEAD) program – part of the Infrastructure Investment and Jobs Act (IIJA) – requires states that received planning grants in 2022 to develop “Five-Year Action Plans” in 2023 that will inform their requests for $42.5 billion in grants to subsidize advanced telecommunications infrastructure.

The plans must include “a comprehensive, high-level plan for providing reliable, affordable, high-speed internet service throughout the (state) including the estimated timeline and cost for universal service.” Additionally, the plans must include planned utilization of federal, state, and local funding sources to pay for it.

As with any infrastructure, it won’t come cheap. Hence the $42.5 billion BEAD allocates to states to subsidize construction costs. But BEAD also requires states to "rigorously explore ways to cover a project’s cost with contributions outside of the BEAD program funding." In developing their Five-Year Action Plans, states will have to determine to what extent they will have to cover shortfalls by, for example, issuing long term bonds to finance construction. 

And whether they will legislatively mandate universal service, requiring existing investor owned providers honor connectivity requests at serviceable addresses as proposed California legislation would do by deeming Internet service a public utility and establishing state policy of digital equity as a right of access. Or to fund public or consumer utility cooperative owned fiber to the premise (FTTP) infrastructure as a means of ensuring digital inclusion and equity as required by BEAD given challenges faced by investor owned providers that frequently scale back deployment plans to accommodate their business model constraints.

It's likely states could conclude that in order to attain universal service, they will need additional federal funding. That is evidently contemplated in BEAD. As part of their Five-Year Action Plans, states must detail technical assistance and “additional capacity needed for successful implementation of the BEAD Program.”