Draft BEAD program update would give states more leeway to use LEO, FWA services using unlicensed spectrum when more economical than FTTP.

In a March 2023 interview, U.S. Secretary of Commerce Gina Raimondo said, “If we're going to connect every American, including the tens of millions of Americans who now don't have the internet, we're going to have to lay fiber all across this country.” But $43.5 billion in construction subsidies appropriated in the Infrastructure Investment and Jobs Act of 2021 appears insufficient to bring fiber connections to most every American doorstep as with copper telephone lines in the previous century.

Instead, Low Earth Orbit (LEO) satellite and fixed wireless service (FWA) using unlicensed spectrum may have to suffice to fill the many thousands of holes in the Swiss cheese deployment of landline advanced telecommunications infrastructure over the past three decades. That has left a considerable number of discrete locations lacking it or served by older telephone and cable infrastructure that falls short of current federal standards for reliable internet protocol-based voice, video and data service.

That’s the upshot of draft Broadband Equity, Access and Deployment (BEAD) program guidance issued this week by the Department of Commerce’s National Telecommunications and Information Administration (NTIA). Those voids are seen on splotchy federal and state “broadband maps” of existing service where investor owned providers bypassed discrete locations they determined would not produce an adequate return on investment or profit.

While the draft guidance reiterates a preference for fiber to the premise (FTTP) projects in existing program guidance, it permits state subgrants to LEO satellite service providers and ground-based fixed wireless providers using unlicensed spectrum for projects where FTTP would require such a large degree of subsidization (up to 75% of project costs) -- or a lack of interest from service providers -- that states would be challenged to connect all premises to service meeting specifications for minimum throughput and reliability as required by the BEAD program. Accordingly, the draft revised guidance states these “alternative technologies” can to be used when it would be “less expensive” to do so.

Moreover, the draft guidance would bar states from funding projects where LEO satellite or fixed wireless service meeting minimum service specifications already exists or is being subsidized by another government program, which could potentially render large portions of the nation ineligible for BEAD subsidies.

The draft guidance would authorize states to use their grant funds to make subgrants to these providers to help customers pay for non-recurring installation and premise equipment costs, which for LEO service can run several hundred dollars. However, it’s unclear whether these services would meet the existing BEAD program guidance requiring states to ensure subgrant funded projects offer service at rates affordable to low and middle income households.