O’Rielly’s TMT Whiteboard: Trump Should Consider Rewiring BEAD
Commentary by Michael O’Rielly
There are few times in Washington when policymakers can pursue major course corrections. Typically, once legislation is signed by the President or regulations issued by an agency, everyone shifts attention to another problem or focuses on self-congratulations. Thankfully, we are at that rarest of moments when it’s entirely appropriate for President-elect Trump to demand a complete recalibration of many of the Biden Administration’s decisions. In the telecom space, the most likely candidate is the Broadband Equity Access and Deployment program, or BEAD.
If ever there was a program most deserving of ma- chete treatment, it’s BEAD. After three years and not one household benefiting from the program, BEAD comes with a boatload of extracurricular mandates that exceed legality, logic or feasibility. Simply put, the Biden Administration shot for the moon believing its BEAD decisions were unchallengeable and unrepealable. Surprisingly, there was little acknowledgement that many broadband providers could shy away from expansive participation, leaving many states with lukewarm pools of bidding partners. Turns out, providers rightly realized that government subsidies aren’t free when strapped with grenades.
In fairness, the National Telecommunications and Information Administration (NTIA), which is charged with implementing BEAD, is not completely to blame for the current predicament. A small group within Con- gress built the broadband beauty contests and even added several mandates of their own as part of Biden’s underlying infrastructure law. But not to be outdone, NTIA interpreted the law to magically create costly obligations and fulfill the Administration’s telecom bucket list. Poof: long rejected concepts were relabeled as “grant conditions.” In some key areas, it completely ignored the exact wording of the statute. Its leaders also filibustered Congress at oversight hearings and rejected pleas to be reasonable.
With fresh eyes and a different philosophy, the Trump Administration has the chance to ditch BEAD’s harmful policy calls. To effectuate, Trump officials can issue instantaneous waivers or suspend NTIA’s dreadful conditions pending reconsideration. That way, changes can be immediate, rather than contingent on completing a lengthy regulatory reversal process. If officials want to be even bolder, there is the option to suspend all pending BEAD application cycles and dismiss any state trying to include extraordinary mandatory commitments or scoring preferences.
Substantively, at least six BEAD conditions need to be tossed in the dumpster. Top of the list is NTIA’s arm-twisting of states to impose and set specific rates for low-cost broadband tier offerings – despite Congress explicitly prohibiting rate setting. Connectedly, officials should prioritize nixing NTIA’s directive
that states set and obtain commitments for arbitrary and unsustainable rates in BEAD point systems. NTIA’s highly objectionable venture into rates also served as a back door to push its affordability goals onto broadband providers. But it’s Congress’s role to enact and fund such social spending — if it decides to do so.
Next up, it’s a five-way tie of “conditions” that need to go. The Trump team should erase net neutrality, open access, labor giveaways to appease unions, overrides of state government-owned provider exclusions, and inflexible Buy American equipment and network requirements. Canceling the intolerable BEAD provisions could renew broadband provider interest in state bidding processes.
The hardest nut to crack for the new Administration likely will be what to do with NTIA’s fiber-first preference. Besides violating the law’s technology neutrality requirement, many states are finding it expensive. This is counterproductive when cheaper technologies are comparable for pending needs. At the same time, shifting away from fiber favoritism could take considerable time — filled with litigation — delaying broadband buildouts for months or even years. Perhaps a further relaxation or clarification of the alternative technologies structure, rather than a complete rebalancing act, should be a priority.
The Biden Administration miscalculated and overdosed on liberalism with its BEAD approach. President-elect Trump and his team have a chance to fix a program that is behind schedule and chocked full of unnecessary mandates. For the sake of Americans without broadband access, let’s hope for a serious redo during this very unique time in Washington.
(Michael O’Rielly is a former FCC Commissioner and congressional staffer who serves as President at MPO- Rielly Consulting. His views do not necessarily reflect the views of Cablefax.)