The National Telecommunications and Information Administration (NTIA) officially upended the approval process and technology focus of its $42 billion Broadband Equity, Access, and Deployment (BEAD) program, which analysts note could put a greater focus on wireless broadband technologies and delay the program’s initial mandate of quickly bridging the digital divide.

NTIA’s updated “reforms” are highlighted by a “tech-neutral approach” that by “removing the preference for a single technology will bring the full force of the competitive marketplace to bear and allow American taxpayers to obtain the greatest return on their investment.”

The previous mandate did not specifically point to a single broadband technology, but was noted by some as being heavily focused toward fiber as the transmission medium. Fiber has been touted by supporters as the most efficient technical way to provide the highest possible data speeds.

Jeff Heynen, VP of broadband access at Dell’Oro Group explained to SDxCentral in an interview that the NTIA changes are being framed as a way to lower the overall cost of the program, but that likely means a shift away from fiber.

“Where fiber may have been competing for a locality or a certain amount of broadband serviceable locations, then it's certainly not going to be the lowest cost option when compared to fixed-wireless or satellite,” Heynen said. “No question.”

The new NTIA rules do maintain the need for approved broadband services to provide at least 100 Mb/s of uplink speed and 20 Mb/s of downlink speed. This does open up options for cheaper-to-deploy fixed-wireless access (FWA) and satellite broadband services.

However, recent updates by satellite broadband giant SpaceX, which is controlled by current/one-time President Donald Trump supporter Elon Musk, could make that option a compelling choice. This includes a recent push to provide free equipment to some low-income users, which tackles one of the long-standing hurdles for satellite-based broadband connectivity.

“It does open up opportunities for them, but then again if satellite is ultimately the lowest cost option in those areas and if NTIA reviews the application and says, ‘nope, we kind of think satellite could be lower cost than that in these areas,’ then, yes, in theory, this opens the door for more fixed-wireless, but because of the low-cost mandate, does it really? I'm not sure,” Heynen said.

Smaller ISPs, states pressured

More pressure could be moved toward smaller Internet service providers (ISPs) that were likely to lean heavily on these BEAD funds to help get their efforts off the ground.

“If the states are going to redo these, and they're going to have these ISPs reapply, then you can also imagine that the biggest ISPs are the ones that will have the wherewithal and the time and the money to go ahead and complete the re-application process, whereas some of the smaller local providers, they've been sitting for a long time waiting, and they just might not have the ability to do that anymore,” Heynen said.

The BEAD program was initiated in 2021, and was part of the federal government’s $65 billion Infrastructure Investment and Jobs Act (IIJA). The BEAD funds are targeted at expanding broadband networks to unserved and underserved areas and to provide ongoing financial support to increase access.

Heynen noted that another likely side effect of the pricing and technology changes is that it could lengthen the approval process. Heynen pointed to states like Louisiana, which have already moved through their approval process, but now will be required to re-open applications toward meeting the new low-cost objective.

“I think they just wanted guidance, and they wanted to get shovels in the ground and these projects going as quickly as possible, because their mandate was to solve the digital divide,” Heynen said of how states are likely to be viewing these program changes. “They went through an election cycle, a lot of the makeup of the governorships and the state broadband offices changed, so maybe there was some pushback during that change, but I'm not aware of it.”

Federal Communications Commission (FCC) Chairman Brendan Carr had ripped the previous administration’s lack of action in translating BEAD funding into actual deployments, noting last year during testimony in front of the House of Representatives’ Committee on Oversight and Accountability that in the more than 1,000 days since the BEAD program has been active, “not one person has been connected to the internet with those dollars – not one home, not one business. Indeed, not even one shovel worth of dirt has been turned with those dollars.”

Is there a fiber upside?

One benefit from the diminished fiber focus is that those resources can now be directed toward the growing need for fiber to connect data centers exploding with artificial intelligence (AI)-generated demands.

“The fiber providers are going to be so inundated here with data center fiber business that it might end up actually working out, because if I was really thinking that there was going to be a real shortfall in fiber availability here because of the combination of these deployments, plus all the data center work, the cabling within the data centers, that was really putting the squeeze on fiber manufacturers like Corning, and Prysmian, and Sterlite, and some of the other cabling providers,” Heynen said.

While admitting that he does not specifically cover that space, Heynen did note that “in talking with those suppliers, that was a growing concern for them in how they were going to manage. Given the limited manufacturing capacity, plus the impact of tariffs, they’ve got all this demand from all these new data centers plus these really long-haul fiber networks to reach rural areas. That's quite a bit of fiber you're talking about.”

The BEAD program's initial fiber lean did lead to a number of initiatives, including government’s “Build America Buy America” (BABA) program, which is targeted at investing funds into products and services built in the U.S. A lot of those early efforts have been on fiber-related components. This has led a number of vendors to increase their focus on domestically produced fiber cables and accessories, which could also help meet supply demands.