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The Trump Administration quickly seized on the management ineptitude within BEAD. It stripped away the harmful policy add-ons and reinstituted the important policy objective of technology neutrality, allowing any qualified technology to be eligible to receive BEAD funding. This reenergized the competitive fight among providers, ultimately connecting more homes at a reduced cost.
Beyond expediting broadband builds, the Trump Administration’s changes have proven so successful that BEAD is likely to produce a major surplus. While state submissions are still being reviewed, the program’s total cost could ultimately come in 30 to 50 percent lower than its budgeted amount, saving upwards of $20 billion or more. Even in D.C., that is real money.
Not surprisingly, creative minds are trying to determine what priorities could use the excess BEAD deployment funds. A leading school of thought is to recognize that the United States is $37 trillion in debt and will run a deficit of $2 trillion this year. The days of surpluses or smaller budgetary deficits are over. With the nation facing such widely acknowledged financial difficulties, the thinking by many experts is that this money needs to be reclaimed. In this scenario, the Commerce Secretary could present President Trump with a huge check reflecting the voluminous savings resulting from this Administration's positive reforms. This would also demonstrate that the Trump Administration is indeed giving American taxpayers a real “Benefit.”
Alternatively, some advocate that the states should be allowed to keep any leftover money to spend on communications-related purposes, some of which are contemplated in the infrastructure law. Draft bills and other ideas have been floated in which the White House would let any leftover BEAD funding be used for a wide variety of different purposes, including some type of Artificial Intelligence infrastructure and education/workforce training. While interesting, valid concerns have been expressed that such a use of funds could be used to subsidize government competition against the private sector in various communications sectors and markets.
Others urge that some portion of the surplus funds be held in reserve to help with future deployment shortfalls. Notwithstanding all the good work being done, it is important to recognize that any calculations of BEAD savings will need to account for the simple fact that not all broadband builds will happen as planned. In other words, some BEAD funding winners (i.e., state-selected recipient providers) will fumble. Despite best intentions, experience suggests that a reserve funding stream could be useful to handle this inevitability.
The Trump Administration finds itself in a very favorable circumstance. With some swift policy changes, the BEAD program has been rightsized and is likely to produce significant savings and at the same time bring Americans robust Internet service. Given the difficult financial circumstances which our country confronts, perhaps the most reasonable course is to return the funds to the Treasury. If this is deemed too bold and the Administration sees fit to allow some use of funds, it would be best that those expenditures be tailored specifically to BEAD’s central mission.
* Michael O’Rielly, a former FCC Commissioner, is an Adjunct Senior Fellow at the Free State Foundation, an independent, nonpartisan free market-oriented think tank located in Potomac, Maryland. He is the host of the “TMT With Mike O’Rielly” videocast. The views expressed in this Perspectives do not necessarily reflect the views of others on the staff of the Free State Foundation or those affiliated with it.
A PDF of this Perspectives is here.
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