$42 Billion BEAD Program Duplicates Existing Gov’t Spending, Closes Digital Divide for Vacation Homes and D.C.’s National Zoo

WASHINGTON, D.C. – Today, the U.S. Senate Commerce Committee under Ranking Member Ted Cruz released its fact-finding report on the single largest pot of federal money ever allocated for broadband—the $42.45 billion allocation for the Broadband Equity Access and Deployment (BEAD) Program. Although the Biden administration promised to provide every single American with internet access, and made BEAD the administration’s signature Bidenomics program, this report highlights why this promise already rings hollow. The report found significant duplication with existing federal internet infrastructure programs and a high potential for waste, fraud, and abuse. The report also recommends how to course-correct before this funding is spent.

For example, the report finds that Washington, D.C., and Delaware, both geographically small with dense populations, received more than $547,000 and $52,000 per unserved location. For context, according to the FCC map one-third of so-called unserved locations in Washington, D.C. are located in the Smithsonian National Zoo. 

Furthermore, the administration has layered requirements that will drive up overall program costs, burn through funding, and could in turn leave significant numbers of unserved Americans without access. Specifically, Biden administration rules are heavily biased towards expensive fiber projects and discourage alternative more cost-effective technologies like high-speed satellite. This bias becomes even more concerning since some areas set to be funded include beachfront properties, mountain vacation homes, and remote islands, as well as Delaware's own Biden Environmental Training Center.  See report for photos: FULL REPORT

Senator Cruz wrote in the report’s Executive Summary:  

“Now that NTIA has made BEAD allocations, however, it appears that the program will waste billions of dollars in duplicative subsidies and divert funds away from truly unserved rural areas. Forty-two billion dollars is more than enough money to deliver broadband to every American...

“Will it succeed in doing so? In light of these findings, count me skeptical. This report should serve as a call to action for the Biden administration and the states to ensure BEAD dollars are not funneled to duplicative and wasteful purposes, and instead are used to solve the nation’s connectivity challenges once and for all.” 

Key report findings: 

1. The Biden administration’s BEAD allocations provide ten states and territories more than $10,000 per unserved location—including a galling $547,254 per unserved location in Washington, D.C. 
2. Because the BEAD program did not consider whether a location would be served in the near future through funding from a previous federal program, it allocated funding to over five million locations that are already being funded by other federal programs. If funding from other programs had been considered, seven states would have had zero unserved locations. As a result, the billions in taxpayer dollars sent to these states will be diverted to purposes other than connecting unserved Americans. 
3. The Biden administration’s technology bias against non-fiber broadband will drive up costs by billions of dollars and likely deprive some communities of any broadband access at all. Further, some of the “unserved” locations that will receive taxpayer-subsidized fiber-to-the-home service include mansions, beachfront resort communities, and mountain vacation homes. 

The report concludes with the following recommendations, “Although the unprecedented $42.45 billion in BEAD funding should be more than sufficient to bring broadband connectivity to every last household and business in America, the country cannot achieve this goal if the Biden administration wastes money through unnecessary, duplicative spending and anti-competitive, anti-consumer technology bias. Specifically, taxpayer dollars should not be used to: 

1) Overbuild areas that already have broadband service or are slated to receive support from other federal or state programs. 

2) Fund unnecessarily expensive solutions. The administration’s technology bias is not only inconsistent with the text of the law but is likely to lead to overspending at the expense of connecting unserved communities. 

Read the full report HERE.

 
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