D.C. Memo: Study – Lutnick Could Save Taxpayers $25B in Unneeded BEAD Money

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Billions: Anyone on Capitol Hill need $25 billion to plug a budget hole? A new study yesterday showed that Trump administration changes to the $42.45 billion BEAD program – specifically, NTIA’s decision to expand participation by Unlicensed Fixed Wireless (ULFW) operators – could dramatically shrink the size of the money needed to close America’s digital divide. Commerce Secretary Howard Lutnick announced the new rules on June 6. The study, released by Alex Karras and Michael Santorelli at New York Law School, concluded that the numbers they crunched produced “leftover BEAD funding ranging from $11 billion to $25 billion.” What happens next? “Should unspent funds of this magnitude remain after deployment goals are met, the question then becomes what will be done with them. It remains to be seen whether NTIA will attempt to claw back those funds and try to return some or all of it to the Treasury,” Karras and Santorelli said. (FWIW: Texas Comptroller Glenn Hegar (R) has previously said his state might return nearly $1 billion in unneeded BEAD funds.) After reviewing the data, the Karras-Santorelli study found that ULFW participation would shrink the number of BEAD locations on the map by either 13% or 15%. Reliance on a 15% reduction would leave about 4 million broadband serviceable locations (BSLs) remaining. (West Virginia was not included). “Taken together, these data mean that the total number of BEAD-eligible locations in the U.S. will have decreased by upwards of 65% since June 2023,” Karras and Santorelli said. Whether the result is 13% or 15% will need to await the number of locations added to the BEAD map as a result of ISPs that defaulted on their Rural Digital Opportunity Fund (RDOF) commitments. (More after paywall.)