D.C. Memo: What Were Rosston and Wallsten Thinking on State BEAD Spending?

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BEAD: What were esteemed policy analysts Gregory Rosston and Scott Wallsten thinking? Where is the BEAD network goldplating by the states that they said was inevitable? In July, the two Ph.D economists offered a critique of NTIA’s revised BEAD rules released by Commerce Secretary Howard Lutnick on June 6 (see: New BEAD Rules Enable Efficient Spending But Make it Pointless to Try.) Rosston (Stanford) and Wallsten (Technology Policy Institute) theorized that states would spend as much as possible once they realized leftover funds could not be redirected elsewhere. In a thought experiment, Rosston and Wallsten said states were like consumers told to buy a car with a fixed budget provided for free: If they can’t pocket the savings, they’ll load up on a luxury Lexus instead of a utilitarian Honda Civic, wasting resources in the process. “NTIA has ensured that every state official should choose the Lexus. NTIA can fix this by letting states keep savings for other broadband priorities. Until then, taxpayers will pay Lexus prices when the Honda would have been just fine,” Rosston and Wallsten said. (More after paywall.)