Rural broadband providers have “shovel in hand” for projects to increase Internet speeds for rural communities, but are experiencing delays due to the federal government, says Jason Williams, CEO of Blackfoot Communications in Montana and chairman of U.S. Telecom. (Courtesy Blackfoot Communications)

Service providers protest further federal delays

The federal government intends to award funding to all rural broadband expansion programs by the end of the year, the U.S. commerce secretary says. The national trade association for service providers says states should be in the driver’s seat in the face of federal delays.

Howard Lutnick, secretary of the U.S. Department of Commerce, testified June 4 before the Senate Appropriations Committee. He said the department plans to issue a notice of funding opportunity “shortly,” expecting companies to apply within 90 days of its release.

Under the Biden administration, the Infrastructure Investment and Jobs Act in 2021, the Broadband, Equity, Access and Deployment Program (BEAD) provides $42.45 billion to states and territories to expand high-speed Internet access.

Lutnick said the latest applications would be done without regard to favoring one technology over another.

“Just make sure we’re getting the benefit of the bargain — what’s the cheapest way to get broadband to these people, the most efficient way to do it?” Lutnick said. “You had the Biden administration sitting on it for 30 months, and you’re going to watch us distribute the money and get it out the door, provided the applications are technologically agnostic — just do the right thing for the American people. Let’s get the broadband to the people for the most efficient way and we will put out the money.”

U.S. Telecom, the national association representing service providers, suppliers and manufacturers, issued a statement following Lutnick’s testimony.

“Unserved rural communities have waited far too long for the BEAD program to deliver their long-promised broadband,” the organization stated. “America’s broadband providers are ready to get shovels in the ground to connect these communities now, delivering the most powerful and cost-efficient technology for the long-term.”

U.S. Telecom added that most American rural communities and their state leaders have made “clear” that fiber would best prepare them “to have their rightful place in America’s economic future.”

“We cannot let them down with further delays, less reliable technologies or slower speeds,” the organization stated. “The states should be in the driver’s seat when it comes to these decisions, not Washington.”

Michael Wynschenk, CEO of Hunter Communications in southern Oregon and northern California, said the accelerated timeline is encouraging in theory.

“Funding by the end of 2025 is what we all want,” he said. “But a potential 90-day reapplication process introduces major uncertainty. States have already spent years designing tailored broadband plans to fit their states’ needs.”

In some cases, states already completed their bid process in a way that achieved high-speed broadband under budget, Wynschenk added. 

“Asking them to restart the process, even partially, risks undermining all that work and could cause confusion or push projects even further down the line,” he said. “We don’t believe that starting from scratch does anything to get rural consumers broadband, and we hope any guidance builds on the existing work already done.”

‘Screeching halt’

Jason Williams, chair of U.S. Telecom, is also CEO of Blackfoot Communications, which operates in western Montana and eastern Idaho.

Various Montana service providers went through a “robust” state process to determine the best way to get high-speed service, Williams told the Capital Press.

Williams’ company submitted a plan to the Department of Commerce, which was approved, and submitted applications for funding to the Montana broadband office, alongside other providers, Williams said. 

The company was negotiating final terms in January when the whole process “came to a screeching halt,” when the department announced they would change some rules around the program.

“Now here we sit, nearly six months later,” Williams said. “There’s a lot of providers in Montana that have shovels in hand. We are ready to go, we’re just waiting for the federal government to give us the thumbs up.”

Different states are in different phases of development of the BEAD program, Williams said. Most have ceased their work as they wait on the federal government to make a decision, he said.

“Some states were more aggressive in building out (broadband) than others,” Williams said. “In states like Montana, where we have more cows and grizzly bears than people, it’s a much bigger chore.”

Fiber vs. satellite

Part of the delay is due to the Trump administration’s shift to a more technologically neutral approach, with a push to provide more funding to satellite-based broadband instead of fiber-based broadband, Williams said.

Satellite has its place, particularly in remote locations, Williams said.

Blackfoot intends to decommission and shut off its aging copper-based Internet network as it upgrades to fiber optics. It would take 20 years and $300-$400 million.

BEAD funding allows the company to accelerate its upgrades, Williams said.

“The upfront cost of putting fiber in the ground and then connecting it to the Internet is probably more than satellite service,” he said. “But after that, it provides connectivity literally for generations. In the long-term, it makes the most sense.” 

With so many advances in artificial intelligence, higher-capacity applications are likely needed in the future, Williams said. Fiber is “future-proof,” he said.

“Whatever capacity of Internet speed that consumers or businesses might need, fiber can deliver on that,” he said. “Other technologies — fixed wireless and satellite —  are always going to be limited by physics. There’s only so much bandwidth you can push over the airwaves. With fiber, they just shoot the light faster across the glass or they use different colors of light or different technology.”

“Fiber should remain the preferred technology where feasible, states should retain flexibility and power, and there must be ongoing transparency from NTIA and federal agencies,” Wynschenk said. “This isn’t about just any infrastructure or technology, it’s about securing the future of rural communities and ensuring they aren’t left behind in the digital economy.”

Wynschenk’s company supports getting rid of mandates such as a $30 low-cost offering. Customers will retire installation, maintenance and support long after construction is complete, he said. Pricing plans that low put undue pressure on the provider, and would have long-term negative impacts on those participating in the program.

“That said, we should all be focused on moving forward as quickly as we can,” he said.

‘Time is of the essence’

It’s important in locations like Montana and Idaho to move quickly before winter, Williams said.

“The longer the government waits to give us the go-ahead with the program, the more delay we have in getting construction,” he said. 

The company could continue construction into October or early November, but “if we don’t get approval now, we probably won’t be able to begin construction this year at all, and then we’ll have to wait until next year,” he said.

It could even take until 2027 to locate contractors to do the work, he said.

The largest costs are labor, heavy equipment and raw materials. In the last five years, Blackfoot’s fiber construction costs have doubled, Williams said.

“Time really is of the essence here, so we can get started on all of the preconstruction activities we need to do,” he said.

Williams encourages the federal government to defer to the states that have already been putting in the work.

“Montana is a handshake state, we can still get stuff done — we spent the last 18 months at a variety of roundtables and public hearings getting this all mapped out and we’re ready to go,” he said. “I really just wish the federal government would say, ‘In places like Montana, where you guys have got it all figured out, let’s just go ahead and let you do it.’”

“Delays in the BEAD program will have real consequences for rural providers who have invested their own capital to create shovel-ready projects sponsored by communities and key institutions,” Wynschenk said. “These are complex, difficult builds, impacted by weather and workforce availability. It is not like walking in a dark room and flipping on a light switch. Meanwhile, the real losers with delays will be the families, farmers and small businesses lacking reliable, fast, safe and affordable internet.”