Show of Pause: BEAD and Other Grant Programs at the Center of Battles

The $42 billion Broadband Equity, Access, and Deployment (BEAD) program to build broadband in rural America is one of many federal programs in the middle of a pitched partisan battle. The Trump Administration’s Office of Management and Budget sent a Jan. 27 memorandum to all federal agency heads pausing payment on several financial assistance programs and to conduct reviews of those programs, due Feb. 10. Minutes before the order was to go into effect on Jan. 28, U.S. District Court in the District of Columbia ordered a stay of the pause.

According to the latest press reports, the White House has now rescinded the policy in the Jan. 27 memo.

Before canceling the spending pause, the White House released a “fact sheet” clarifying that it was not to apply to all federal assistance across the board, but “is expressly limited to programs, projects, and activities implicated by the President’s Executive Orders, such as ending DEI, the green new deal, and funding nongovernmental organizations that undermine the national interest.”

White House Press Secretary Karoline Leavitt, during a press briefing, added, “This is not a blanket pause on federal assistance and grant programs from the Trump Administration. Individual assistance … will not be impacted by this pause.” She listed examples including Social Security, Medicare and welfare as programs that are unaffected.

However, opponents of the OMB memo continued to question the scope of the order and filed suit in many courts, including the D.C. District Court.

Even though the grant review process started and stopped abruptly, the actions of this week shed some light on what the administration has in mind for BEAD. The program drew Republican criticism during the presidential campaign for its “red tape. Official Washington has been speculating on various steps the Trump team might take to reform BEAD since the election. A renewed effort to review BEAD is likely in coming weeks.

“Instead of focusing on delivering broadband to unserved areas, the [Biden] Administration has used the program to advance a wish list of political goals,” then-FCC Commissioner Brendan Carr said in an Oct. 14 op-ed in the Wall Street Journal. “It has adopted regulations that include diversity, equity and inclusion [DEI] requirements, climate-change rules, price controls, preferences for union labor, and schemes that favor government-run networks. The administration has been handing out wins to favored political groups rather than delivering results.”

The Commerce Department’s National Telecommunications and Information Administration (NTIA) has been setting the rules for BEAD, including DEI, climate change, union labor and other requirements, which states have been required to include in their BEAD distribution plans. Newly appointed Trump officials eventually will review those requirements.

The president’s Commerce Secretary nominee, Howard Lutnick, chairman and CEO of financial services company Cantor Fitzgerald, tackled BEAD questions during his confirmation hearing today (Jan. 29). Lutnick did not directly answer when Senate Majority Leader John Thune (R-SD) asked whether he would work with states “to remove [climate change and other] requirements so that funds can go to truly unserved areas.”

“Let’s go do it, but let’s do it efficiently, and let’s do it swiftly. Let’s use satellites, let’s use wireless, and let’s use fiber, and let’s do it the cheapest most efficiently we can. And I commit to working with you to make sure the states execute and deliver on the promise that Congress has made,” Lutnick said. In response to a Thune follow-up question, Lutnick said he “absolutely” would ensure that states spent BEAD funds on broadband infrastructure builds only.

Howard Lutnick, Trump nominee for Secretary of Commerce during Jan. 29 confirmation hearing.

After more than two years of working with states to develop their distribution, plans NTIA has begun authorizing a few states’ proposals, beginning with Louisiana earlier this month. (Follow each state’s BEAD planning process with NRTC’s BEAD Funding Opportunities map.) But even after gaining NTIA approval, Louisiana Governor Jeff Landry (R) recently wrote to Lutnick urging the Commerce Department to streamline some provisions in the BEAD Notice of Funding Opportunity (NOFO) and make it easier for broadband providers to participate in the program.

Landry’s suggestions include encouraging internet providers to apply for “alternative technology” support on an equal footing with fiber; removing requirements not mandated by the Internet Reduction Act, including the NOFO’s “heavy-handed” requirement to offer a Low-Cost Broadband Service Option, and to eliminate “unnecessary and/or punitive reporting obligations.”

Energy Grant Programs

Grant programs affecting rural electric providers also could be coming under the microscope. One of the large stack of executive orders President Trump signed on Inauguration Day, Jan. 20, was entitled “Unleashing American Energy.” The order claimed that “limited the generation of reliable and affordable electricity, reduced job creation, and inflicted high energy costs upon our citizens.” One of the order’s sections ordered government agencies to “immediately pause the disbursement of funds appropriated through the Inflation Reduction Act of 2022.” The order specifically called for pausing a program to fund electric vehicle charging stations.

The U.S. Department of Agriculture’s Empowering Rural America (New ERA), also authorized through Inflation Reduction Act, is distributing $9.7 billion in support for solar, wind and other clean energy projects. President Biden attracted wide attention last September when he traveled to Vernon Electric Cooperative, Westby, WI, to announce the first 7.3 billion in New ERA awards.

However, so far there has been no specific announcement of a New ERA pause. The Trump Administration may have considered it too late to change New ERA because the program is nearly complete. USDA announced in a Jan. 10 press release that it had distributed 90 percent of the program’s funds.

The day after the inauguration, NRECA CEO Jim Matheson gave Trump a positive rating for the first-day actions affecting the energy industry. They will “set the stage to accelerate oil and gas drilling, expedite the approval of energy development projects, and remove red tape surrounding the federal permitting process,” he said in a Jan. 21 statement.  

Matheson specifically praised both the “Unleashing American Energy” EO and the Trump’s decision to a national emergency on energy, which, he said, acknowledges that the nation’s current energy production is not enough to maintain reliability or meet the nation’s needs.