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by jan

Can we please keep our broadband money, Republican governor asks Trump admin [arstechnica.com]:

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Louisiana Governor Jeff Landry has a simple request for the Trump administration: Don't take our broadband money away.

Trump's Commerce Department rewrote the rules of the $42 billion Broadband Equity, Access, and Deployment (BEAD) grant program, forcing states to change how they spend money earmarked for expanding broadband access. The overhaul led states to reduce spending on fiber networks and increase spending on satellite—although not to the extent sought by SpaceX CEO Elon Musk, who is demanding more money [arstechnica.com] for his Starlink network.

Since states are spending less on deployment, and the program still has the $42 billion allocated by Congress, what happens to the leftover amount after money is spent on deploying broadband networks? Amid speculation that the Trump administration wants to return that money to the US Treasury, Louisiana's Republican governor is worried that states won't be able to use the full $42 billion. It's possible that half or more of the $42 billion won't be used to expand broadband.

"As the first state to submit our Final Proposal ahead of the September 4th deadline, we respectfully request that you continue to hew closely to the statute by directing that remaining BEAD allocations be invested in state-led initiatives, subject to NTIA [National Telecommunications and Information Administration] review, that advance the following key national priorities," Landry wrote in a Monday letter [arstechnica.net] to Secretary of Commerce Howard Lutnick.

The US law [congress.gov] that created BEAD is clear that the money can be used for more than sending subsidies to Internet service providers. The "key national priorities" specifically cited in Landry's letter were Trump's "AI Action Plan" along with Trump's "America First" and "Make America Great Again" plans for investing in education, workforce training, and growing US industries.

Request paired with praise for Trump admin

Landry's letter praised Lutnick's overhaul of BEAD, stating that "you have delivered in only a few months what the Biden NTIA failed to deliver in over three years of paperwork, endless reviews, and the piling-on of unnecessary and in some cases illegal regulatory burdens." The changes, Landry wrote, mean that "Louisiana and many other states will have significant remaining funds that can be further invested to advance the Administration's priorities."

Lutnick's letter said the non-deployment grant awards should "only include projects that advance" the Trump administration's goals he cited. But under the law, states should be able to use BEAD funds to make broadband more affordable.

Specifically, the BEAD law says that states may award grant funds for "broadband adoption, including programs to provide affordable Internet-capable devices," and "any use determined necessary by the Assistant Secretary [of Commerce for Communications and Information] to facilitate the goals of the Program."

Helping people with low incomes afford the broadband services deployed with the grant money would be an obvious contender for any use necessary to facilitate the goals of the program. That's especially true after the Trump administration told states [arstechnica.com] they will be shut out of the fund if they try to set the rates that ISPs receiving subsidies are allowed to charge people with low incomes.

But instead of making a pitch for broadband affordability, Landry offered flattery in an attempt to make the funds available for other Trump priorities. Landry's letter seems to suggest a possible headline for a future press release that the Trump administration could issue to tout its stewardship of BEAD funds:

This approach would vividly demonstrate the business and financial savvy that is a hallmark of your department and the Administration overall: "President Trump and Secretary Lutnick to reinvest billions of dollars of program efficiencies in Al and America First Policies," focused on rural/urban economies while generating an even higher return for the taxpayer. The contrast to the previous administration's failed policies could not be clearer.

Only 44% of money going to deployment

State plans submitted to the Trump administration so far show that 44 percent of appropriated BEAD funds are being allocated to connecting unserved and underserved locations, according to New Street Research. There is reason to believe that the Trump administration won't distribute the rest of the money to states.

"Since the beginning of the Trump Administration the Commerce Department has sent numerous signals that the states will have to return all funds not spent on connecting unserved and underserved locations," New Street Research analyst Blair Levin wrote in a research note yesterday. Levin pointed to a comment by NTIA Chief of Staff Brooke Donilon, who reportedly said at an August conference that BEAD "is a deployment program. It's not a non-deployment program."

Landry's letter reminded Lutnick that "Congress granted NTIA clear authority" to distribute the remaining broadband funds to states. The law says that after approving a state's plan, the NTIA "shall make available to the eligible entity the remainder of the grant funds allocated," and "explicitly grants you wide discretion in directing how these remaining funds can be used for 'any use determined necessary... to facilitate the goals of the Program,'" Landry wrote.

Landry asked Lutnick to issue clear guidance on the use of remaining grant funds by October 1, and suggested that grant awards be "announced by you and President Trump no later than January 20, 2026."

Republican governors could sway Trump admin

Levin wrote that Louisiana's proposal is likely to be supported by other states, even if many of them would prefer the money to be spent on broadband-specific projects.

"We expect most, if not all, of the governors to support Landry's position; they might not agree with the limits he proposes but they would all prefer to spend the money in their state rather than return the funds to the Treasury," Levin wrote. "We also think the law is on the side of the states in the sense that the law clearly contemplates and authorizes states to spend funds on projects other than connecting unserved and underserved locations."

Levin believes Lutnick wants to return unspent funds to the Treasury but that other Republican governors asking for the money could shift his thinking. "If enough Republican governors and members of Congress weigh in supporting the Landry plan, we think the odds favor Lutnick agreeing to its terms," he wrote.

Levin wrote that "Commerce agreeing to Landry's request would avoid a potentially difficult political and legal fight." But he also pointed out that there would be lawsuits from Democratic state officials if the Trump administration directs a lopsided share of remaining funds to Republican states.

"Democratic Governors might feel queasy about the Landry request that would allow the secretary to reassign funds to other states, but that is still better than an immediate return to Treasury and keeps open the possibility of litigation if Commerce approves red state projects while rejecting blue state projects that do the same thing," Levin wrote.

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