Trump, Musk, Lutnick, and Bezos Hijacked Infrastructure Bill Broadband Grant Money, Causing A Giant Mess

from the now-with-extra-boondoggle dept

A quick refresher: There was originally $42.5 billion in taxpayer-funded broadband grants headed to the states thanks to the 2021 infrastructure bill most Republicans voted against (yet routinely try to take credit for among their constituents).

Last election season, Republicans (with Ezra Klein’s help) made a giant stink about how this program, the Broadband, Equity, Access and Deployment (BEAD) program, was taking way too long to connect anybody. So for the whole 2024 election season, Republicans blasted the program’s bureaucracy and promised how once they were in power, they’d completely revamp it and save taxpayer billions.

Yeah, well, about that.

After taking office this second time, the Trump administration rewrote the grant program’s guidance to eliminate provisions ensuring the resulting broadband is affordable, and to ensure that Elon Musk and Jeff Bezos got billions in new broadband subsidies for fledgling, costly, and congested satellite broadband networks. Note: they’re potentially getting these billions for service they already planned to deploy (while both routinely going on TV to pretend they hate subsidies).

Years later and most people are still waiting for broadband. Only one ISP in the whole country is currently serving a handful of subscribers with BEAD money. And in the states where we are starting to see connections, like Nebraska, many people are getting slower satellite service instead of fiber.

This is being celebrated by state Republicans as some sort of major victory for the public:

“At an event earlier this month in Ogallala, Gov. Jim Pillen, alongside U.S. Assistant Secretary of Commerce and Communications and Information Arielle Roth, celebrated the state’s first household internet connection facilitated through the BEAD program.”

But if you look closer, things are extremely fucked up. After Trump completely revamped the program to prioritize shittier satellite broadband service and strip affordability requirements, states had to completely revamp their proposed broadband plans. That created a bunch of new delays and even higher costs for states to absorb. So while a few people in Nebraska have gotten substandard access, that’s it.

Of the $405 million Nebraska was initially awarded through BEAD to connect unserved Nebraska locations to broadband, just $44.5 million is now earmarked for use. Nebraska now ranks dead last in granting BEAD funds for fiber internet, at about 9%, compared to a national average of 62%.

In short, the Trump administration “fixed” the program by lowering our standards, creating all sorts of new delays, and redirecting a bunch of money to billionaires for inferior satellite service they already planned to deploy. In traditional autocratic fashion, this is being sold to locals as some sort of massive victory.

Former Ted Cruz staffer Arielle Roth, now head of the NTIA for some inexplicable reason, has been going around falsely claiming that the original plan to use taxpayer money to provide faster, better fiber service is why the program took so long. Others, like Republican Nebraska Governor Jim Pillen, are trying to pretend that lowering program standards are actually improving program standards:

“Roth argued that Biden had a “thumb on the scale” for one method — fiber — which was a cause for the slower progress. Pillen called the perception that fiber internet is the gold standard of internet connections outdated. He said it ignores rapid advancements in other technologies like satellite and cable. He said the internet speeds established in Nebraska’s first connection were “off the charts.”

“What makes Nebraskans great is we don’t settle for mediocre,” [Governor Jim] Pillen said in a press release from the Nebraska Broadband Office (NBO). “And through this process we found a group of providers that will meet the high standards we have for connectivity.”

However, not all broadband advocates buy the governor’s story. Gage County farmer Emily Haxby, said it feels like Pillen is trying to justify the major changes his team implemented — changes that she’s uncertain will work out for Nebraskans in the long run.”

As I tried to explain to Ezra Klein, there were some very good reasons why BEAD was taking so long (as opposed to ARPA, legislation crafted that same year, that deployed a lot of fiber to a lot of places).

For one, the infrastructure law mandated that states work with the federal government to completely remap U.S. broadband access, something that had been opposed by Republicans and monopoly providers for years for fear it would showcase broad competitive market failure.

For another, the infrastructure bill Congress also mandated the creation of the Digital Equity Act, requiring that this taxpayer fiber be deployed equitably to everybody (instead of just cherry picking the country’s whitest, wealthiest neighborhoods, which caused much of our digital divide in the first place).

While BEAD would never be confused as any sort of poster child for government efficiency, this sort of massive coordination between states and the federal government takes time. Part of the reason there were more rules on BEAD is because a different program overseen during the Trump administration (the FCC’s Rural Digital Opportunity Fund), wound up with oodles of failed bidding and fraud.

But again, when Trump came in he “fixed” BEAD by killing off (in some cases illegally) all of these congressional mandates and redirecting a bunch of taxpayer money to Musk and Bezos for inferior access. They then patted themselves on the back for money saved, but the end result, as communities will come to discover for themselves over the next few years, is going to be an epic boondoggle. Much worse than anything the Trump administration claimed to be fixing.

But wait, there’s more! For one thing, many of the original grant bids have become less feasible because Trump tariffs and wars have driven up the cost of deployment significantly. So I suspect you’ll see a lot of defaults on bids as companies give up on participating at all. That’s going to create all manner of additional costly delays and lawsuits and fighting (much as we saw with broadband programs during Trump’s first term).

At the same time, the “savings” the Trump administration created by fucking the BEAD program up (and redirecting billions to lower-quality fiber alternatives) is creating a giant pool of money Republicans and states are now fighting over. Despite the fact Congress demanded that this money be specifically used for broadband access.

The Trump NTIA is supposed to be giving guidance to states on how this money can be spent, but they keep failing to provide clarity. I suspect because the administration and Republicans are pondering how they can legally hijack the money as part of a new slush fund. For example, here’s Nebraska:

“Subtracting the $44.5 million Nebraska received for BEAD broadband expansion, that leaves about $360 million in federal funds not yet steered. State officials have given varying estimates of how much of that amount the state could receive.

[Governor Jim] Pillen said he was looking for ways to invest $350 million in leftover funds, noting technological support for precision agriculture as a top preference for him. The NBO statement said the NTIA is evaluating uses of non-deployment funds that could bring $317 million of the funds into Nebraska.

These funds could be used for “any use determined necessary by the assistant secretary to facilitate the goals of (BEAD),” according to the statement. Borchers-Williams said NTIA officials had said they would issue this guidance by March 11 — two months ago — but he has yet to receive word.”

I suspect a lot of this funding will be redirected to tech companies and AI data center construction (tangentially deemed broadband related). Some might even be actually directed to broadband, as promised. But this being Trumpism, I suspect there’s a very real chance that a lot of the money gets pocketed by Trump Incorporated and its allies.

And five years from now, when states and municipalities realize the full scale of the con being perpetrated here on taxpayers, architects like NTIA boss Arielle Roth and U.S. Commerce Secretary Howard Lutnick will, as per tradition in Republican policy, be nowhere to be found. Smart opposition party strategists, were there any, would be currently formulating their oversight hearing questions.

Filed Under: bead, boondoggle, broadband, broadband equity access and deployment, fiber, infrastructure bill, jeff bezos, jim pillen, nebraska, ntia, satellite, subsidies, telecom