BEAD Projects Face Inflation and Underserved Location Hurdles; T-Mobile Talks Fiber Strategy
ORLANDO -- BEAD projects face an array of potential complications and hurdles, from unanticipated rising costs to persistent problems of underserved locations being left out, speakers said this week at the annual Broadband Nation Expo. Like previous subsidized broadband deployment programs, BEAD projects will inevitably face inflation of labor and supply chain costs, WISPA President David Zumwalt said Tuesday. He said that could be a challenge for operators in their BEAD deployment plans, as there's not an escalator in the program's funding.
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Erik Levitt, CEO of mobile operator 0Wire, pointed to one small Colorado market where multiple BEAD applications were approved for locations that were already served, while many more unserved locations nearby aren't BEAD eligible. That shows that BEAD is running into the same unserved location problems that past deployment programs, such as Connect America Fund, did, he said.
Zumwalt said heated deployment activity around data centers also is likely to drive up costs for broadband deployments, though state broadband offices were probably heavily focused just on BEAD when crafting their final proposals. NTIA said Tuesday that it had approved final BEAD proposals from 18 states and territories (see 2511180007).
Meanwhile, T-Mobile Chief Broadband Officer Allan Samson said its successful fixed wireless access (FWA) approach should bear similar fruit in fiber broadband. The carrier sees an opportunity in too many fiber operators taking a cable-like approach, where they don't focus on subscribers' ease of use while ratcheting up prices year after year, he said.
A handful of years ago, analysts and competitors believed that FWA was good only for rural coverage and that it could never provide high speeds, Samson said. All those criticisms have been shown to be wrong, with about two-thirds of T-Mobile’s FWA subscribers living in urban and suburban markets, he said.
Citing Opensignal data, Samson said T-Mobile's FWA has average download speeds of 239 Mbps as of Q3, up from 168 Mbps in Q3 2023. The service has “a lot of room to run” toward even faster speeds via later-generation routers, he added.
While T-Mobile picks up many of its subscribers from cable, 12% are coming from fiber operators, even though fiber provides superior speeds to FWA, Samson noted. He said T-Mobile’s FWA experience, value and reliability are proving to be its big selling points.
To hit its goal of 60 million fiber locations by 2030, AT&T has a four-part strategy, said Tom Monahan, its vice president of converged strategic initiatives. He said the company will use organic construction; partnerships, like its agreement with Gigapower (see 2409090061); government subsidies, such as BEAD; and investments, including AT&T’s pending purchase of Lumen.
Aristotle Unified Communications CEO Elizabeth Bowles said BEAD’s new timing is worrisome. Speaking Monday evening, she said the first iteration of BEAD staggered the rollout of states’ programs. The new iteration under the Trump administration has all states doing rollout roughly at the same time, which will put big pressure on labor and supply chain availability. It's less clear when providers like Aristotle need to start placing commitment orders with suppliers, Bowles said: Doing it after a BEAD contract is preliminarily awarded could be too early, as it’s not clear if NTIA could make further changes. But waiting until there’s a signed contract is too late, as it can easily take months for electronics and other supplies to be delivered once they’re ordered. She argued that these issues are likely to get magnified when all the BEAD subgrantees start placing orders for materials at about the same time.
Marc Powell, managing director of consultancy Alvarez & Marsal, said Monday evening that while the Trump administration's version of BEAD has simplified the program, “it is not by any means simple.” It still carries onerous requirements, and compliance will be a challenge for small providers, he said, adding that the Rural Digital Opportunity Fund saw notable failure rates because of its compliance challenges.