- The Senate’s reconciliation bill could throw a wrench into BEAD disbursements
- States may have to pick and choose between enacting AI laws or getting their BEAD allocations
- The provision includes an additional $500M in BEAD money
States are still grappling with recent revisions to the Broadband Equity, Access and Deployment (BEAD) program, and now it seems even more changes could be on the way. A new U.S. Senate bill could force them to choose between BEAD money and AI regulation.
The Senate Commerce Committee last week released its version of the budget reconciliation bill, which includes a provision that ties BEAD funding to the House-passed 10-year ban on state AI laws. In other words, the federal government could potentially deny states their BEAD funding if they decide to regulate AI in interstate commerce.
The proposed bill would also add another $500 million to BEAD’s $42.5 billion pot. But as it stands, states may not see BEAD money flow until 2026 or later. NTIA is requiring all states and territories to resubmit their proposals as well as conduct an additional subgrantee selection round to ensure the lowest-cost broadband option.
A group of House Democrats urged the Senate to strike down the AI regulation provision, arguing it would prevent states from “respond[ing] to new and evolving AI risks.”
“The AI moratorium provision would destabilize BEAD further by allowing the administration to claw back long awarded funding from states unwilling to relinquish their role in ensuring safe and responsible AI innovation,” the representatives wrote in a statement.
But New Street Research Policy Analyst Blair Levin thinks there’s a chance the Senate amendment doesn’t get the greenlight. The Senate’s Byrd Rule prohibits the inclusion of non-budget “extraneous matters” in a reconciliation bill.
Despite the inclusion of $500 million in BEAD funding, the Senate parliamentarian (who’s in charge of reviewing the reconciliation bill) “may see the language as primarily designed to achieve a policy outcome and not a budget outcome,” Levin said in a note to investors.
Even if the amendment does get approved, the new BEAD rules mean states are less incentivized to choose BEAD funding over AI legislation.
It’s too soon to tell how many BEAD awards will switch from fiber to satellite and other wireless technologies due to the current administration's changes to the program. But assuming the lion’s share goes to satellite providers, “most of what the states are going to receive they would receive without BEAD funding,” Levin argued.
Rural areas would still have satellite coverage without BEAD funding, he noted. States would likely just lose some equipment subsidies and “a theoretical advantage of reserve spectrum capacity.”
What AI regs mean for fiber rollouts
The precarious state of AI legislation might also down the deployment of fiber networks capable of supporting and utilizing AI, said Bob Bartz, VP of Engineering Services at CHR Solutions. CHR provides engineering, managed IT and other services to operators.
“As engineers, we need a consistent, nationwide regulatory framework to confidently design and deploy AI-powered infrastructure,” Bartz said in comments provided to Fierce.
If the moratorium doesn’t hold, “we’ll be left navigating a fragmented state-by-state landscape that undercuts the unified strategy our industry needs.”