- Craig Moffett says private industry doesn't care about BEAD, anymore
- And as the FCC's broadband map gets updated, there are less locations for BEAD to serve
- But Moffett's analysis is a bit one-sided in its opposition to BEAD
Well-regarded telecom and cable analyst Craig Moffett from MoffettNathanson had some harsh words for the Broadband Equity, Access and Deployment (BEAD) program in a recent note for investors.
He said that because BEAD has taken so long — five years since it was established by the Infrastructure, Investment and Jobs Act — that private investors have stopped paying attention to it. And in fact, private industry has moved on to close the digital divide in their own ways.
“The biggest takeaway from all this is that market forces moved a lot faster than the government did,” wrote Moffett, noting that fixed wireless access (FWA) providers and low-Earth-orbit (LEO) satellite companies have done a lot to bring broadband to rural areas. Even cable companies, such as Charter, have been expanding their networks into unserved areas.
“Most of the BEAD program’s rural coverage goals are obsolete,” he wrote. “Broadband got there before the subsidies did. Or, more precisely, without the need for subsidies at all.”
He said BEAD is targeting just 3.8 million locations at this point, and that number is an ever-decreasing target.
In fact, each time the Federal Communications Commission (FCC) updates its national broadband map, more BEAD locations are removed as they’re discovered to be already served with broadband. An analysis by New York Law School suggests that about 35% of locations previously awarded to LEO providers may no longer qualify for BEAD funding based on updates to the map.
Moffett notes that (at this point) 62.9% of BEAD funds will go to fiber-to-the-home (FTTH); 22.3% to LEO satellite;12.9% to FWA; and about 2% to cable.
“That satellite gets any of the money at all is perhaps the biggest change to the BEAD program effectuated by the new administration,” wrote Moffett. “Look at the extraordinary difference in average cost per location! The average total cost of FTTH deployment projects comes in at a whopping ~$10.5K per location. By contrast, the LEO satellite portion is set to cost ~$2.1K per location."
Fierce’s take on Moffett's analysis
Everything that Moffett says is factually true. But it’s very one-sided. For instance, he blames the Biden administration for the long amount of time it’s taken for the BEAD program to disburse money. In fact, several states were on the very cusp of giving BEAD awards when the Biden administration turned into the Trump administration. So, it’s been the Trump administration that’s caused an unnecessary 1.5-year delay due to changing all the rules in 2025.
Moffett is also correct that the national broadband map has caused problems. But he neglected to mention that the FCC had been struggling unsuccessfully for years to create an accurate broadband map. BEAD, itself, has been the catalyst to finally get the map cleaned up. At this point, even the U.S. Congress is taking an interest in getting the map over the final goal line.
In terms of fiber broadband being much more expensive to deploy than LEO satellite, that’s a no-brainer. Yes, it’s expensive to deploy fiber. It requires trenching and digging and laying fiber-optic cables and installing optical electronics. While satellite just requires a customer to pick up a small satellite disk and connect it to some customer premise equipment. Why would that even cost $2.1K per location? However, plenty of people have pointed out that BEAD was established by the Infrastructure Investment and Jobs Act. Fiber is real “infrastructure.” Does a satellite disk qualify as infrastructure? Is it going to last 30-40 years? Or will it just become obsolete after a few years and end up in some landfill on a big pile of other outdated electronics?
One point that Moffett makes is indisputable. During BEAD’s existence, private investment has definitely stepped up its interest in closing the digital divide. Hopefully, the combination of private investment and government subsidies will finally get the job done.
More stories about BEAD
Congress suddenly cares about broadband maps
Satellite operators might not take such a big slice of BEAD after all