‘The $42B question’: What’s next for federal broadband funding?

As President-elect Donald Trump staffs his new administration, states relying on federal money to fund broadband internet expansion might worry about what the future holds.

Trump last week unveiled Brendan Carr as his choice to chair the Federal Communications Commission, which plays a key role in efforts to reduce the digital divide alongside the National Telecommunications and Information Administration.

The two agencies have helped drive the $42.5 billion Broadband Equity Access and Deployment, or BEAD, program, funded under the 2021 infrastructure law. But in his previous writings, Carr has appeared skeptical of BEAD, which he criticized repeatedly in the run-up to the election on X, formerly Twitter.

Carr also authored a chapter of Project 2025, a conservative project outlining the agenda for a Republican president, about the FCC. In it, Carr said connectivity programs “have been plagued by a troubling lack of accountability and good governance.” He also said the federal government has not put enough protections in place to govern how the money is spent. A Carr spokesperson did not respond to requests for further comment.

That could spell trouble for states and localities who are counting on those federal funds to get their residents online, especially if Trump’s as-yet unnamed NTIA administrator follows suit. The administration could withhold funds from states altogether or order them either to spend funds they have received or to withdraw any grant awards. The latter scenario is unlikely, especially as Louisiana is the only state to have made grant awards under BEAD and did so earlier this month.

Experts said that while the federal government could decide to withhold funds, it would be an unpopular move, given the bipartisan support for broadband funding at the state level.

“I think that that is one of the unsung and underappreciated advantages of the [BEAD] program: that governors, state legislators and their agency partners, they see the value in this program,” said Kathryn de Wit, project director of the Broadband Access Initiative at The Pew Charitable Trusts. “States were accelerating their investment in broadband … This is a significant expense, and that is not something that states can fully take on themselves.”

The incoming Trump administration has offered no specifics on how it will proceed. In an email, Karoline Leavitt, a spokesperson for the transition, said Trump was elected “by a resounding margin giving him a mandate to implement the promises he made on the campaign trail. He will deliver.”

For now, uncertainty reigns as state and local observers wait and see what the incoming administration plans to do. 

“That's the $42 billion question,” said Angelina Panettieri, legislative director for IT and communications for the National League of Cities, of the lingering uncertainty around BEAD. An FCC spokesperson declined to comment, as did an NTIA spokesperson, although the latter referred to a recent blog post that said every participant has had their plans approved.

For their part, states are looking to proceed as normal. A spokesperson for Empire State Development, which is responsible for New York’s broadband plan, said in an email it is “moving full steam ahead to implement the plans and programs for affordable, accessible and equitable broadband” and expects to “continue our collaborative relationship with the federal government under the new administration.” It’s a similar story in Colorado.

“Both parties in Colorado recognize the importance of expanding internet access because it’s essential for fostering economic growth, ensuring educational opportunities and enhancing healthcare access for all communities,” said Brandy Reitter, executive director of the Colorado Broadband Office, in an email. “We encourage the new administration to continue expanding this program because it’s the right thing to do, for Coloradans and all Americans.”

A spokesperson for the National Rural Electric Cooperative Association, which works to help connect rural communities to the internet, said the group’s “focus right now is really on state broadband offices and the guidance they receive from regulators regarding BEAD funding.” NRECA is waiting to “get a better sense of what the administration’s thinking is on broadband,” the spokesperson continued.

Observers are also closely watching how the new administration and NTIA leadership proceed with the technology favored by BEAD. Currently, the agency prioritizes funding fiber projects and has previously called them the “gold standard.” But Trump’s recent statements suggest he is open to other technologies, including satellite internet, which is being pushed by billionaire advisor Elon Musk through his company Starlink.

“We’re spending a trillion dollars to get cables all over the country, up to upstate areas where you have two farms, and they are spending millions of dollars to have a cable,” Trump said during a podcast appearance. “Elon can do it for nothing.”

Putting more money into satellite internet might be an attractive option, as the private sector has already made capital investment in the technology, said Blair Levin, a policy analyst with equity research firm New Street Research and a senior nonresidential fellow at Brookings Metropolitan Policy Project. And he said that while there are questions around its current and future performance, a lot of this debate may go beyond technology.

“There's a lot of very worthwhile debate that, in my opinion, should happen,” Levin said. “But the question is, is this a policy debate, or is this about political power? That is a question we will be asking ourselves a lot.”

Congressional Republicans also may feel more empowered to stymie federal broadband grants. U.S. Sen. Ted Cruz, the Texas Republican who is likely in line to chair the powerful Senate Commerce Committee, earlier this month wrote to current NTIA Administrator Alan Davidson to halt any grant disbursal under its $1.25 billion Digital Equity Competitive Grant Program.

Meanwhile, Ohio Republican Rep. Bob Latta, who is in the running to chair the House Energy and Commerce Committee, has been critical of federal broadband funding programs. Spokespeople for both lawmakers did not respond to requests for comment.

States may be concerned about the future of their broadband funds, especially as the economic benefits of investing in the infrastructure can be enormous. De Wit said state lawmakers and governors have an “important voice” in emphasizing the role broadband can play in economic development to federal leaders.

“Momentum is happening,” she said. “A lot of things are happening in the background — as is true with infrastructure projects in general — but there is a lot of momentum. For funds to be clawed back at this point, it would have a devastating effect on multiple sectors of the economy, plans, and things that are already in motion.”