Strengthening Enforcement to Ensure BEAD Program Success and Connectivity

Thursday, September 25, 2025

Broadband Watch

Author: Stephanie Weiner

The Broadband Equity Access Deployment (BEAD) program, launched in January 2025, is at a critical juncture. The program aims to extend high-speed internet across the United States, but its success hinges on ensuring service providers meet their commitments. States and territories are encouraged to implement robust measures to ensure compliance and address any provider failures swiftly.

While the BEAD program has several mechanisms in place for compliance and enforcement, it does not impose financial penalties on providers who fail to deliver as promised. Consequently, states must consider stronger remedies beyond merely recovering funds, which may be insufficient, especially for families still awaiting broadband connections.

Stronger Safeguards Required for Success

With $42.45 billion allocated to the BEAD program by the National Telecommunications and Information Administration (NTIA), the stakes are high. Following a June 2025 policy restructuring, providers must be selected based on technology neutrality, but the core challenge of ensuring compliance remains. Historical precedent, like the FCC's Rural Digital Opportunity Fund (RDOF), shows that substantial defaults have occurred, highlighting the need for better enforcement strategies.

Analysis reveals that by mid-February 2025, RDOF saw defaults amounting to $3.3 billion, leaving over 1.9 million homes without promised connections. Similarly, the Connect America Fund (CAF) of the 2010s failed in delivering adequate service to nearly half of its targeted homes, emphasizing the need for BEAD to learn from past missteps.

Enhancing Enforcement Tools

BEAD's existing compliance tools, such as fund recovery clauses included in subgrant agreements, are a start. The Infrastructure Investment and Jobs Act allows for the recoup of funds when providers fail to comply. However, these measures might not be enough. States are urged to integrate more robust provisions like make whole or liquidated damages clauses to ensure providers are held accountable and to incentivize performance.

Providers are required to secure a letter of credit or performance bond, a requirement that ensures financial capacity and offers a mechanism for fund recovery in case of noncompliance. While these are protective measures, they fall short when no initial funds are awarded to a provider, as seen in some proposals.

Beyond Clawbacks: The Need for Make Whole Clauses

Clawback provisions, which aim to recoup initial funding, are not sufficiently punitive. In cases where providers are given minimal or no funds to connect certain BEAD locations, clawbacks lose effectiveness. States and territories should incorporate make whole clauses, which determine a monetary payment for nonperformance, thus encouraging compliance and covering potential shortfalls.

Estimating the opportunity cost of unconnected homes is crucial. Research suggests this cost could range from $1,800 to $2,400 per year per household. Including these considerations in agreements would not only ensure compliance but also compensate for service delays.

Preparedness to cover additional costs for re-engaging other providers in case of defaults is essential. Using cost model data or other received data can assist in estimating necessary funds for future deployments, ensuring BEAD's mission is achieved even when initial providers fail.