While Minnesota will be receiving $652 million from the federal Broadband Equity, Access and Deployment (BEAD) program to help fund broadband access projects across the state, many internet service providers might not opt-in over frustrations with the program.
“My members are telling me they’re not going to participate,” said Brent Christensen, president and CEO of Minnesota Telecom Alliance. “The way that BEAD is structured. I don’t know how anybody’s going to participate.”
His group represents 70 companies that provide advanced telecommunications services, like wireless video and high-speed internet, to Minnesota’s rural and metropolitan regions. Members vary in size, with the largest, Century Link, serving metro customers and the smallest serving a little over 200 customers.
Many of the companies have built out broadband in rural locations with the help of state funding, but the requirements of the federal program, which is administered by the National Telecommunications and Information Administration (NTIA), are much more “onerous,” Christensen said.
The industry is frustrated with the federal body because of these requirements and the amount of time it’s taken to set up a program. Melissa Wolf, executive director of the Minnesota Cable Communications Association, said Minnesota already had programs that worked well with internet service providers and that if BEAD had more closely modeled those programs, projects would have already been completed.
“But now here we are, four years later, and grant rounds haven’t opened yet. It’s a little disappointing,” Wolf said.
One of the requirements is that any property or equipment improved with the funds will have to be held in trust by the NTIA, meaning the providers record liens on what they install. Christensen said many MTA members can’t do that.
The BEAD program also requires providers to provide low-cost services to low-income households.
“That’s OK when you’ve got a lot of businesses and you’ve got a lot of customers that you can spread that out over. But when you’re a small company in rural Minnesota, you don’t have that customer base to spread it out on so you can’t do that,” Christensen said.
Wolf also said BEAD funds might not be enough to outweigh the risk of providers having to offer the low-cost services of $46.98 a month, though grantees may request a modification of up to $62.28.
Wolf thinks the members of the Minnesota Cable Communications Association will likely consider participating in the program, though she thinks the projects will be smaller scale than the ones the state has previously helped fund. Her membership consists of larger companies, while Christensen has smaller providers whom he doesn’t think will take interest in this program.
Christensen said he thinks internet providers may apply for the program if the locations that are eligible are located close to current service areas. But they won’t know what those locations are until the state finishes its so-called “challenge” process, which was put in place this summer to correct maps that were showing several locations as ineligible for the funds.
About 99,000 locations — residences and businesses — were added during the process, meaning those places had not shown up on previous maps indicating they were eligible for funding, said Bree Maki, the executive director of the Office of Broadband Development.
“We knew those maps were not correct,” said Maki. “I think the number is a reflection that people were paying attention and wanted to make sure that locations were accurate, and that we had solid information on how we utilize our BEAD dollars most effectively.”
Now, the state’s Office of Broadband Development is reviewing all of those challenges to see how many are valid and if any of them are already receiving funding through state programs, according to Maki.
The state applied for an extension through Dec. 18 to finish the challenge steps. Once those locations are approved by the NTIA, the state will have three grantee selection rounds over the next year to make sure those locations that came out of the challenge process have internet service providers bidding and willing to serve, with the first round anticipated in March.
That final proposal, which includes the three grant rounds, has to be completed by Oct. 3, 2025. But those in the industry think there won’t be many takers.
“The state’s kind of in a bind,” Christensen said. He’s been in talks with NTIA, the entity that’s administering the program. NTIA has said that companies can apply for waivers on those specific requirements of the program, which they’d do through the state. But still, that’s not promising, he said.
“Who in their right mind would spend tens of thousands of dollars to engineer a project on the hope that you may or may not get a waiver?” he said. “It just doesn’t make sense.”
He said in the past there have been waivers for projects, but not of this magnitude. The Minnesota Telecom Association is working with the providers to come up with a list of waivers on the issues like the lien and low-income program, which without more providers might be interested in the funds.
How much help could providers get?
Come spring, the grant amounts could vary based on the provider and their applications, Maki said.
“It really varies on the internet service providers, willingness and financial capabilities and technical capabilities and timelines to make those applications, because it is a voluntary program,” she said.
Maki said that, ideally, construction on these projects that receive the federal funding would start in 2026, which would leave time for NTIA approval and contracts to be made with the grantees.
But that ultimately relies on the providers.
“When you add a lot of these other things on top of it, what they (providers) will end up spending in time, resources and money is, you know, in some cases, could be a bigger risk than it is a benefit to be able to serve these people,” Wolf said. “That’s a lot of what providers will have to take into consideration.”
“Hopefully we can get everybody shovel ready for the 2026 construction season,” Maki said.
Ava Kian
Ava Kian is MinnPost’s Greater Minnesota reporter. Follow her on Twitter @kian_ava or email her at akian@minnpost.com.
