By Nicole Ferraro
September 21, 2026
An influential industry association representing the nation’s electric cooperatives is intensifying its push for a major policy reset regarding the multi-billion-dollar Broadband Equity, Access, and Deployment (BEAD) program. Turning its attention directly to the incoming Trump administration, the organization has issued urgent warnings that a growing number of its member cooperatives are walking away from their provisional funding awards due to escalating implementation roadblocks and regulatory hurdles.
In a formal letter addressed to Commerce Secretary Howard Lutnick, Jim Matheson, the chief executive officer of the National Rural Electric Cooperatives Association (NRECA), urged federal officials to execute a swift course correction. Matheson emphasized that any remaining funds under the $42.5 billion federal initiative must be deployed in a manner that genuinely accelerates rural broadband expansion rather than inadvertently creating structural barriers that hinder service providers.
The September 16 correspondence builds on an earlier public statement released by NRECA, which outlined deep-seated frustrations regarding the trajectory of the BEAD program. In that initial warning, the association requested that the National Telecommunications and Information Administration (NTIA) address structural flaws before officially opening up funding opportunities for a secondary, supplemental bidding round.
However, the situation has grown increasingly acute. In his follow-up letter to Secretary Lutnick, Matheson revealed that a significant portion of electric cooperatives that initially secured provisional BEAD awards are now declining them, with industry leaders anticipating additional withdrawals in the near future if federal guidelines remain unchanged.
Originally, 63 electric cooperatives across 27 states received provisional BEAD grants to bring reliable, high-speed internet connectivity to some of the most remote and economically challenging eligible locations across the United States. Unfortunately, Matheson noted, delayed implementation timelines and shifting regulatory guidance have turned the program into an environment defined primarily by uncertainty and administrative confusion. Rather than fast-tracking deployment in underserved regions, continual revisions have actively discouraged provider participation.
To date, 20 of the 63 electric cooperatives originally slated to participate in the BEAD rollout have officially withdrawn from the program. Many other cooperative leadership teams are actively considering pulling out as well, citing severe operational concerns over the application of extra-statutory pole attachment requirements as a mandatory condition of participation.
The cascading withdrawals arrive as federal and state authorities prepare for a supplemental funding round. This upcoming phase is structurally designed to fill location gaps left behind when initial BEAD bidders drop their awards, as well as to address regions where providers have defaulted on separate federal broadband programs—such as the Rural Digital Opportunity Fund (RDOF)—since the original BEAD mapping data was compiled. Nevertheless, NRECA’s correspondence underscores that the fundamental operating conditions of the BEAD program remain overly burdensome, preventing many essential community-focused providers from staying on board.
To salvage the program’s primary objective of connecting rural America, the association is formally asking the NTIA to implement a series of crucial adjustments applicable to both the initial and upcoming supplemental deployment phases. Among the primary requests is an upward adjustment of cost thresholds to accurately reflect ongoing inflationary pressures, surging labor expenses, and persistent supply chain bottlenecks that have impacted construction budgets.
Furthermore, NRECA is calling on federal regulators to increase the Build America, Buy America de minimis cap, which is currently fixed at $1 million per project. The association argues that this strict ceiling unfairly penalizes larger infrastructure projects, noting as an example that fiber-optic cable prices spiked by 40% in a single month from at least one major commercial supplier.
The cooperative association is also pushing the NTIA to eliminate extra-statutory mandates, such as rules that force traditionally exempt pole owners to comply strictly with Federal Communications Commission (FCC) pole governance, which they argue merely pile on regulatory complexity and operational expenses. Beyond these changes, NRECA suggested that unused BEAD dollars—specifically the designated non-deployment funds—could be far better utilized by streamlining local permitting processes, expanding rural middle-mile network capacity, and directly supporting workforce development initiatives within the telecommunications sector.
In addition to Commerce Secretary Lutnick, NRECA’s detailed letter was directed to several other key federal decision-makers, including NTIA Chief Arielle Roth, Stuart Levenbach at the Office of Management and Budget, and Jacob Marco at the National Economic Council.
Remaining locations may vary…
While key stakeholders continue to lobby federal agencies to reshape the future course of the BEAD initiative, a newly published study offers a sharper look at the precise funding and geographic areas left over for the NTIA’s newly announced supplemental funding round. At the same time, the analysis casts serious doubt on just how many of those remaining remote locations will ultimately survive the rigorous challenge process and remain on the official funding map.
According to a comprehensive research analysis authored by Alex Karras and Michael Santorelli with the Advanced Communications Law and Policy Institute (ACLP) at New York Law School, an estimated 1,041,099 locations remain on the NTIA’s list for the upcoming supplemental funding cycle. This total translates to an anticipated allocation ranging between $5.3 billion and $8.8 billion specifically earmarked for physical deployments. Consequently, this leaves an estimated $12.2 billion to $15.7 billion in residual non-deployment funds, for which the NTIA has yet to release formal guidance or expenditure rules.
However, whether these billions in supplemental funds are successfully awarded to cover all 1.04 million remaining addresses depends heavily on upcoming state challenge processes. During these procedures, competing internet service providers are legally permitted to challenge the designation of a location as unserved and eligible for public subsidies by presenting evidence that they already offer broadband service to those specific coordinates.
As the ACLP analysis points out, a challenger holds the power to wipe a location clean off the funding registry by producing proof of active service delivered through legacy copper, standard cable, fiber optics, licensed or licensed-by-rule fixed wireless, unlicensed fixed wireless, or non-geostationary satellite architectures, including low-Earth orbit constellations.
This mechanism could create substantial complications for the supplemental round’s reach. Based on the institute’s evaluation of current data, low-Earth orbit satellite internet service is technically available to 1,038,504 locations, representing an astonishing 99.8% of all addresses listed on the supplemental deployment queue. Meanwhile, unlicensed fixed wireless service covers an additional 155,826 locations, or roughly 15% of the total pool.
As a result of this widespread technological overlap, up to 99.8% of the locations currently on the supplemental list face potential challenges from either satellite or unlicensed fixed wireless providers. This leaves a minuscule total of just 2,561 locations nationwide with zero challengeable broadband technology of any kind under the latest Federal Communications Commission availability datasets.
