March 9, 2025
Texas is contemplating returning approximately $1 billion from its allocated $3.3 billion under the federal Broadband Equity, Access, and Deployment (BEAD) program to the U.S. Treasury. This consideration arises due to the state’s significant progress in expanding broadband access through state-led initiatives and private-sector investments. The BEAD program, established under the Infrastructure Investment and Jobs Act, aims to provide $42.45 billion to enhance high-speed internet access across the United States. Texas received a state allocation of $3.3 billion, initially intended to connect 779,378 eligible locations lacking adequate broadband service.
Progress in Texas Broadband Expansion
Since the allocation, Texas has made remarkable strides in broadband deployment:
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State Initiatives: The Texas Broadband Development Office (BDO), established in 2021, has mobilized over $700 million from various sources to support broadband infrastructure projects.
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Private Sector Contributions: Private companies have increased broadband services in commercially viable areas. Prioritizing profit has driven private companies to greatly increase internet services without taxpayer money.
These combined efforts have connected more than two-thirds of the state’s initially identified BEAD-eligible locations since June 2023.
Reevaluation of BEAD Funding Needs
The substantial progress led to a reassessment of the actual number of locations requiring BEAD support:
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Challenge Process: After the BEAD challenge, the count of eligible locations fell from roughly 779,378 to 236,000, awaiting approval from the National Telecommunications and Information Administration (NTIA).
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Funding Surplus: This reduction implies that the full $3.3 billion allocation may exceed Texas’s current needs for broadband deployment.
Proposal to Return Excess Funds
In light of the surplus, Texas Comptroller Glenn Hegar has proposed returning approximately $1 billion of the BEAD funds to the U.S. Treasury. However, he also expressed interest in repurposing a portion of these funds for “non-deployment uses,” such as:
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Workforce Development: Investing in training programs to equip residents with skills relevant to the evolving digital economy.
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Small Business Support: Providing resources and tools to help small businesses leverage broadband connectivity for growth.
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Education and Healthcare Enhancements: Improving digital infrastructure in schools and healthcare facilities to enhance service delivery and accessibility.
These initiatives seek to improve the quality of life and stimulate economic growth in Texas.
Implications for Federal Broadband Policy
Texas’s potential return of BEAD funds highlights several considerations for federal broadband policy:
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Efficient Resource Allocation: The state’s experience underscores the importance of accurate assessments to ensure federal funds are directed to areas with genuine needs.
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Flexibility in Fund Usage: Allowing states to allocate funds toward complementary initiatives, such as affordability programs, could address barriers beyond infrastructure deployment.
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Collaboration Between Public and Private Sectors: Texas’s success demonstrates the effectiveness of combined efforts in achieving rapid and economically responsible broadband expansion.
Texas’s consideration of returning a portion of its BEAD funding reflects the state’s proactive approach to broadband expansion and fiscal responsibility. This development prompts a reevaluation of federal funding strategies to accommodate varying state needs and progress levels, ensuring that resources are utilized effectively to bridge the digital divide nationwide.
