Small US fibre ISPs get cold feet on federal broadband program

The US Congress first set aside $42.45bn for the Broadband Equity, Access, and Deployment (BEAD) Program in November 2021, with the legislature stating a clear preference that the program prioritise fiber deployment.

Then came five-and-a-half years of glacial bureaucracy, several years of concerted lobbying from every trade association under the sun, one change of executive power, and millions of dollars in campaign donations from the world’s richest human being. The program became a political football, progress halted, and hijinks ensued, unleashing last year’s misbegotten “Benefit of the Bargain” round. Now, the math is no longer working out for many fibre builders.

In June 2026, Astound Broadband opted not to sign on the dotted line for over $250m in BEAD funding to fulfill contracts awarded in Texas ($165m) and Oregon ($90.6m). Similarly, that same month, Resound Networks chose to leave over $100m in BEAD awards on the table in New Mexico ($60.2m), Texas ($23.1m), Kansas ($8m), Arkansas ($5.2m), and Colorado ($3.9m). Others have followed suit.

For some regional fibre operators in particular, factors like discontinuous award territories, escalating fibre deployment costs, and the greatly diminished returns resulting from the tacked-on “benefit of the bargain” bidding round have made the deployment math too punishing to be worth the trouble.

Terrestrial opt-outs are second BEAD boon for satellite

To be fair, not all the BEAD optouts have come from the fibre camp. Amazon Leo balked at signing its award for over 43,000 addresses in Nebraska in May 2026, and the situational irony of Amazon Leo being among the first public BEAD optouts likely wasn’t lost on many local fibre ISPs: The nascent satellite player undercut all and sundry during the bidding process—an important factor in driving the bids to unsustainably low numbers for fibre builders.

While states will also be able to reauction and backfill some award locations currently subject to optouts and other builders will find a way to make the build and deployment logistics work, it’s important to note that every delayed fibre rollout is another boon to the satellite operators. Absent a terrestrial option offering robust, modern connectivity, satellite remains the only viable option for households limping along on legacy copper.

In that way, the 2025 overhaul of the BEAD Program’s rules has rewarded satellite players twice. First, of course, are the actual BEAD locations awarded during states’ bidding process: SpaceX and Amazon Leo top the leaderboard for total locations, each with north of 400,000. (Third-place Comcast has a little over 260,000.)

The second boon, however, will come via the waves of optouts that have now started, which will inevitably delay any potential terrestrial buildout to those locations. The delays and (later) the defaults will all keep the tap wide open for the satellite opportunity in those markets. And thus, for the satcos at least, BEAD will be a program that keeps on giving.

Rural US will lose out

The BEAD Program will end up doing plenty of good. Previously unserved or underserved communities will get greater access to a required resource. Furthermore, the program always should have envisioned prominent roles for satellite and fixed wireless access—if only because the size and topography of the US make ubiquitous fibre deployment unfeasible.

Still, while satellite service continues to improve and it’s a revelatory option in situations where there otherwise are none, very real concerns remain about satellite’s ability to keep pace with the ever-escalating bandwidth and latency demands of connected homes, particularly as increasing numbers of households connect to the constellations. Those concerns would exist for any inherently capacity-constrained access tech, but it’s doubly true for one that requires rocket science and exorbitant capital to establish, maintain, and replenish constellations of relatively short-lived satellites in perpetuity.

The executive branch of the US federal government overrode Congress to rewrite the BEAD program’s terms. In doing so, it allowed satellite operators to box fiber providers out of significant portions of the BEAD opportunity. Maybe the current administration will paper over that fact by claiming (wrongly) that satellite has already closed the digital divide. But that’s not going to change the fact that plenty of folks who could have been reached by fiber are going to be asked to pay more for a lesser service than their urban counterparts, adding a persistent drag on their ability to work, study, make appointments, and otherwise participate in a zeitgeist that’s become overwhelmingly digital.