The U.S. Digital Divide Has Narrowed by At Least 57% Since 2023. What Does That Mean for BEAD?

BEAD
funding
policy
ACLP Analysis of BEAD Challenge Process Results in 46 States Finds a 57% Decrease in Unserved and Underserved Locations Since 2023, Yielding Significant Increases in Per-Location Funding. How Should This Impact Forthcoming BEAD Reforms?
Author

Michael Santorelli, Alex Karras

Published

May 7, 2025

Key Takeaways

  • The BEAD Challenge Process has yielded the most accurate look ever at the state of broadband availability in the U.S.
  • The ACLP has gathered and analyzed BEAD Challenge Process results in 46 states (data from the remaining 4 states – NJ, NC, OH, TX – is not publicly available). This analysis, summarized below, shows dramatic decreases in unserved and underserved locations compared to counts from the latest FCC data, and, crucially, to counts at the time BEAD funding was allocated.
  • Across these 46 states, the number of eligible BEAD locations (i.e., locations that are unserved or underserved) has decreased by 57% since 2023. This decrease highlights the significant progress that has been made to close the digital divide since BEAD funding amounts for each state were announced in June 2023. These gains stem directly from continued capital investment by ISPs to extend networks and grant-funded projects via ARPA and RDOF.
  • With fewer eligible BEAD locations, states have more funding available on a per-location basis to close their digital divides. Indeed, in some cases, states now have double or triple the amount of funding per eligible location than they had when NTIA allocated funding two years ago. Consequently, it is more likely than ever that the U.S. will be able to achieve 100% broadband availability with the current allocations, and more of those allocations can probably be served by terrestrial networks.
  • These trends raise three foundational questions with which NTIA must grapple as it finalizes its review of the BEAD program.

Foundational Questions

  1. Given these significant and ongoing changes to the contours of the digital divide, are there adequate procedures in place to ensure that BEAD funds are not used to support widescale overbuilding?
  2. With a narrower digital divide, has the role of LEO satellite in BEAD changed?
  3. The data appear to indicate that there is a higher likelihood that more states will have BEAD funding leftover after addressing remaining eligible locations. What should be done with those funds?

Overview

With the BEAD Challenge Process largely complete in each of the 50 states (only a few states are still conducting theirs), most states have released datasets listing which locations are eligible for funding following challenges from local governments, nonprofits, and ISPs. Given the rigorous nature of these challenge processes, the data generated by them provides the most complete, accurate, and granular look to date of broadband availability across the country.

The ACLP has aggregated challenge process results for 46 states to count remaining unserved and underserved locations (data from the remaining 4 states – NJ, NC, OH, TX – is not yet publicly available). We then used those data to calculate average funding per eligible BEAD location that was available to states at the beginning of the BEAD program and how much that amount has increased as the number of eligible locations has decreased. These data are available here.

The ACLP’s analysis shows a near-ubiquitous decrease in eligible locations when compared to the latest FCC data (as of June 30, 2024), and to FCC data used by NTIA to calculate BEAD funding allocations. The magnitude of this decrease is surprisingly large. Across these 46 states, the total number of BEAD-eligible locations has decreased by 57%. Some states have seen dramatic drops. In South Carolina, for example, there has been an 84% decrease in eligible locations.

Observations

These decreases illustrate the considerable progress that has been made in closing the digital divide since 2023. There are significantly fewer unserved and underserved locations because of continued capital investment by ISPs in network expansions and the assumption of enforceable commitments to deploy new networks stemming from RDOF and from state grant programs underwritten by ARPA funds.

Fewer BEAD eligible locations mean more BEAD funds will be available for each remaining location, allowing states to invest in the most cost-effective long-term technology for their residents, a positive outcome for households still waiting for connectivity. Indeed, in many states, per-location funding has doubled or tripled. In short, there appears to be less of a need to leverage lower cost platforms, at least in the short term, to stretch BEAD funds.

Policy Implications

NTIA has indicated that it will soon wrap up its “rigorous review” of BEAD. The ACLP previously offered recommendations for how NTIA can get the program back on track and get funding out the door and into the hands of experienced ISPs so they can begin building networks. Given the challenge process data discussed here, there are at least three new issues that NTIA must address before it completes its review.

  1. Preventing Widescale Overbuilding. As mentioned, the narrowing of the digital divide observed by the ACLP stems largely from state-led grant programs that have doled out billions in ARPA funds. Given the frenetic nature of these grant allocations, many of which occurred after states completed their BEAD planning and conducted their challenge processes, there is an increased likelihood that some BEAD-funded projects could result in significant overbuilding (i.e., overbuilding beyond the small amount of incidental overlap permitted by the IIJA). In New York, for example, the state has used ARPA funds to subsidize significant municipal broadband overbuilding. It is unclear whether and how the state will account for these new connections during the BEAD allocation phase. Similar dynamics might be evident elsewhere.

    Accordingly, NTIA should develop mechanisms to ensure that bids for BEAD funding reflect any grant-funded projects not accounted for in a state’s challenge process. To the extent a bid would result in overbuilding locations that have since come under an enforceable commitment, then states must have processes in place to deduplicate these commitments in a timely manner. This will ensure that BEAD funds remain laser-focused on closing the digital divide and prevent against wasting these resources on areas that are already served.

  2. More Precisely Defining the Role of LEO Satellite. The remaining locations for BEAD will likely be among the most expensive and challenging to serve. With more funding per location on hand, states should be encouraged to serve as many of these locations with terrestrial networks as operationally and financially feasible. States should also be encouraged to leverage LEO satellite to provide service to the most expensive locations in a project area. Removing those locations from a terrestrial ISP’s bid could bring its costs per location down significantly in a project area; omitted high-cost locations could then be put out to bid by a state to LEO satellite providers or other platforms. Several states adopted a similar approach in their Volume 2s: bidders can identify an alternative percentage of locations they could more feasibly serve in project areas that, but for the inclusion of some extremely high-cost locations, would otherwise be economically viable with the BEAD subsidy.

    With a substantially narrower digital divide in 46 states, and with real concerns about the platform’s capacity and long-term financial sustainability, LEO satellite appears best positioned to serve as a gap-filler in project areas that would otherwise be too expensive to serve entirely with terrestrial networks. BEAD challenge results affirm that this will likely be the most efficient approach to closing the digital divide in many states and would allow states to invest as much funding as possible in terrestrial networks that have proven long-term performance track-records and more predictable financials than LEO satellite. NTIA should thus encourage states to embrace this approach and provide more clarity regarding how to set extremely high cost per location thresholds to more precisely target where and how LEO satellite is deployed.

  3. What to Do with Leftover BEAD Funds. With fewer locations to serve with the same amount of funding, there will likely be more instances of states having BEAD funds leftover after achieving 100% availability. This has already happened in two of the three states – Delaware and Louisiana – that have completed their BEAD programs. In some cases, the amount of remaining funds is significant. Louisiana, for example, has over $500 million in surplus BEAD funds that it proposes to use for a variety of non-deployment projects.

    To focus BEAD funds on getting better connectivity to those who need it, NTIA could update its guidance to limit how these leftover funds are used by states. For example, NTIA could prohibit states from using those funds to support overbuilding in the middle-mile. It could also create a system through which leftover funds are reallocated to states that need more funding to achieve 100% availability, even when incorporating LEO satellite in instances as described above. Thereafter, NTIA could consider whether and how to return remaining BEAD funds to the Treasury, or it could use those funds to support more narrowly defined non-deployment uses by the states.

In sum, states need clarity to finish their work, and the hard work of building networks will still take time and effort even once funding is awarded. Established ISPs are ready to get the job done, and the remaining unserved and underserved households across the country are eager for better broadband. Fortunately, there appears to be substantial support for NTIA to act expeditiously to roll back unnecessary and extraneous BEAD requirements that only add to the costs of serving rural America. The ACLP urges NTIA to use the data discussed here to inform any changes it makes to BEAD.

Methodology

We were able to obtain BEAD Challenge Process Results for 46 states. The states for which data was not available at the time of this writing were: North Carolina (recently concluded), New Jersey (recently concluded), Ohio (not publicly available), and Texas (ongoing).

For 44 states included in the analysis, data was provided either in CSV or Excel format. For two states, Rhode Island and West Virginia, counts of unserved and underserved locations were available in lieu of a location list, and were manually incorporated. One state, Mississippi, did not classify unserved and underserved locations separately, and is thus included only in the table of eligible location counts.

While classification and naming conventions varied, all states included, among other fields, Fabric location IDs, and classified locations as underserved or unserved (some files also listed all served locations). Separately enumerated community anchor institutions (CAI) are not included in our counts. We aggregated data for these states, standardized classifications, and generated our summary tables with counts of unserved and underserved locations.

The unserved and underserved counts from the most recent FCC data are sourced from Mike Conlow’s Substack, which provides a very useful summary of those counts and other figures for each National Broadband Map update. The unserved figures at the time of BEAD allocation were compared between Conlow’s estimates and an archived copy of NTIA’s figures, and were found to be near-identical.