The $42.5 billion broadband program was supposed to close the digital divide. Instead, it may have widened it — and crushed the private market in the process.
Three days ago, the broadband industry gathered at the National Press Club in Washington for the BEAD Implementation Summit 2026. The official agenda was optimistic: panels on deployment, financing, and technology choices as the program enters its “most consequential phase.” But the conversations happening off-stage told a different story — one of rising costs, vanishing labor, mispriced builds, and a growing realization that the actual fiber going into the ground will be a fraction of what was promised.
Five years after Congress authorized $42.5 billion for the Broadband Equity, Access, and Deployment program, the uncomfortable question is no longer when BEAD will deliver. It's whether it can.
The Numbers Don't Lie — And They Don't Favor BEAD
The Fiber Broadband Association's 2025 Deployment Cost Report, published in January 2026, surveyed fiber builders across 38 states. The findings should alarm every state broadband office and every ISP holding a BEAD award:
- 92% of respondents reported higher fiber deployment costs in 2025 compared to 2024. Nearly one-third described those increases as “significant.”
- 88% expect costs to rise again in 2026. A full 26% anticipate increases exceeding 10%.
- Median buried fiber construction now runs $18.00 per foot — a figure that climbs dramatically in rural terrain, which is precisely where BEAD dollars are supposed to go.
- Labor represents 72% of buried construction costs and 64% of aerial, making workforce availability the single largest variable in any BEAD build budget.
As Doug Dawson of CCG Consulting noted in his analysis of the FBA report: “I have to wonder if all of the folks who plan to build fiber with BEAD grants have built in a possible cost increase for fiber construction of 10% per year. That would mean that fiber built in the fourth year might be 33% more expensive than what was built in the first year.”
That's not a hypothetical. That's the math BEAD sub-grantees are now staring down.
Meanwhile, the broader construction sector has seen input prices climb more than 43% since early 2020, according to U.S. Bureau of Labor Statistics data cited in the 2026 Construction Cost Outlook. Aluminum prices alone have surged roughly 40% following expanded Section 232 tariffs, per Reuters reporting cited by Construction Today. The economic assumptions baked into BEAD applications two or three years ago bear almost no resemblance to the market contractors are pricing today.
The Government Is Operating on a Two-Year Delay
Here is the core problem: BEAD's cost models were built in 2022 and 2023. The grants were structured around those economics. But the money isn't flowing until 2026 — into a market that has moved dramatically against every assumption in those original applications.
The program's timeline tells the story. The Infrastructure Investment and Jobs Act passed in November 2021. NTIA announced state allocations in June 2023. States spent 2023 and 2024 running challenge processes, developing proposals, and selecting sub-grantees. By early 2025, only three states — Louisiana, Delaware, and Nevada — had approved final proposals. Then the current administration voided all previously approved proposals and required every state to restart the selection process under new “Benefit of the Bargain” rules, adding another year of delay.
As the Benton Institute for Broadband & Society reported, the BEAD process went into “a deep freeze” while NTIA decided what to do with the program. By the time new rules were issued in June 2025, most states had already completed their original selection rounds. They were told to start over.
Now, in March 2026, 53 of 56 eligible entities have submitted final proposals and 32 have been approved. But approved proposals are not shovels in the ground. They are permission slips for a construction environment that has fundamentally changed since the applications were written. The government is approving budgets based on 2023 economics for projects that won't break ground until 2026 or 2027.
For sub-grantees who priced their builds during the application phase, the math is unforgiving. A 10% cost overrun on a $40 million BEAD project — where the builder is responsible for a $10 million match — translates to a 40% hit on the builder's capital commitment. Many of these projects were already marginal. At today's prices, some are underwater before a single foot of fiber is placed.
Labor Doesn't Exist — And Power Is Stealing What's Left
The construction industry needs an estimated 349,000 net new workers in 2026 just to maintain current project volumes — and more than half of that number is needed simply to replace retirees, not to support new growth. According to the AGC's 2026 Construction Hiring & Business Outlook, 82% of firms report difficulty filling hourly craft positions, and 80% struggle to fill salaried roles.
Where is the available labor going? Not to telecom.
The data center and power sector construction boom is absorbing skilled workers at an unprecedented rate. IEEE Spectrum reported in January 2026 that data center developers are pulling talent from nuclear energy, military, and aerospace sectors, offering compensation packages telecom cannot match. Data center project crews that once peaked at 750 workers are now scaling to 4,000–5,000 workers per site, with on-site housing and premium per diems to attract labor from across the country.
Sixty-five percent of contractors expect data center construction to grow in the coming year, making it the only sector alongside power to post stronger sentiment than 2025. Every electrician, equipment operator, and fiber splicer who takes a data center job is one who isn't available for a BEAD build in rural Oklahoma or Mississippi.
The telecom-specific workforce picture is equally stark. As Wireless Estimator reported in February 2026, fiber broadband construction is “constrained by insufficient labor” while the tower sector has collapsed to a 20-year employment low. Experienced permitting contractors are going dark or leaving the industry entirely, further compressing the available workforce.
The Pew Charitable Trusts found that 41 states identified workforce challenges in their BEAD or Digital Equity Act plans. The Commerce Department's own Inspector General raised concerns that BEAD's four-year construction window gives states only three years to add thousands of jobs — while training programs themselves take 12 to 24 months. By the time a trainee completes a fiber splicing certification, the construction window may be half over.
The Market BEAD Destroyed
Here is what rarely gets said at broadband summits: the private market would likely have outpaced BEAD's deployment targets had the program never existed.
Consider the numbers. The Fiber Broadband Association reports that over 60% of U.S. homes are now passed by fiber — 84.6 million homes, with 11.8 million additional passings built in 2025 alone. AT&T outpaced its fiber target by nearly 75% in 2024. Verizon is targeting 1 million new homes passed per year. Private capital was already flowing at record levels.
But BEAD's $42.5 billion promise introduced a toxic dynamic: why would a private company invest its own capital in an area where a competitor might get 75% of the build paid for by the government?
The Daily Economy captured this precisely: “The promise of BEAD funds will likely deter private investment in areas where this funding is anticipated.”
NTIA's own leadership has acknowledged the distortion. As Assistant Secretary Arielle Roth stated at the Hudson Institute: “Excessive subsidies crowd out private investment, slow down research and development, and delay technological progress.”
For six years — from the IIJA's passage through the endless planning, challenge, and re-planning cycles — BEAD's looming presence suppressed private builds, held down labor prices (because companies were waiting, not hiring), constrained materials capacity (because manufacturers couldn't forecast demand), and pushed expansion plans to the right. The entire market was frozen in anticipation of “free money” that, for most of the country, still hasn't arrived.
While the industry waited, internet adoption rose from 80% to 83% between 2021 and 2023 — driven entirely by private investment and market innovation, including the expansion of LEO satellite service. The market was solving the problem. BEAD slowed it down.
What the Government Should Have Done Instead
If the federal government wanted to accelerate broadband deployment, the answer was never a $42.5 billion top-down grant program administered through 56 state bureaucracies with multi-year planning cycles and politically motivated rule changes.
The answer was labor.
The construction industry's workforce crisis was visible in 2021. Nearly 40% of skilled construction workers are over age 45. Retirement rates accelerated during COVID and never normalized. The pipeline of young workers entering construction trades has been insufficient for a decade.
A fraction of BEAD's $42.5 billion — directed toward subsidized training programs, apprenticeship funding, and targeted wage support to make telecom construction competitive with power and data center work — would have produced measurably more fiber in the ground than the bureaucratic apparatus we have now.
Texas and Kentucky have started to move in this direction. As Pew reported, both states approved funding for broadband workforce training programs in their 2025 legislative sessions, with Texas allocating $5 million for apprenticeship reimbursement. That's a start. But $5 million against a $42.5 billion program is a rounding error, and it came four years too late.
The irony is that NTIA itself recognized the need. In 2024, the agency published guidance urging states to invest in workforce development and engage construction firms for local labor market insights. But then the current administration suspended BEAD's non-deployment funds — the very pot of money states had earmarked for workforce training — as part of the Benefit of the Bargain restructuring. The program simultaneously acknowledged the labor crisis and defunded the mechanism to address it.
So Where Does This Leave Us?
The ACLP estimates that upwards of 1 million locations could remain unserved after BEAD, even under optimistic assumptions. With RDOF's 37% default rate as a cautionary precedent, the number could be significantly higher — particularly as sub-grantees confront build costs that have outrun their budgets.
BEAD is not going to connect every American to broadband. It was never going to. But the program's real damage isn't in what it fails to build — it's in what it prevented from being built. Six years of market distortion, suppressed private investment, frozen labor markets, and bureaucratic paralysis have cost the country more connected homes than the program will ever deliver.
For ISPs, construction firms, and state broadband offices navigating this reality, the path forward requires clear-eyed assessment: build budgets need to reflect 2026 costs, not 2023 applications. Workforce plans need to start with labor availability, not project timelines. And expectations for what BEAD will actually deliver need to be recalibrated against what the market is telling us — loudly, and with data.
The $42.5 billion question was never about money. It was about whether the government could build infrastructure faster than the market. Five years in, with zero homes connected and costs climbing, we have our answer.
Legion Engineering is a Texas-licensed professional engineering firm (PE License #23937) operating across 25 states, specializing in telecommunications, power, water, and natural gas infrastructure. We deliver full-lifecycle design, permitting, and construction services for ISPs, utilities, and tribal nations navigating the realities of BEAD deployment.
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