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In her June 30, 2026 testimony before the Communications and Technology Subcommittee of the House Energy and Commerce Committee, Assistant Secretary of Commerce Arielle Roth committed to putting forward guidance this summer on how eligible entities (state and territorial broadband offices) can use what remains of their Broadband Equity, Access, and Deployment (BEAD) allocations, which we call the Digital Opportunity Dividend. Vernonburg Group has written extensively on the statutory basis for eligible entities using these funds for non-deployment purposes (and the ability of National Telecommunications and Information Administration, or NTIA, to allow supplemental uses), the scope of the opportunity that they present (over $23.2 billion and counting), and the important economic benefits that can flow from meaningful use of these funds. We thought that now would be a good time to weigh in once again on how NTIA and state and territorial broadband offices can fulfill the mission of the BEAD program, which continues to offer an unprecedented opportunity to address many aspects of the digital divide.  

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States and territories are best positioned to determine the extent to which their constituents would benefit from each potential use of non-deployment funds. In addition, these eligible entities are well poised to distinguish how use of said funds should be tailored to local community needs across their jurisdiction. We think that a framework built on a few top-line principles can be helpful in giving NTIA a way to measure success and eligible entities a way to think about how best to use funds.  

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We suggest that use of the non-deployment funds should:

• Be targeted to address identified local needs;

• Not distort solutions that are working in the market, and instead enhance existing solutions or address their failures;

• Maintain the technology neutrality doctrine that was critical to the Benefit of the Bargain’s success;  

• Include efforts to facilitate deployment, including addressing permitting barriers;

• Allow for prudent oversight, with metrics of success established in advance of project implementation;  

• Offer the best value proposition for the undertaking; and  

• Advance digital opportunity efforts to overcome barriers that prevent people from using the BEAD-funded networks.  

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To apply those principles, stakeholders should consider the following:

• Rainy Day Fund: A prudent step that will help facilitate deployment to all eligible locations is establishment of a rainy-day fund. As we outline in our Rainy Day Fund blog, defaults, gaps in mapping, and other challenges will need to be addressed to ensure the primary objective of the BEAD program is met: universal connectivity. Each state and territory should set aside a rainy day fund based on its assessment of the potential risks that its subgrantees may face. While BEAD administrators have built protections into BEAD deployment funding rules to protect some of these issues, there is early evidence in states like Oregon, Texas, and South Carolina that change remains inevitable. And with inflation, a complex employment environment, and additional import and export control activity presenting cost challenges for awardees, risk of defaults remains high. Acknowledging the reality of the current landscape and learning from previous programs makes allowing states to support higher costs for later projects in the event of cost overruns or defaults prudent. Vernonburg Group analysis indicates that approximately $7.6 billion across all eligible entities would be sufficient to ensure universal and sustained broadband deployment, while leaving plenty of room for non-deployment priorities.  

• Fund a Full Range of Permitting Reform Efforts: Based on our on-the-ground work in New York and Vermont, as well as discussions with a broad range of stakeholders, including state broadband offices, NTIA should afford state and territorial broadband offices maximum flexibility to use non-deployment funding to advance permitting efforts that meet their individual needs. What may be a critical reform for one state is for another a step they have already addressed. Solutions like digitization of ordinances, state-level coordination of permitting processes, hiring additional staff to address the surge in permitting applications, and other changes that can be implemented quickly with additional dollars, can be extremely helpful in facilitating deployment by getting projects underway faster. Additionally, we know from discussions with several current BEAD subgrantees, there are harder challenges that also need to be addressed to significantly accelerate deployment schedules and better position subgrantees for success. Much has been written about the challenge with pole attachments and the gamesmanship that occurs in that bottleneck that hinders timely deployment, but additional challenges like addressing access to public rights-of-way and private easements can also present real barriers to deployment, as the Federal Communications Commission’s (FCC) recent Build America: Eliminating Barriers to Wireline Deployments proceeding sets out in some detail. These are highly localized issues and BEAD non-deployment dollars could go a long way in helping state and territory governments work with localities to address those challenges, an important objective regardless of the outcome in the FCC’s proceeding.

• Broadband/AI Adoption Funding: The statute envisions allowing states to use their funding for broadband adoption. With the recent decision from the US District Court of the District of Columbia regarding the Digital Equity Act, this source of funding has been reinstated for states, local governments, nonprofits, and others to use in advancing broadband adoption and digital skills training. As such, BEAD eligible entities should consider using their BEAD non-deployment funds to advance complementary broadband adoption interventions as well as AI skills training, workforce development (including for AI), and/or other priority initiatives as determined by each state or territorial broadband office.

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These are a few examples of how remaining BEAD funding could be optimized to advance broader policy initiatives that align with statutory discretion and program objectives. As we have noted, NTIA has a key role to play. By working in cooperation with states and affording them flexibility to use allocated funds based on their specific needs, consistent with the principles outlined above, NTIA can ensure the successful implementation of the BEAD program.

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