'People need to see it': How politics hung up a $42 billion Biden internet buildout

President Joe Biden’s 2021 infrastructure law promised to help Virginia expand broadband internet to hard-to-reach corners of the commonwealth — investing nearly $1.5 billion to improve a key service across a swing state crucial to Democrats’ hopes in the November election.

But so far, Virginia, like many states, hasn’t seen a cent of that money put to use. The state got news only in July that it was approved for funding — more than 10 months after completing its application to Washington, and nearly three years after the law was signed.

Virginia’s story is just one thread of the messy, delayed rollout of a $42 billion national program championed by Democrats in particular, but with big potential payoffs in Republican districts as well.

In his speech last month at the Democratic National Convention, Biden trumpeted his broadband program in historic terms, calling it a national build-out “not unlike what Roosevelt did with electricity.” Democratic presidential nominee Kamala Harris helped create and promote the program as vice president, and on the campaign trail it could offer a way to show how the White House has delivered for rural Americans.

But as Harris makes her case, the delays have turned what could have been a victory lap for the Biden-Harris administration into a focal point for industry frustration, local partisan finger-pointing and anti-Washington complaints from all corners.

The success or failure of the program could have political implications in Virginia, a swing state that voted Democratic in the last four presidential elections but is a current target for the Republican National Committee. Polling has shown a narrow lead shifting between Republicans and Democrats , all within the margin of error.

One liberal activist lamented a missed campaigning opportunity from the broadband money.

“People need to see it,” said Lynlee Thorne, a political director for Democratic campaign group Rural Groundgame, which helps lead campaigns for Virginia state seats. “It's got to be a lot more concrete. We're past the point of being able to earn people's votes based on the status quo or just hope.”

The program, known officially as the Broadband Equity, Access, and Deployment Program (or BEAD) and embedded in Biden’s mammoth infrastructure law, was meant to bring a vital service to communities across America.

But thanks to a federal affordability requirement that telecommunications companies say is too tight , many states have sparred with Washington over their funding applications, delaying the rollout. There’s little chance that communities across the country will see concrete results until 2025 at the soonest — well past Biden’s time in office — and no chance at all before November’s election.

Politically, the frustration has already boiled into attacks: Some Republican members of the state’s congressional delegation blamed the Biden administration during oversight hearings this spring and summer.

General Assembly Del. Terry Kilgore, a veteran Republican legislator, says it counts as an embarrassment for politicians trying to defend the program. He said his constituents in the state’s rural southwest are eager to improve their spotty internet access, and they’ve been hoping for money since the law was signed.

“It's hard to address in a town hall or a tele-town hall when those questions come up,” Kilgore told POLITICO. “You say, ‘Well, we're still waiting on the federal government.’ And they go, ‘Oh, gosh, it’s been three, four years.’ It sort of puts egg on everybody's face.”

The administration says Biden’s broader goals are on schedule, despite delays in states like Virginia.

The government is executing BEAD “on the 10-year timeline Congress intended,” a spokesperson for the National Telecommunications and Information Administration, the Commerce Department agency tasked with overseeing the program, told POLITICO.

The federal grant program has now green-lighted applications from 34 states, which will let them start accessing the first share of federal aid. But given the lengthy negotiations over the terms of their plans, the administration doesn’t expect broadband projects funded by the marquee program to launch in earnest until 2025.

As the months go by, there is also another clock ticking loudly on the program’s broader policy goals. If voters return former President Donald Trump to office in November, Republicans will have wide latitude to rewrite its rules — possibly wiping out Democratic requirements for accessibility, union participation and climate impact, and almost certainly dialing back the affordability rules that have caused so much friction in Virginia.

Even among the numerous delayed state broadband programs, Virginia stands out as a special case. The state has marketed itself as a hub of digital infrastructure; it hosts Amazon’s second headquarters and a huge portion of the world’s data centers.

When lawmakers passed BEAD in 2021, Virginia already had a standing broadband office — a rarity at the time. That gave Virginia an advantage, as did its broadband-savvy U.S. senator, Democrat Mark Warner , a former telecom executive who successfully fought to maximize his state’s payout from the program.

When the time came, it was the first in the nation to complete its application for the federal broadband money last September — a milestone proudly touted by Republican Gov. Glenn Youngkin .

Months passed. Louisiana was the first state to get approved for the money, in December 2023. Then came Kansas, Nevada and West Virginia in April. Then more than a dozen others in the spring and summer.

Youngkin’s office told POLITICO this summer that he was concerned about the delay, saying he worried that other states might hire Virginia’s workers if they got the money first.

Interviews and written documents show the issue holding Virginia back appeared to be the law’s affordability requirement. According to funding rules published in May 2022 by the Commerce Department , any provider taking the federal money needs to offer a low-cost service option. The administration and Virginia were locked in a multi-month standoff over exactly how to fulfill that requirement — an impasse that hit many other states as well.

The affordability rule was part of a suite of federal conditions, some written into the original infrastructure law and some added by the administration in its 2022 guidelines. The rules require states accepting the money to make sure providers plan for climate change, reach out to unionized workforces and hire locally. One vague but broad provision requires low-cost options and fast connections for “middle class families” at “reasonable prices.”

Some top Republicans — including Trump’s vice presidential nominee, Sen. JD Vance (R-Ohio) — complained early last year that these requirements were unnecessary progressive goals that went beyond the infrastructure law.

Democrats defended them as reasonable considerations: If the federal government was going to pay companies to build out internet service, the law should do everything possible to make sure that it was rolled out responsibly, in a way that consumers can actually afford.

In Virginia, the issue was how explicitly the state would spell out what a provider’s low-cost option would be. Nudged by telecom companies, the commonwealth initially sought to let providers themselves determine these rates. The Biden administration pushed for a more precise price or formula, set by the state rather than the companies. Ultimately, NTIA and Virginia compromised and allowed the commonwealth to set a range of rates — $30 to $75 per month, or lower if they want — that providers had to offer within eligible areas.

That argument hung up Virginia’s $1.5 billion application, and by early 2024 its delay was reverberating across Capitol Hill, where many Republican lawmakers invoked the dispute in Virginia to complain about the progress with BEAD nationwide.

Whose fault was the delay? That depends who you ask. Republicans have generally blamed overweening Washington bureaucrats, but industry critics say the Virginia government was too sympathetic with the telecom industry from the start.

The initial Virginia plan on affordability was “mimicking the talking points” from the telecom industry, argued Christopher Ali, a Penn State professor who has researched broadband extensively, including in Virginia, in a recent interview. Like many states, Virginia faced pressure from the telecom industry over too-close control of rates, and wanted to be sure companies were actually willing to participate.

The compromise version was still fairly telecom-friendly. “It’s pretty close to what we were advocating for,” Ray LaMura, president of a state cable broadband association called VCTA, told POLITICO.

LaMura said that forcing ultra-low rates would have made the build-out untenable for many companies. Many unserved households are far off the roads, he pointed out, making them the hardest to reach with broadband infrastructure.

Virginia’s standoff has parallels across the country that have taken their own time to resolve. Initially, the Commerce Department anticipated approving all states’ plans by the spring of 2024; it has since updated that to by the fall. In a budget hearing in late June, Commerce Secretary Gina Raimondo told a House panel that states were to blame for waging unnecessary arguments over the federal rules.

“We are not slowing this down,” Raimondo said. “A lot of these governors are dragging their feet.”

Regardless of where the blame lies, the program’s inertia draws a contrast to some of Biden's other spending programs, which have long since broken ground on highway repairs and other infrastructure projects.

In Virginia, that leaves thousands of mostly rural residents stuck in a long-outdated version of the internet.

According to the official state count, there are more than 100,000 homes and offices across Virginia with connection speeds slow enough to qualify for the $1.48 billion in funding.

Without an upgrade, residents there have dial-up level connection speeds, or are forced to shell out more than $100 a month for satellite service.

Katrina Smith, a former president of the Virginia Realtors Association, has seen the impact both on her family and professionally. She said her daughter could not stay with her in Winchester in the Shenandoah Valley during the pandemic because her job in a credit union needed a wired connection. Ultimately, Smith said she and her neighbors petitioned Comcast to extend its network to her home — which the company agreed to do, for a price. “We paid a lot of money,” she said.

For people who can’t afford to do that, there are costs beyond just access, she said: Home prices go up in areas where there’s good connectivity, Virginia realtors determined in their research done in recent years. An association analysis in 2020 showed that better internet access in connectivity-strapped southwestern Virginia could increase typical home value by up to 13 percent.

The Biden administration maintains there’s a big payoff around the corner.

“Virginia can now move from planning to action,” Alan Davidson, who heads the National Telecommunications and Information Administration, told reporters on July 26 following the approval of the commonwealth’s plans, which he lauded as sophisticated.

Now able to obtain an initial chunk of the grant money, Virginia can soon start picking the providers to do the network building — although it faces yet another bureaucratic hurdle before that can happen: It’s still trying to get federal certification for exactly what areas are eligible for this aid. Other states, meanwhile, are already doing this. Louisiana announced last month that it’s moving to pick broadband providers this fall, hoping to launch projects in the first quarter of 2025.

With BEAD money on hold nationwide, Republicans have been sharpening their knives for a different future for the program — one where telecom companies get the money without the Biden administration’s safeguards.

If Trump is elected in November, then his agency leaders would have wide latitude to revisit the rules that Republicans don’t like or make other changes to the program, although they could face hurdles in re-litigating approved state plans and would still have to comply with the infrastructure law’s directives. Both in Congress and at agencies, influential Republicans have signaled they don’t expect to see the same affordability demands.

They might have a friend in Elon Musk, too, who has offered his own swipes at the “outrageous waste” of BEAD. Musk’s Starlink service offers satellite internet to rural Americans, and his SpaceX officials have expressed interest in receiving some of these broadband subsidies in certain states.

House Republicans have already launched an investigation into whether the Biden administration’s affordability requirements were violating the infrastructure law itself, which includes a prohibition on rate regulation.

In a May hearing, Rep. John Joyce (R-Pa.) called it “incredibly troubling” that the NTIA would withhold grant approval based on affordability requirements. Brendan Carr, an influential Republican commissioner at the FCC — and potential agency chair under Trump — said during a July hearing that BEAD needs “a course correction,” complaining that it has failed to connect any households to broadband after years because of requirements that led to it “going off the rails.”

In an interview this May, Rep. Bob Latta (R-Ohio), who chairs a key House Energy and Commerce telecom subcommittee, predicted a Trump reelection would mean a change in broadband priorities: “We might not have to even ask those questions about rate regulation,” he said, “because it wouldn’t be going on.”

Industry leaders are clamoring for this added flexibility. In July, more than 30 telecom executives signed a letter to Raimondo saying that aggressive implementation of the affordability requirements could undermine the program. “We and our members sincerely want this program to work, but we believe that your agency’s administration of the low-cost service option requirement in particular risks putting the overall success of BEAD in jeopardy,” the letter said.

Some of these broadband officials see the Virginia compromise, which was approved after their letter, as more palatable, and one that could be adopted more widely. ACA Connects said it was “encouraged” to see Virginia’s final low-cost proposal, which “gives providers flexibility and reflects marketplace realities,” a spokesperson for that cable group told POLITICO in August.

One state broadband leader who successfully won approval from the Biden administration last month — with a more flexible low-cost plan not to exceed $70 per month, recalculated annually — says she would welcome ditching more prescriptive affordability requirements in the event of new White House leadership.

“Is it my job to be telling companies what they charge? I would say it’s not,” Misty Ann Giles, a Republican who heads Montana’s broadband efforts and directs its Department of Administration, said in an interview. She told POLITICO that NTIA is unduly “pushing a social policy.”

While Republicans paint the program as a regulatory mess, Democrats looking for political capital have tried to showcase smaller efforts to boost connectivity. That includes internet projects in Virginia and elsewhere, already underway, funded from other pots of money in the infrastructure law and pandemic relief packages.

These pots of money have meant more than $700 million flowing to Virginia across 30 different broadband projects, still in process but already making progress, according to the administration. That’s on top of other efforts in recent years funded by the commonwealth itself. Across the nation, beyond BEAD, “we have billions of dollars already in flight — and we’re already connecting people,” an NTIA spokesperson told POLITICO.

Local Virginia politicians speak with pride of how far they’ve already come, even as they say BEAD will be vital for finishing the job and acknowledge impatience among their communities.

“When I'm talking to voters, I talk about how with the local and private funds, we've leveraged over $2 billion to invest in broadband infrastructure and hitting almost the entire commonwealth,” state Sen. Jennifer Boysko, a Democrat who chairs the commonwealth’s Broadband Advisory Council, told POLITICO.

However, she acknowledges delays can cause tension. “I've done some meetings with local county leaders who are frustrated because they know that they've invested the money, they know it's there, but the projects aren't happening as fast as they want them to,” she said.

In May, Treasury Secretary Janet Yellen visited Stafford County, Virginia, to trumpet hundreds of millions of dollars in broadband investments from her department’s pandemic relief money. She said more than 600 new addresses have broadband thanks to these efforts.

Despite the claims of change, the effects still aren’t always felt in rural corners of Virginia. The 600 households mentioned by Yellen represent less than 1 percent of the total homes without fast connections. Thorne, the Democratic political campaigner, fumed as she recalled unserved residents who know internet infrastructure is within reach. “We put up these ridiculous barriers to just actually getting it to people,” she said.

“There's not the shovels in the ground,” she added. “That's what people need to see.”