Arkansas’ preliminary proposal to invest around $300 million in federal funding to provide internet infrastructure to 79,000 homes and businesses is “at the top of the pack” compared to other state proposals, according to a broadband expert.
Despite federal changes to the program that aimed to cut costs, and in turn encourage satellite infrastructure, the vast majority of underserved locations in the state will receive comparatively more reliable fiber infrastructure, unlike other states in the region. The proposal still faces federal hurdles and uncertainty over the remaining $700 million in available funding.
“Based on the results we’ve seen so far, Arkansas is incredibly strong,” said Drew Garner, director of policy engagement at the Washington-based nonprofit Benton Institute for Broadband & Society. “It means that nearly 80,000 Arkansan homes and businesses are going to get some of the best broadband that is currently available.”
On Monday, the state released its proposal to dole out $308 million in funding from the Broadband Equity, Access and Deployment Program, better known as BEAD, to 79,000 locations across the state. It came after sweeping federal changes to the program in June, which aimed to cut costs by removing a fiber preference and affordability requirements, among other changes.
The changes required the Arkansas Broadband Office to redo its bidding round. The average cost per BEAD-eligible location is $3,899, per the proposal. According to the notice, the federal changes to the program saved the state an additional $276.9 million and around $3,000 per location.
The BEAD Program started in 2021 and provided the state $1 billion to invest in broadband, a high-capacity transmission technology that is more than 100 times faster than dial-up internet. Under the proposal, 100% of BEAD-eligible locations will receive broadband — a distinction Arkansas shares with only one other state, Montana.
The cost-saving measures implemented in June came at the expense of quality infrastructure for Arkansans, Garner said.
When the changes were implemented, Garner told the Arkansas Democrat-Gazette that it would ultimately lead to more satellite coverage across the country because satellite infrastructure is cheaper to install.
But satellite service is more expensive and less reliable than fiber. Starlink’s starting residential plan is $80 per month. Comcast Xfinity’s starting fiber plan is less than half that at $30 per month.
“Satellite internet is like a dirt road. Fiber internet is like a highway. You can build a few houses at the end of a dirt road, but you can build an entire city at the end of a highway,” Garner told the Democrat-Gazette in April.
The state’s proposal is doing better in this regard than many other states, said Garner.
A total of 76% of underserved locations in Arkansas are set to get end-to-end fiber infrastructure under the proposal. The state will award $290 million to 19 companies to cover 60,386 locations. The largest preliminary grant award of $88.45 million went to Berryville-based Hometown Internet, LLC.
Satellite service will be extended to 16% of locations. Elon Musk’s SpaceX and Amazon’s Kuiper are set to get a total of $10.2 million to serve nearly 13,000 locations, most of which are in central and western western and Central Arkansas.
Approximately 5,480 locations in eastern Arkansas are set to get fixed wireless at a cost of $5.2 million. Fixed wireless is slower and less reliable than fiber. Roughly half of the 12 counties in eastern Arkansas are classified as “persistent poverty counties,” according to the East Arkansas Planning & Development District.
“It’s worrisome. Historically, poor areas, rural and urban, get worse service (they’re less lucrative investments),” Garner said in a text message. “Original BEAD was supposed to fix that with its fiber preference. But new BEAD, with its low bid preference, has incentivized the least expensive, not highest quality, projects.”
Still, the state’s proposal did a good job mitigating the “damage” of the federal BEAD changes, said Garner.
“I would say Arkansas is at the top if the pack in terms of having a quality proposal,” Garner said. “Relative to what we’re seeing in other states, it’s very strong.”
“Especially across the country, we’re seeing a large shift or big wins for satellite and wireless. But that’s not really the case so much in Arkansas,” Garner said.
Around 23% of Oklahoma’s locations are still listed as “TBD,” according to the state’s proposal. For those that have been decided, just under 50% will get fiber infrastructure, about 25% less than Arkansas. Missouri has yet to release a proposal.
Texas received an extension on its final BEAD preliminary proposal.
Glen Howie, the director of the Arkansas State Broadband Office, could not be reached for comment regarding whether the changes introduced in June had an impact on the fiber build-out included in the proposal.
“Would we have seen more fiber under the original BEAD rules? Probably. In fact, almost certainly,” Garner said.
The proposal also identified over 1,000 community anchor institutions, which are defined in the program as entities such as a library or school that provide broadband access. Institutions in the proposal include the Devalls Bluff Public Library and the Lake Village Police Department.
There were 22 institutions removed from Arkansas’ list of BEAD-eligible locations after the June policy shift, according to the proposal.
The state’s proposal has guardrails, including a clause that requires each subgrantee to provide services to customers no later than four years after receiving the subgrant. The office will also establish a “comprehensive monitoring plan” and requires a minimum of quarterly updates from subgrantees.
There still are federal hurdles to clear.
The plan will be submitted to the federal government by Sept. 4. If it receives federal approval and final authorization from the state legislature by Dec. 4, construction of the new broadband systems could begin as soon as the first half of 2026, according to a news release.
But the federal government could reject the proposal and encourage the state to push costs down even further.
“Obviously this administration and the Department of Commerce are very interested in cutting costs and finding the cheapest applications possible. So we’re aware, we’re concerned that they may try to push costs down even further,” Garner said.
According to the proposal, the office selected a “combination of the project proposals with the lowest overall cost to the Program.” However, this could have involve selecting a proposal that was not the lowest-cost option for a location, but was part of the combination of selected projects with the lowest overall cost to the Program.”
There is also uncertainty surrounding the roughly $700 million in non-allocated funds, which are called “non-deployment funds.” Arkansas was awarded around $1 billion for the program in 2021, but has only proposed using $308 million.
Under the original program guidance, unused program non-deployment funds could be utilized for other internet-related programs. It is currently unknown what will happen to those funds until the administration releases a new guidance.
On Aug. 25, 10 federal Democratic representatives asked the Department of Commerce to clarify how states can use these non-deployment funds.
“The law is clear: BEAD funding is not limited to broadband infrastructure deployment,” the letter says. “Broadband deployment is critical; however its long term success requires parallel investment in the foundational nondeployment activities that enable effective implementation and adoption.”
In an email, Howie said the state is still awaiting guidance on that funding from the federal government.
Lucas Dufalla is a Report for America Corps member. Financial support for this coverage came from the Community Journalism Project.