When the federal government announced the $42.45 billion Broadband Equity, Access, and Deployment (BEAD) program, its goal was simple: bridge the digital divide by providing broadband access to underserved areas. Rural states, often struggling with connectivity due to their geography and sparse populations, seemed like obvious beneficiaries. But when you dig into the data, the story is more complex—and at times, counterintuitive.
The allocation of BEAD funding doesn’t always match rurality or the number of unserved locations. Instead, a mix of factors—some understandable, others puzzling—shape where the dollars go. The result? A distribution of resources that raises more questions than it answers.
Do Rural States Get Their Fair Share?
Take Montana and Alabama, for example. Both are highly rural states—Montana at 44.2% rural and Alabama at 44.4%. Alabama received $1.4 billion in BEAD funding, compared to Montana’s $628 million. At first, this seems reasonable—Alabama has more unserved locations. But per unserved location, the story flips: Montana receives about $6,000 per location, while Alabama gets $4,200.
However, broadband deployment costs vary by geography. Montana’s rugged terrain, colder climate, and vast distances between communities make broadband expansion far more expensive than in Alabama, where infrastructure can be built in milder conditions with fewer engineering challenges. Additionally, labor costs in Montana are higher—the minimum wage is 31% higher, and the average salary is 51% higher than in Alabama, further driving up deployment expenses.
This raises a critical question: Is Montana’s higher per-location funding a sign of unfair allocation, or does it reflect the real cost of building in one of the country’s most challenging environments? While the BEAD formula considers geographic challenges, the extent to which it addresses the full cost differences between states remains a point of discussion.
Urban Areas as Outliers
Perhaps the most surprising element of the BEAD funding story is the allocation to urban areas. The District of Columbia, for example, has just 184 unserved locations but received over $100 million. That’s more than $600,000 per location—an astronomical figure compared to rural states where per-location funding often falls below $10,000.
D.C.’s high per-location funding is primarily due to the BEAD program’s $100 million minimum allocation rule, which ensures every state and territory receives a baseline amount, regardless of the number of unserved locations.
Still, the question remains: should funding formulas guarantee such high minimum allocations for urban areas with minimal broadband gaps? At the same time, larger rural states must stretch every dollar across thousands of miles of unserved terrain.
Middle America Gets Squeezed
Many Midwestern states—like Iowa (36% rural) and Kansas (28% rural)—fall into what could be called a “middle squeeze.” They’re not small enough to benefit from outsized per-location funding or large enough to secure headline-grabbing totals. Instead, their allocations often fall short of what’s needed to tackle widespread connectivity issues.
For example, Iowa received $415 million in BEAD funding, while West Virginia, which is roughly half its size, secured $1.2 billion—nearly three times as much. While West Virginia is more rural, the gap in funding raises questions about whether the current formula disproportionately favors some rural states over others.
Additionally, Midwestern states tend to have large unserved areas but lack the geographic challenges that might justify higher per-location funding, meaning they receive neither the extreme rural cost adjustments nor the urban minimum allocations. The result? A broadband funding formula that leaves them behind—not due to lack of need, but due to where they fall in the funding formula’s blind spots.
The Myth of “Rural Equals More Funding”
Even the most rural states don’t always see proportional funding advantages. West Virginia and Mississippi, with more than half their land classified as rural, don’t receive notably higher funding per unserved location than less rural states. Their per-location allocations often hover near the national average—or even fall below it.
This disconnect challenges the assumption that rurality alone drives funding. It also underscores the limitations of the current allocation formula, which may not adequately prioritize the hardest-to-reach communities.
What the Numbers Reveal
If you plot rurality, unserved locations, and BEAD funding on a chart, the trend isn’t as clear as one might hope. Instead of a neat correlation where rural states receive proportionally more funding, the data paints a more fragmented picture. Smaller states and urban areas often receive higher per-location funding, while larger rural states must stretch their dollars further.
For example:
- Montana vs. Hawaii: Montana, with its vast rural stretches, receives significantly less per location than Hawaii, with far fewer connectivity challenges.
- West Virginia vs. D.C.: Despite its rugged terrain and thousands of unserved locations, West Virginia’s per-location funding pales compared to D.C.’s $600,000-per-location windfall.
The Bigger Implications
The BEAD program was designed to bring high-speed internet to underserved communities, but its current allocation approach risks perpetuating existing disparities.
The funding formula prioritizes a mix of unserved locations, high-cost areas, and baseline guarantees, which can sometimes result in differences in funding allocation per location.
Rural states and regions with significant connectivity challenges may be underserved by a system that prioritizes other factors, such as existing infrastructure, political influence, or population density. This raises a critical policy question: Should funding be restructured to focus more on unserved locations and rurality?
The Path Forward
To truly bridge the digital divide, policymakers must address the structural issues revealed by the BEAD funding data. A more targeted approach—prioritizing states with the greatest needs—could ensure resources go where they’re most impactful.
Some potential solutions include:
- Adjusting Funding Formulas for Geographic Costs: States with more challenging terrain and higher labor costs could receive additional weighting, ensuring their allocations reflect real-world expenses.
- Reevaluating Minimum Allocations for Urban Areas: While all states and territories need funding, excessively high per-location allocations in D.C. should be reconsidered.
- Creating a Safety Net for Mid-Sized Rural States: States like Iowa and Kansas without extreme categories should have a funding mechanism that better accounts for their broadband gaps.
The stakes are high. High-speed internet isn’t just a convenience—it’s a necessity for education, healthcare, business, and economic development. Without a funding approach that prioritizes rural needs and cost realities, we risk deepening the divide the BEAD program was designed to close.
A Missed Opportunity?
The disparities in BEAD funding reveal more than just a mismatch between rurality and dollars. They highlight the complexities of federal resource allocation, the unintended consequences of formula-driven programs, and the persistent challenges of ensuring fairness in public policy. Whether these insights spark meaningful reform—or remain another footnote in the story of rural America—remains to be seen. But one thing is clear: the digital divide won’t close itself. If we’re serious about connecting the unconnected, it’s time to closely examine the numbers.
