Joint committee approves $218 million BEAD award to connect 43,871 Tennessee locations

The Joint Committee on Ways and Means voted to accept a $218,000,000 federal BEAD (Broadband Equity, Access and Deployment) grant for Tennessee and authorized the Tennessee Department of Economic and Community Development (TNECD) to proceed with contracting and deployment.

Taylor Beatty, broadband director at the Tennessee Department of Economic and Community Development, told the committee the award covers 43,871 households and businesses that lack high-speed internet, with a regional breakdown of about 20,000 locations in East Tennessee, 18,000 in Middle Tennessee and 4,400 in West Tennessee. "We are seeking approval to accept the $218,000,000 in funding to be able to complete broadband deployment statewide," Beatty said.

The presentation summarized the state's BEAD timeline: an initial proposal was submitted in December 2023, NTIA-approved processes and challenge rounds took place in 2024, applications ran through 2025, and the state submitted its final proposal in September. Beatty said NTIA approved the proposal in February, clearing the way for the state to accept the award, begin contracting this spring and start project implementation in spring and summer, with an estimated total buildout by 2028.

Committee members pressed TNECD on costs, technology choices and program safeguards. One member noted roughly $781 million already committed in state and federal broadband funding and asked why earlier cost estimates for 100% coverage differed. Beatty said earlier departmental estimates were lower but that federal speed-threshold changes and a shift to a technology-neutral approach expanded the population classified as unserved, increasing projected costs. "That original estimate ... was around $400,000,000," Beatty said, adding that the federal program later changed its fiber preference and became technology-neutral, which altered cost estimates.

Representative Williams asked whether the $218 million will achieve 100% coverage; Beatty replied that the award covers the remaining unserved households. Members also asked about about $600 million of the original allocation that remains available under the state's allocation; Beatty said the state is petitioning NTIA to allow use of some of those "non-deployment" funds for adoption, affordability and other complementary programs. He also said $16,000,000 of the broader allocation is the department's permitted administrative allowance for this tranche to support staffing and implementation through 2030.

On technology, Chairman Watson pressed whether the plan still aimed for fiber to every home. Beatty said the BEAD program is technology-neutral and will include satellite and hybrid fiber-coax where fiber is not feasible; he added the department considered factors such as population density and tree canopy when approving alternative technologies. "All of these households are going to have a high-speed technology solution," Beatty said, noting decisions balanced cost and context.

Members asked how TNECD will enforce buildout and guard against grantee defaults. Brooke C. Carlton of TNECD said the state's contract language and the Tennessee Broadband Act include clawback language: "if a grantee does not fulfill that contract and build out to 100% completion, they'll owe the money back plus 20%." TNECD staff said NTIA is still finalizing guidance on federal clawback processes, but the state will require quarterly reporting, milestone-based payments and midpoint monitoring; funds can be recovered and re-awarded to other providers if necessary.

Committee members also asked about adoption rates and affordability. Beatty said take rates in grant-funded areas typically range from about 40% to 60%, with some projects reaching 80% to 90%. He identified affordability, digital skills gaps and awareness as key barriers and said the department is pursuing grant-funded adoption programs and asking NTIA to allow non-deployment funds for statewide adoption efforts.

A member asked about advanced connectivity goals such as quantum and AI infrastructure. Beatty said TNECD is exploring options with NTIA to use remaining allocation for connectivity infrastructure that would support research and economic development; he noted the state has a $20 million budget placeholder for initial work and that larger funding needs would require additional approvals.

After discussion the committee moved to a roll-call vote. Clerks recorded the Senate's four ayes (Senator Johnson; Senator Lamar; Senator Watson; Senator Yeager/Chairman Stevens) and the House's ayes (Representative Camper; Representative Faison; Representative Garrett; Representative Miller; Representative Moody; Representative Sparks; and Representative Williams, as recorded in the roll call). The motion to accept the grant award carried.

The committee also announced that annual federal-aid reports for the FY24'FY25 cycle had been received and placed on file. The meeting was then adjourned.

Votes at a glance: The joint committee approved acceptance of the $218,000,000 BEAD award; roll-call votes were recorded by clerks and the motion carried.

Next steps: TNECD will accept the award from NTIA, begin contracting with selected ISPs this spring, monitor progress through quarterly reports and milestone payments, and report back to the legislature as required by statute.