Trump's Tariffs Are One of Several Issues Raising BEAD Concerns

SHLB Executive Director Joey Wender said members are asking about the uncertainty caused by tariffs and their effect on the broadband industry. “Over the last couple of months, we have heard from so many SHLB members with the same question,” he said: “What will the new tariffs mean for broadband deployment, network maintenance and the supply chain?”

New Street’s Blair Levin said that last fall, most investors didn't think President Donald Trump would impose sweeping tariffs “because it makes no economic sense.” It was clear last year that tariffs aren’t related to economics, Levin said. “This is about psychology, power, dominance, leverage [and] dealmaking,” he said. The reasons the administration gives for tariffs “contradict each other.”

“It’s going to be chaotic for a while,” Levin added. Companies “can’t really make plans for capital investments going forward” until they have more clarity. But he also noted that telecom and cable companies have weathered the Wall Street downturn that's tied to tariffs better than most industries. About 70% of the cost of deploying broadband is labor, which isn’t affected by tariffs, and most conduits used are manufactured in the U.S., he said.

Providers are looking at more than tariffs when they think about BEAD, said Marissa Mitrovich, vice president-public policy at the Fiber Broadband Association. They’re concerned about “grant timelines, affordability, the onshoring that has already happened,” she said: “What we need is a roadmap that will allow our industry to move forward smartly and strategically. … Predictability is the most important message.”

The Trump Department of Commerce has paused BEAD awards, and more guidance is unlikely before the summer, Levin said. Commerce Secretary Howard Lutnick “has been tied up on the tariff stuff,” and the NTIA staff is waiting to hear what Lutnick wants.

Some provisions imposed by the Biden administration, like diversity, equity and inclusion and workforce requirements, are gone, Levin said. “If that’s all they do, that’s fine.” The problem is that the administration appears likely to ask the states to reapply for BEAD grants “with a high-cost threshold that is designed to shift funds from fiber to satellite,” he said. That could cause “significant delays,” and the $42 billion in funding for the program won’t go as far.

Levin said Republican senators are speaking out, pushing to “just let the states finish the job.” But “I don’t know that Lutnick cares” beyond “the audience of one, which is to say Trump,” and “occasionally the audience of two,” including Elon Musk. “The Trump team, which so bitterly criticized the Biden administration for causing delays, now has caused very significant delays.”

Mitrovich said she’s less concerned that the Trump administration is reviewing the BEAD program. If you take over an organization, “you want to look under the hood, you want to see what’s actually happening,” she said. The Fiber Broadband Association is “cautiously optimistic” that “there will be a mix, and fiber will have a strong place in that mix." The group hopes the administration will move “sooner rather than later.”

Trump said on Joe Rogan's show in October that “satellite is better than fiber, and it costs nothing,” Levin recalled. “Those two facts are wrong,” but all that matters is “what does Trump believe?” he said. “From what I can tell, the NTIA staff has no idea what Lutnick wants to do.”

In a filing posted Thursday, Summit Ridge Group President Armand Musey warned the FCC about the effect of tariffs on the agency’s Supply Chain Reimbursement Program (SCRP). Musey represents companies that are replacing unsecured network gear from China through the program.

“The Commission is undoubtedly aware that while the SCRP is now ‘fully funded’ relative to the early 2022 applications, much of the necessary replacement equipment is currently facing potentially significant but unknown tariff levels,” Musey said (docket 18-89). “Equipment manufacturers will need to pass the tariff costs on to their customers, including SCRP participants. The uncertainty surrounding the potential tariff levels, combined with fixed SCRP budgets, creates significant planning problems for SCRP participants.”

IPC, which represents electronics manufacturers, welcomed a pause in the 145% tariff on Chinese goods (see 2505120050). The group previously warned that tariffs could increase the price of smartphones in the U.S. by as much as 48.8% (see 2504040023). “International collaboration is key to building more resilient supply chains and sustaining innovation and resilience,” said Richard Cappetto, IPC senior director-U.S. government affairs, in an email late Tuesday: “This pause gives the world’s two largest economies a chance to reshape their trade relationship.”