Key Takeaways
- •Secretary Lutnick announced BEAD program restructuring saved $21 billion, achieving universal broadband coverage with $21 billion in unspent funds.
- •Secretary Lutnick stated BEAD reforms under the Trump administration made the program technology-neutral, competitive, and disciplined, saving taxpayers $21 billion.
- •Senator Van Hollen (Democratic-MD) pressed Secretary Lutnick on discrepancies between his past statements about Jeffrey Epstein and recently revealed files.
- •Republicans praised BEAD reforms for cost savings and efficiency, while Democrats expressed concern over reduced state allocations and the Secretary's credibility.
- •The Department of Commerce will begin a "listening tour" tomorrow to gather ideas for the best use of the $21 billion in unspent BEAD funds.
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Hearing Analysis
Key Testimony
The Senate Appropriations Subcommittee on State, Foreign Operations, and Related Programs met on February 10, 2026, to conduct an oversight hearing regarding the Department of Commerce’s broadband deployment efforts and foreign assistance priorities. While the hearing title suggested a focus on Haiti, the actual proceedings centered almost exclusively on the implementation of the $42.5 billion Broadband Equity Access and Deployment (BEAD) program, the upcoming 2030 Census, and international trade policy regarding artificial intelligence (AI) chips. Secretary of Commerce Howard Lutnick served as the sole witness.
Chairman Jerry Moran (R-KS) opened the hearing by expressing frustration that four years after the BEAD program was authorized, no projects had been completed. He highlighted a recent "restructuring policy notice" issued by the National Telecommunications and Information Administration (NTIA) intended to roll back regulatory burdens. Secretary Lutnick testified that the Trump administration had shifted the program toward "technology neutrality," moving away from a "fiber-only" mandate to include fixed wireless and satellite options. Lutnick claimed this shift had already saved taxpayers approximately $21 billion by driving down costs through competition. He cited Louisiana as a primary example, where the cost to connect high-cost locations reportedly dropped from $120,000 per home under previous rules to an average of $4,000 to $7,000.
Overview
A significant portion of the hearing addressed the "unspent" $21 billion resulting from these cost savings. Senators Moran, Shelley Moore Capito (R-WV), and Deb Fischer (R-NE) expressed concern that these funds might be rescinded or returned to the Treasury. Secretary Lutnick assured the subcommittee that there were no plans for rescission and that the money would be spent according to the statute. He announced a "listening tour" to begin the following day to gather ideas for the remaining funds, suggesting potential uses such as utility pole attachments, public safety communications, telehealth, and cybersecurity. Senator Moran also discussed his "Broadband Grant Tax Treatment Act," which would exempt BEAD grants from being taxed as corporate income, a move Lutnick suggested would further lower deployment costs.
Partisan Dynamics
Partisan dynamics were sharp, particularly regarding Secretary Lutnick’s personal credibility. Ranking Member Chris Van Hollen (D-MD), along with Senators Jeff Merkley (D-OR) and Christopher A. Coons (D-DE), questioned the Secretary about newly released "Epstein files." They alleged that Lutnick had misrepresented the extent of his relationship with Jeffrey Epstein during his confirmation hearings. While Lutnick maintained he had only three brief encounters with Epstein over 14 years and denied any wrongdoing, the Democratic senators pointed to at least eight instances of interaction in the files, including a 2012 family lunch on Epstein’s private island. Senator Van Hollen argued these discrepancies called into question the Secretary’s fitness for office.
The subcommittee also delved into the 2030 Census. Senator Gary C. Peters (D-MI) challenged the Department’s decision to cancel several 2026 census test sites. Lutnick defended the move as an efficiency measure, announcing a new plan to utilize the U.S. Postal Service (USPS) to conduct the census, arguing that postal workers already visit every home in the country. Senator Peters also raised concerns about reports that the Department intended to add a citizenship question to the census, citing research that it could lead to an undercount. Lutnick acknowledged that citizenship is not required for apportionment under the Constitution but did not commit to excluding the question from future tests.
Overview
On the topic of trade and national security, Senator Jack Reed (D-RI) and Senator Coons questioned the Department’s oversight of AI chip exports. Senator Reed expressed alarm over the sale of Nvidia H200 chips to China, arguing that "self-certification" by companies was insufficient to prevent military diversion. Lutnick countered that the license terms were "very detailed" and coordinated with the State Department. Additionally, Senator Coons raised the issue of tariffs on homebuilding materials like lumber and drywall, noting they add roughly $17,000 to the cost of a new home. Lutnick remained non-committal on tariff exemptions, stating the need to protect domestic manufacturers.
Industry Impact
Specific industry impacts discussed included the telecommunications sector, where providers are navigating new "technology-neutral" bidding processes. Senator Jeanne Shaheen (D-NH) highlighted a conflict with SpaceX, noting that the company had sent "riders" to states like New Hampshire demanding guaranteed payments regardless of service uptake. Lutnick explicitly rejected these demands, stating that any provider unwilling to follow federal guidelines would be replaced. The agricultural sector was also mentioned by Senator Fischer, who advocated for using unspent BEAD funds for "precision agriculture" connectivity.
Key Testimony
The hearing concluded with Chairman Moran requesting that the Department provide written responses to outstanding questions within 30 days. Notable organizations mentioned during the testimony included the NTIA, the Census Bureau, the USPS, Nvidia, SpaceX (Starlink), and Tether (in relation to stablecoin regulation under the "Genius Act"). While the Secretary emphasized a "business-like" approach to government efficiency, the subcommittee remains divided on the administration's transparency and the legal boundaries of redirecting billions in infrastructure funding.
Transcript
[Gavel sounds.] Good morning. Committee will come to order. Secretary Lutnick, thank you for accepting our invitation to join us today to discuss the Department of Commerce's broadband deployment efforts, including the implementation of the Broadband Equity Access and Deployment, or BEAD program. Four years ago, Congress authorized the BEAD program, providing the National Telecommunications and Information Administration within the Department of Commerce with $42.5 billion to provide grants aimed at bridging the digital divide. The BEAD program is the largest, the largest ever single federal investment in broadband deployment and was intended to connect Americans lacking reliable broadband connectivity. If we fail after we put so many dollars into broadband availability and we still have places in the country that don't have broadband, we have really failed. There should be sufficient resources for this goal to be accomplished. But four years later, not a single BEAD-funded project has been completed, much less initiated, and not a single unserved or underserved American has connected to broadband service through the BEAD program. Under the Biden administration, implementation was encumbered by complex and often unworkable regulatory and financial burdens and hurdles for states and for providers. Stringent labor and workforce provisions, climate and environmental objectives, effective rate regulation imposed on by low-cost plan requirements, and convoluted permitting processes dissuaded many providers, especially those in rural areas, from participating. In June of 2025, NTIA issued a BEAD restructuring policy notice aimed at rolling back these burdensome requirements and expediting implementation of the BEAD program. That policy notice, NTIA identified obstacles to deployment under existing BEAD guidance and outlined several changes with the goal of maximizing the benefit of the bargain that Americans should expect from the investment in broadband deployment under the BEAD program. Secretary Lutnick, I commend your department's and NTIA's efforts to relieve undue burdens on state broadband offices and providers. However, I am concerned that certain changes to the BEAD program implemented under the revised guidance may jeopardize the efficiency and the effectiveness of the program. Following the June restructuring, state broadband offices worked diligently with NTIA and providers to modify proposals and realign their BEAD plans according to the guidance issued by NTIA. As part of that process, state broadband offices were urged by NTIA to revisit many projects and locations to find additional cost savings. The resulting final BEAD plans submitted by many states saw drastic reduction in BEAD fund requests. As an example, in my home state of Kansas, BEAD secured roughly $452 million in its BEAD allocation. After the benefits of the bargain reduction, Kansas's final BEAD plan requests only $166.6 million of the original allocation, leaving over $200 million in unspent funds and little clarity from the Department of Commerce and NTIA on how those funds may be used. This uncertainty has caused concern among state broadband offices who are unable to plan broadband initiatives that rely on the balance of their BEAD allocation. Additionally, I'm concerned that the worthwhile goal of maximizing the impact of taxpayer dollars has prioritized achieving the lowest cost rather than the best value for BEAD projects. This approach risks repeating the errors of previous federal broadband deployment programs that failed to account for the unique connectivity needs in each of our states. I'd also like to discuss your outlook for the BEAD program and the future of federal broadband deployment efforts, including how unspent funds should be treated. We will also discuss broadband deployment provisions included in recently enacted appropriations legislation produced by this subcommittee and other subcommittees of the Appropriations Committee. Secretary Lutnick, again, thank you for being here, and I now recognize the ranking member, Senator Van Hollen, for his opening statement.
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