Roughly $700 million in federal funding is being pumped into broadband infrastructure in Arkansas, but it faces an uncertain future after President Donald Trump issued an executive order aimed at limiting the state’s ability to regulate artificial intelligence, according to national broadband policy experts.
The order ties the state’s access to broadband funds to the state of AI regulation and comes as the state of Arkansas inches closer to implementing the proposed $1.2 billion Broadband Assets, Access and Deployment Program, which aims to connect 79,000 underserved Arkansans.
The program is worth about $700 million and has already been targeted for cost cuts since Trump took office in January.
“Without these funds…the physical infrastructure part[of broadband plans]will be slowed down. States’ efforts to address all aspects of the digital divide will be hampered,” said Drew Garner, director of policy engagement at the Washington-based nonprofit Benton Broadband & Society Institute.
At the end of 2021, former President Joe Biden’s administration announced a $42.45 billion program, better known as BEAD, the largest investment in broadband infrastructure in the nation’s history. It aims to bring affordable internet service to rural and low-income households across the country.
Arkansas has received about $1 billion in investments in broadband, a high-capacity transmission technology that is much faster than dial-up Internet. A wrench was thrown into the state’s plan when the Trump administration initiated changes aimed at cutting costs and promoting unreliable satellite access.
This change required states to restart their bidding and proposal processes. The Arkansas Broadband Authority announced the proposal in August.
Under Arkansas’ proposal, the state would use $305 million of these funds to build broadband infrastructure across the state. The future of the remaining nearly $700 million of the $1 billion originally allocated, known as the “non-deployment fund,” has been uncertain since June, when the changes were announced. The federal government did not provide policy guidance to states when it initiated the changes over the summer.
The proposal still needs approval from the state Legislature. If approved, construction would ostensibly start next year, with a target completion date of 2030.
This funding can be used for goals such as accelerating broadband adoption and implementing workforce programs. Gardner said the funding could increase infrastructure permitting staff and support efforts to expand rural telehealth.
Under the state’s proposal last year, the non-deployed funds would be used for a list of “top priorities,” including coding classes, online job assistance and digital systems education for those in the state’s agriculture sector.
“Non-deployment is part of the law. It’s always been part of the law. This is not a new and separate thing. We’ve known about this all along,” Garner said. “By not deploying, states can achieve BEAD’s mission of delivering rapid, affordable, and universal service to all.”
A partial answer to the uncertainty surrounding the fund came on Dec. 11, when President Donald Trump signed an executive order curbing all states’ ability to regulate artificial intelligence. The executive order tasks the federal Department of Commerce with issuing a policy notice specifying the conditions under which states can access BEAD non-deployment funds.
According to the order, states with “onerous AI laws” are not eligible to receive any non-deployment funding. Under the executive order, the federal Department of Commerce is to compile a list of exempt states within 90 days, Garner said.
It is unclear whether Arkansas’ existing AI protections would be considered hardship and prevent access to non-deployment funding.
Asked if the Arkansas Broadband Authority expects non-deployment funds to be seized, Commerce Department spokesman Tyler Hale said the state has not received formal guidance from the federal government.
“We continue to monitor developments at the federal level and will evaluate updates and decisions as additional information is provided (by the federal government),” he said in a statement. “Once that guidance is available, states will evaluate how best to align potential uses of funds with applicable federal goals and requirements. At this time, specific priorities have not been finalized.”
The state Legislature passed a flurry of artificial intelligence bills in the last legislative session, including one that protects individuals from the nonconsensual use of AI models and one that expands the definition of sexually explicit material depicting children to include AI-generated content.
The Dec. 11 executive order is not the first time the Trump administration has attempted to chill national efforts to regulate artificial intelligence. President Trump’s spending bill, passed in July, originally included a 10-year moratorium on states’ ability to enforce AI regulations.
The provision was ultimately removed from the bill, a victory for Gov. Sarah Huckabee Sanders, who had written a letter to the Legislature asking for the provision to be removed.
Sanders spokesman Sam Dubke deferred to the Commerce Department’s statement when asked if the state’s AI law could be considered onerous.
Amid this uncertainty, lawmakers across the country are calling on the federal government to release funding. One of them is Sen. Jane English (R-North Little Rock), the only Arkansan lawmaker to sign a letter to federal Commerce Secretary Howard Lutnick asking him to release non-deployment funds.
“I think non-deployment funding is very important for infrastructure, for workforce, for connecting people. … From my standpoint, I’m a little concerned,” English said in an interview. “This is very important as we continue to talk about AI and data centers. The internet is critical to all of this.”
Four large data centers are planned for Arkansas, including a $4 billion Google project in West Memphis.
English said he believes state law cannot prevent the state from receiving $700 million allocated by the federal government.
Adding to the uncertainty, changes to the broadband program came under fire earlier this month when the U.S. Government Accountability Office, an independent government agency that acts as a fiscal watchdog, ruled that changes to the program in June would require Congressional approval.
Congress could consider changing the rules. Garner said he wouldn’t be surprised if a lawsuit is filed in federal court to release the funds.
“Right now, there’s no new avenue for new legislation. Right now, we’re in the situation we’re in. To be honest, there’s not much we can do. We’re kind of relying on other people’s mercy in a way,” English said.
Lucas Dufala is a member of the American Legion. Financial support for this reporting was provided by the Community Journalism Project.
