By Brad Thomas, Editor, Intelligent Income Daily

There are billions of dollars of free money up for grabs.

That’s thanks to the 2021 Infrastructure Investment and Jobs Act.

It created the Broadband Equity, Access, and Deployment (“BEAD”) program to hand out $42.5 billion in funds. The goal of this program is to expand high-speed internet access.

There’s been plenty of squabbling in D.C. over where the money should go. But last week the White House announced how much each state is going to get.

The biggest winners include Texas ($3.3 billion), California ($1.9 billion), Missouri ($1.7 billion), Michigan ($1.6 billion), and North Carolina ($1.5 billion).

The clock has started ticking. Over the next six months, states will submit proposals for their grant programs and begin getting access to the cash.

That means that awards for free money to build more internet infrastructure are coming soon.

Here at the Intelligent Income Daily, we focus on finding the safest income investments on the market. When the government is handing out free money, we pay attention… and look for the companies that are going to benefit.

Today, I’ll give you three reasons why big telecommunication companies have an advantage when it comes to winning government subsidies. I’ll also give you the names of three companies that could get a bunch of free money from the BEAD program. By investing now, you could lock in outsized profits as they cash in on government handouts.

The Big Three Reasons Behind Big Telecoms’ Profits

1. Money and experience

BEAD is a public-private partnership. Even though the government is awarding free money, the companies winning those awards also have to invest their own money.

Large national telecommunication companies have the large amounts of money needed to invest in the infrastructure that BEAD awards are targeting.

They also have been participating in these types of programs for years. So they have the experience to meet all the requirements.

For example, AT&T has added 130,000 customer connections over the past year using awards from previous government subsidies such as the American Rescue Plan Act.

2. Existing infrastructure

Another advantage these large companies have is they already own existing infrastructure.

In some cases, using government funds to expand to new areas allows these companies to build infrastructure that’s shared by nearby areas that don’t qualify for awards.

In this way, these companies get a double benefit because they get more new customers and can also cheaply upgrade service for some of their existing customers to get better returns.

3. Lobbyists and laws

Large companies can afford lobbyists to influence the laws that impact where government funds go.

Figures from internet research outfit BroadbandNow show that 16 states have laws that restrict cities from setting up local broadband networks.

For example, in Michigan, state laws require local governments to ask for bids from private companies before setting up public broadband services.

Laws like these reduce potential competition for BEAD awards, giving the larger companies more opportunities to win funding.

The Big Three Companies Who’ll Win Out

Here are three companies that could win a lot of money from the BEAD program:

  • AT&T (T) – At a recent conference, AT&T indicated its interest in applying for subsidies, saying that “BEAD gives you the opportunity to probably fill in areas that economically you might not have had high on the priority list.” AT&T yields 7%. Its shares are trading at just 6.5x earnings – 40% below its average of 11x earnings over the past decade.

  • Comcast (CMCSA) – Comcast also said it is preparing to participate in the BEAD program, on an “opportunity-by-opportunity, market-by-market” basis. Comcast has been growing its dividend for 16 years and recently raised it by 7.4%. Shares currently yield 2.8% and trade at 11.4x earnings – 35% below its average of 17.5x earnings over the past decade.

  • Verizon (VZ) – Verizon hasn’t committed to pursuing BEAD funding yet, but it will look to participate “where it makes the most sense.” Verizon has been growing its dividend for 18 years. It currently yields 6.9%. Shares trade at 8x earnings, 35% below its average of 12.5x over the past decade.

Billions of dollars in government subsidies are coming soon through the BEAD program. And a few large companies will have an advantage when it comes to winning free money.

Thanks to the discounted levels they’re trading at today, they present a good way to boost your dividend income.

And speaking of billions of dollars up for grabs, I recently released a presentation on an income stream powered by one of the most successful – and profitable – businesses in the world.

You can’t secure this kind of income simply from buying shares in the company. But you can create your own royalty-like payouts, regardless of which business is the biggest beneficiary of the massive long-term trends we track.

To find out how and what makes this such a lucrative setup right now, click here.

By investing sooner rather than later, you could lock in outsized profits and take advantage of these companies’ advantages.

Happy SWAN (sleep well at night) investing,

Brad Thomas
Editor, Intelligent Income Daily