Payment upon delivery is how most business-to-business purchases work. You agree a cost, deliver the item, then get paid. Being paid before delivery gives no incentive to deliver what was requested.
We can solve rural access. You have a "Rural Fibre Project" like you had the "Rural Electrification Project" and you get on with life.
Ajit Pai and the telecoms simply don't want to because the telecoms would vaporize overnight everywhere that suddenly got fibre.
If starlink does what it's supposed to, it should provide a pretty good experience that works best in rural areas precisely because of the sparseness of users that makes wiring each home expensive.
Certainly, giving the money and hoping it works as advertised isn't a good idea --- for all providers. For nationwide providers, these should be allocated whatever way, then the provider should post a bond and get their money and the grant money upon completion. If they don't complete it on time, the grant money and the bond roll down to the projects that were approved but didn't get funded because of the spending cap. Posting a bond for a hyper local provider might be problematic, but hyper local providers probably have a better track record of delivery, so they could have more generous pay as you go grant terms.