Internet service providers are eager to access government funding from a $42.45 billion fund, but they are pushing back against the Biden administration’s requirement to offer affordable broadband services for as low as $30 a month to low-income individuals. The Broadband Equity, Access, and Deployment (BEAD) program mandates that ISPs that receive federal funds must provide at least one low-cost broadband service option for eligible subscribers.
While the Biden administration argues that they are simply enforcing the legal requirement, over 30 broadband industry trade groups claim that this constitutes illegal regulation of broadband prices. The fund is managed by the National Telecommunications and Information Administration (NTIA), which distributes the money to states, and then to ISPs. Before receiving funds, each state must have an approved plan that includes a low-cost option, with nearly half of the states already obtaining approvals.
Although the law mandates ISPs to offer a low-cost plan, it also prohibits the US from regulating broadband service rates. ISPs argue that the NTIA’s specific pricing demands violate this ban on rate regulation. They claim that the $30 rate for the low-cost service option is not feasible in areas with high costs and difficult access.
Groups like USTelecom, representing major telcos like AT&T, Verizon, and CenturyLink/Lumen, are among those opposing the $30 rate. They argue that the rate does not align with the economic realities of providing broadband in challenging areas. Lobby groups from various states have signed a letter urging the NTIA to reconsider the approved state plans and align the rates with realistic costs.
Despite the pushback from ISPs, many states have already received approval for their grant plans, including requirements for low-cost options. The NTIA recently approved initial proposals from New Mexico and Virginia, bringing the total count to 22 states, along with several territories. However, another 30 states and territories are awaiting approval after submitting their proposals.
The lobby groups are calling for a revision of the low-cost service option rates in approved state plans to better reflect providers’ actual costs. They suggest using benchmarks like the FCC’s Urban Rate Survey to determine more realistic pricing. The debate between ISPs and the government continues as the push for affordable broadband access remains a key issue in expanding internet connectivity across the country.
