Conservative Groups Oppose BEAD Low-Cost Rules

WASHINGTON, March 11, 2024 – More than 20 conservative groups urged GOP lawmakers last week to “swiftly hold NTIA accountable” for what they argue is improper implementation of the Joe Biden Administration’s $42.5-billion broadband expansion program. 

In a March 7 letter the groups, led by Americans for Tax Reform, argued the National Telecommunications and Information Administration’s policy requiring states to ensure participating providers set out a low-cost plan constitutes “rate regulation.”

The letter asked House Commerce Committee Chair Cathy McMorris Rodgers, R-Washington, Senate Commerce Committee Ranking Member Ted Cruz, R-Texas, and other Republican leaders to “demand the release of BEAD funds” to states whose plans do not include a mandatory price point for low-income households.

The agency is barred by the Infrastructure, Investment and Jobs Act from directly regulating rates for broadband service as part of the Broadband Equity, Access and Deployment program. NTIA rules do require states — the entities ultimately awarding grants under the program — to ensure providers set up affordable plans for low-income households either by setting a price point or crafting a formula to calculate it.

Republicans in Congress have taken issue with the policy before. Rodgers and all 16 of her colleagues on the House Communications and Technology Subcommittee wrote in December to NTIA Administrator Alan Davidson, accusing him of violating the infrastructure law by approving state plans that include mandatory prices for low-cost plans. 

That letter came weeks after a House oversight hearing at which the lawmakers repeatedly made this point to Davidson. He defended the policy, saying providers are not required to participate in BEAD and noting the NTIA is not handing down a blanket price requirement.

“If we’re going to spend billions of dollars of federal money, and people are going to take that money,” Davidson said at the hearing, “it’s not unreasonable to ask them to be careful about affordability when they’re doing so.”

Only Louisiana’s plan for awarding grants under BEAD has been fully approved so far. The state sets its low-cost option at $30 – set to match the subsidy provided by the imperiled Affordable Connectivity Program – but gives applicants room to raise that up to $65 if necessary for the financial sustainability of a project.

In response to a draft proposal from Virginia which would have providers propose and justify their own low-cost options, the NTIA asked for more concrete requirements. 

The agency “must be able to determine the impact to a customer at the Initial Proposal stage – it isn’t enough to know as of the Final Proposal. Thus the low-cost option must be established in the Initial Proposal as an exact price or formula,” it said in a letter to the state.