Free State Opposed to Price Caps on Retail Broadband
A Free State Foundation report argues that competition and targeted subsidies - not price regulation - are the better path to improving broadband affordability.
WASHINGTON, Sept. 24, 2026 - The Free State Foundation is pushing back hard against calls to regulate broadband prices, arguing that rate caps would raise costs and stifle innovation in an increasingly competitive market.
In a Sept. 9 blog post, Free State President Randolph May and Senior Fellow Joseph Kennedy responded to Penn State professor Christopher Ali, who recently urged policymakers to consider setting maximum broadband rates to help households struggling with bills. May and Kennedy contend that competition and market-determined prices remain the best path to lower costs and greater innovation over the long term.
The scholars point to a steady pattern of faster speeds and lower prices per megabit in recent years, arguing that on average consumers are paying less for more broadband capacity. They warn that rate regulation could undo this trend, recalling earlier eras of telecommunications history when regulators treated transmission facilities as fixed assets, guaranteed providers a fixed rate of return and discouraged competition, leading to stagnant prices and low innovation.
May and Kennedy also highlight current market promotions that they say undercut the case for regulation. They note Comcast offering 300 Mbps for $40 a month with a five-year price guarantee, and Mediacom selling a broadband-mobile bundle guaranteed for two years, both well below the $78 median monthly bill cited by Ali. They add that federal programs and state universal service subsidies already target low-income consumers who may have difficulty paying their bills, alongside provider-specific low-income offerings.
Competition from new technologies is another key factor, they argue. The scholars point to satellite constellations such as Starlink, which are aggressively targeting customers in remote areas where fiber is expensive to deploy. They say price competition from satellites recently helped the National Telecommunications and Information Administration lower the overall cost of its BEAD program by $21 billion, with much of those savings redirected to extend broadband to remaining unserved locations.
May and Kennedy conclude that the public debate on price regulation has largely been settled in favor of less regulation and more competition, citing parallels in freight, airlines, electricity transmission and the old Ma Bell system. “This is certainly not the time to renew efforts at rate regulation as the broadband marketplace becomes ever more competitive,” they write.
The dispute has flared up again in recent weeks, with Free State publishing a new critique just days after Ali’s latest essay calling for more aggressive broadband affordability measures.
In a recent Sept. 22 paper, FSF Senior Fellow Andrew Long asserted Penn State’s Ali of trying to revive rejected regulatory ideas, including rate regulation, taxpayer-funded overbuilding and opposition to technology neutrality, and said robust, multimodal competition and falling prices make those approaches unnecessary and potentially harmful.
Long argued that Ali’s “$10 fiber” vision ignores evidence from the FCC’s 2026 Section 706 Report, writing that “policymakers evaluating the state of competition must stick with Team Evidence,” and adding, “It once may have been heretical to suggest that satellite broadband was an effective competitor. It is now heretical to insist that it is not.”
The dispute reflects a larger policy divide over affordability and deployment. Ali and other advocates have argued that policymakers should consider stronger interventions to make broadband more affordable, while the Free State Foundation maintains that competition among multiple technologies - rather than price regulation or fiber-first mandates - offers the more effective route to lower prices, continued private investment and wider availability.
