House Republicans Accuse NTIA of Violating Rate Regulation Rules of Infrastructure Act

WASHINGTON, December 19, 2023 – House Republicans are accusing the National Telecommunications and Information Administration of regulating broadband pricing as part of its $42.5 billion Broadband Equity, Access and Deployment program. 

Their concerns, outlined in a letter to NTIA head Alan Davidson Friday, center

on rules requiring states — the entities ultimately awarding grants under the program — to ensure providers set up affordable plans for low-income households to get connected on BEAD-funded infrastructure. States are afforded flexibility in how they do this, but the NTIA has expressed a preference for setting a specific price point or a formula that will be used to calculate the low-cost plan.

Republican lawmakers said in the letter that approving state BEAD plans with required pricing amounts to rate regulation by the NTIA, something the agency is forbidden from doing by the Infrastructure, Investment and Jobs Act, which spawned the BEAD program.

“As we have said before, NTIA’s approval of state plans that include rate regulation is NTIA regulating rates in violation of the IIJA,” the letter reads.

All 16 Republican members of the House Communications and Technology Subcommittee signed the letter, including Communications Subcommittee Chair Bob Latta, R-Ohio, and Commerce Committee Chair Cathy McMorris Rodgers, R-Washington. The two signed another letter on Friday to FCC Chairwoman Jessica Rosenworcel saying her claims about the effectiveness of the Affordable Connectivity Program, a monthly broadband subsidy for low-income households, were overstated.

The issue of alleged rate regulation came up during Davidson’s testimony to the subcommittee at an oversight hearing on December 5. Asked repeatedly if the NTIA would regulate rates to ensure affordability requirements are met, Davidson emphasized the agency would not be handing down price requirements.

“We are not setting a price at the NTIA. We are not setting a national price for broadband,” he said at the hearing.

Davidson did not forestall the agency approving state plans to mandate rates or set price caps, which was not enough for House Republicans.

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

The NTIA has only officially approved one proposal for selecting BEAD grant recipients so far: Louisiana’s. That document sets the state’s low-cost option at $30 – set to match the subsidy provided by the ACP – but gives applicants room to raise that up to $65 if necessary for the financial sustainability of a project.

Virginia’s plan requiring providers to submit their own low-cost plans as part of the application process drew some pushback from the agency. The NTIA asked the state to set up more concrete requirements around the low-cost provision, citing a need to know how consumers would be affected before approving the plan.

The state, citing the same concerns as Republican lawmakers, is asking NTIA to approve its plan as is.