NTIA: States Can’t Enforce Rate Laws on BEAD Participants
Only New York has a law regulating broadband prices for low-income households.
WASHINGTON, August 11, 2025 – The Trump administration is reiterating that it will withhold its approval of federal broadband funding if states enforce rate cap laws against participants in the Broadband Equity, Access, and Deployment program.
The one state with such a law on the books is New York. Its Affordable Broadband Act requires that ISPs charge low-income households no more than $20 per month for 200 megabits per second plans, or less for lower speeds, with a carve-out for smaller ISPs.
The administration has already been successful in convincing California Assemblymember Tasha Boerner to end her efforts to get a similar law passed in her state. She said at the time she ended her efforts in July after the National Telecommunications and Information Administration told her participants, and potentially all applicants, would have to be exempted to avoid jeopardizing California’s funding.
NTIA did not immediately respond to a request for comment, nor did New York’s broadband office.
In its frequently asked questions document updated last week, the agency said states couldn’t impose their own price caps as part of the program, even if a state law required it.
“States may not apply state laws to reimpose [low-cost service option] requirements” removed by its updated policy notice, the agency wrote. “Violation would result in rejection of the Final Proposal,” a document outlining tentative grant winners that states need federal approval on before funding any projects.
In the document, NTIA said states were prohibited from regulating rates offered by a “subgrantee,” or an ISP that actually wins funding and deploys infrastrcture as part of the program.
The $42.45 billion BEAD program requires participating broadband providers to offer a low-cost service plan for low-income households served by BEAD infrastructure. The general requirement is baked into the Infrastructure Law that started the program.
The Biden administration had pushed states, which are each administering their own slices of BEAD money, to set a maximum price that would be considered affordable, much to the chagrin of Republicans and broadband providers.
The Trump administration in June axed the prices states had already set, citing another part of the law prohibiting NTIA from regulating rates as part of BEAD, and said ISPs could propose their own low-cost plans as part of their applications in a mandatory new round of bidding.
New York is the only state with a law regulating broadband prices, but several other states are considering the idea, including Massachusetts, Vermont, and Minnesota.
Before the law went into effect, New York said that its three largest ISPs – Charter, Altice, and Verizon – already offered low-income plans largely in line with the law’s requirements. The providers cover 95 percent of the state’s homes and businesses.
ACA Connects, which represents smaller cable operators, had asked NTIA to specify that BEAD participants were exempt from state affordability laws.
“ACA Connects thanks NTIA for holding the line against harmful rate regulations and following the law to ensure investment and competition is protected in the BEAD program,” Grant Spellmeyer, the group’s CEO, said in a statement.
The broadband industry fought New York’s law for years in court and were ultimately unsuccessful. It took effect in January.
Trade groups told federal judges at the time they worried about other states following New York’s lead, and testified in opposition to Boerner’s bill in California.
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