Trade Group: State Rate Caps Threaten BEAD Program
So far, only New York has a law in effect.
WASHINGTON, July 30, 2025 – States with rate regulation laws are a threat to a major federal broadband subsidy program, according to an industry trade group.
On Tuesday, ACA Connects sent a letter to recently appointed National Telecommunications and Information Administration Administrator Arielle Roth. In that letter, ACA Connects encouraged Roth to condition access to funds from the $42.45 billion Broadband, Equity, Access and Deployment Program on states agreeing not to enforce rate regulation for BEAD projects.
“We urge you to expressly condition access to BEAD funds on an Eligible Entity agreeing not to apply or enforce rate regulation in the context of BEAD deployment projects and to make clear that no waivers of this policy are forthcoming,” Grant Spellmeyer, President and CEO of ACA Connects, wrote. “Our proposed guidance will have the most immediate impact in the State of New York, where broadband providers are subject to a generally applicable law regulating broadband rates.”
ACA Connects, which represents over 500 small and medium sized telecommunications providers, has long fought state-imposed laws regulating broadband rates. In May, it released the results of a study conducted by Cartesian that showed that rate regulation would lead to a steep drop in investment by providers. Though New York’s law capping broadband rates is the most notable, other states, including California, Massachusetts, Vermont, Connecticut, Maryland, and Minnesota have introduced legislation that would cap rates providers could charge to low-income subscribers. California’s bill died a few weeks ago.
A BEAD Restructuring Notice issued by the NTIA on June 6 forbids states from setting a rate for low-cost plans offered by providers. During the Biden era, the NTIA was accused of pressuring states to cap the price of low-income plans by some Capitol Hill Republicans.
“By holding the line against rate regulation, NTIA will encourage broader participation and more competitive bids,” Spellmeyer wrote. “This is good news for unserved and underserved communities – and for all American taxpayers.”
Member discussion