Virginia and NTIA at Odds on BEAD Low-Cost Option

WASHINGTON, December 15, 2023 – Virginia is at odds with the National Telecommunications and Information Administration over affordability requirements for the agency’s broadband expansion program.

The Infrastructure Act’s Broadband Equity, Access and Deployment program allocated $42.5 billion among all 56 states and territories to get high-speed

internet to areas without adequate infrastructure. States are in the process of refining and submitting their initial proposals for administering the program, which are due December 27.

A provision of the program requires that providers set up an affordable plan for low-income households on BEAD-funded infrastructure. States are directed by the NTIA to either explicitly set out in their proposals what that low-cost price point will be, or to share with the agency a formula that will be used to determine that price.

The draft volume two of Virginia’s initial proposal, which outlines the state’s plans for choosing grant winners under the program, does neither. The state is proposing to require that grant applicants outline and justify their own low-cost options as part of the application process. 

After the state submitted its volume two to the NTIA, the agency wrote in a letter to the state that it “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.”

Virginia is concerned that would amount to “rate regulation,” which the Infrastructure Act bars the NTIA from doing as part of BEAD, and is asking the agency to accept its proposal without changes to the low-cost provision.

“We respectfully request that NTIA accept Virginia’s proposed definition of its low-cost option as submitted,” the state’s newly submitted proposal reads.

The issue came up during NTIA Administrator Alan Davidson’s testimony at a House oversight hearing on December 5.

Republicans on the House Energy and Commerce Committee repeatedly brought up the low-cost requirements as potentially violating the Infrastructure Act, which Davidson pushed back on.

“We are not setting a price at the NTIA. We are not setting a national price for broadband. We are not setting rates,” he said. “It seems quite reasonable to say that in return for receiving these federal funds… providers need to have a low-cost option.”