States will lose out on their share of a $42 billion broadband fund if they attempt to dictate rates that internet services providers (ISPs) charge low-income customers, according to a new FAQ from the Trump administration seen by Ars Technica. That means ISPs — which are subsidized by the government in order to provide low-cost plans — will be able to set such rates under the BEAD (Broadband Equity, Access and Deployment) program.
The new language appeared in a BEAD Restructuring Policy Notice (RPN) from the National Telecommunications and Information Administration (NTIA) in June. “Per the RPN, states may not apply state laws to reimpose LSCO (low-cost service option) requirements removed by the RPN… violation would result in rejection of the final proposal [for states to receive funds].” It added that the the NTIA would only approve plans with low-cost rates set by ISPs.
The new language would hand ISPs a major win if it holds up. New York state, for one, requires ISPs with more than 20,000 customers to offer $15 broadband plans with minimum 25Mbps download speeds, or $20 plans with 200Mbps speeds, to low-income customers. That law, the Affordable Broadband Act, has held up despite attempts by providers to strike it down in court.
Other states are reconsidering similar laws now. California recently withdrew a bill requiring $15 broadband plans after the NTIA said it could lose out on BEAD funds worth up to $1.86 billion. That decision was excoriated by consumer groups who pointed out that the Supreme Court itself declined to overturn New York’s law.
As he’s done many times now, Trump is using federal funds as a cudgel to keep states in line — despite the fact that states’ rights are usually supported by US courts. New York assemblymember Amy Paulin, who spearheaded the state’s $15 broadband law, said that she believes the NTIA rule only applies to the other 49 states that don’t have price mandates. “It’s our understanding that any [ISP] BEAD awardee would have to comply with the Affordable Broadband Act regardless of federal subsidy,” she told Ars Technica.
