ISPs Seeking Government Handouts Try To Avoid Offering Low-Cost Broadband

Arthur T Knackerbracket has processed the following story:

Internet service providers are eager to get money from a $42.45 billion government fund, but are trying to convince the [US] administration to drop demands that Internet service providers offer broadband service for as little as $30 a month to people with low incomes.

The Broadband Equity, Access, and Deployment (BEAD) program was created by a US law that requires Internet providers receiving federal funds to offer at least one "low-cost broadband service option for eligible subscribers." The [US] administration says it is merely enforcing that legal requirement, but a July 23 letter sent by over 30 broadband industry trade groups claims that the administration is illegally regulating broadband prices.

The fund is administered by the National Telecommunications and Information Administration (NTIA). The NTIA is distributing money to states, which will then distribute it to ISPs. Before obtaining money from the NTIA, each state must get approval for a plan that includes a low-cost option. Nearly half of US states have already gotten approvals.

Although the law requires ISPs receiving grants to offer a low-cost plan, it also says the US may not "regulate the rates charged for broadband service." In the letter sent to US Secretary of Commerce Gina Raimondo, ISPs claim that the NTIA's demands for specific prices violate the ban on rate regulation:

We have also heard from stakeholders of specific instances in which certain State broadband offices have faced the prospect of political pressure unless they acceded to a $30 rate for the low-cost service option. This contravenes the clear language of the Infrastructure Act, which states that "[n]othing in this title may be construed to authorize [NTIA] to regulate the rates charged for broadband service."

Funds like BEAD are intended to help ISPs build broadband networks in areas where it would otherwise not be economically feasible. In other words, the government giving money to ISPs directly lets the telcos make a decent profit on network-construction projects in areas where subscriber fees alone wouldn't be enough.

ISPs receiving funds don't have to offer the low-cost broadband plan to everyone. They only have to offer it to eligible subscribers who meet low-income requirements, as detailed in the NTIA's Notice of Funding Opportunity.

Despite that, ISPs claim that prices for the low-cost option should be calculated based on "the economic realities of deploying and operating networks in the highest cost, hardest-to-reach areas." The letter said:

Read more of this story at SoylentNews.