Some federal lawmakers are frustrated with the National Telecommunications and Information Administration’s (NTIA) strong-arming tactics regarding the approval of state Broadband Equity, Access and Deployment (BEAD) proposals.
Some members of the House Energy and Commerce Committee recently sent a letter to the NTIA requesting all communications between the agency and state broadband offices regarding BEAD proposals. The request comes after NTIA pressuring states to regulate rates for low-cost broadband plans. Many groups have argued for months that the NTIA’s actions go against congressional intent in the Infrastructure, Jobs and Investment Act that created BEAD.
In addition to not adhering to congressional intent, broadband price controls are problematic because they limit the pool of providers willing to provide service, which could result in worse outcomes for consumers and increased costs for taxpayers.
A passage of the Infrastructure, Jobs and Investment Act regarding BEAD states: “Nothing in this title may be construed to authorize the Assistant Secretary or the National Telecommunications and Information Administration to regulate the rates charged for broadband service.”
The letter to NTIA Director Alan Davidson states that anecdotal evidence shows that NTIA may be “in violation of the law” in its actions on state BEAD proposals.
“States have reported that the NTIA is directing them to set rates and conditioning approval of initial proposals on doing so. This undoubtedly constitutes rate regulation by the NTIA,” the letter states. “Indeed, one state publicly posted the NTIA’s feedback that the agency would not approve their initial proposal without ‘an exact price or formula’ for the state’s low-cost option. Without visibility into the approval process, Congress is unable to determine how widespread this practice is. When asked about this at oversight hearings, your responses have failed to provide clarity.”
Although every state and U.S. territory submitted initial BEAD proposals on awarding the funds by the 2023 deadline, the NTIA has approved only 16 proposals. The letter argues that NTIA’s review and approval process is too opaque for the committee to understand why the NTIA has OK’d so few of the proposals.
The approval process so far has shown a partisan bent. Digital Liberty pointed out that 12 of the approved states are Democratic-run. In contrast, four of the approved states are Republican-run. Red states tend to be free-market-oriented and are less likely to include rate regulation in their proposals.
Led by the R Street Institute, the Taxpayers Protection Alliance co-signed a letter to Commerce Secretary Gina Raimondo in October calling on her agency to stop NTIA’s attempts at rate regulation, noting that states like Virginia (which has battled the NTIA for nearly a year) sought the flexibility not to implement broadband price controls as the law intended.
That document fell on deaf ears, but this congressional letter will likely receive attention.
Congress allocated $42.5 million in taxpayer money to BEAD to close the digital divide, but the NTIA’s inaction on state proposals is slowing that process.
Davidson, the NTIA director, committed to more transparency in the BEAD funding process in a May 15 hearing. It is hoped he will follow through on that promise so that the American public can see why the NTIA is throwing a wrench in the works.
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