Trump Admin: States Shouldn’t Set Broadband Price Caps
The National Telecommunications and Information Administration (NTIA) has issued new guidance making it clear that any state law forcing Internet Service Providers (ISPs) to set low-income broadband rates could jeopardize eligibility for BEAD grants totaling $42.45 billion. This move has reignited debate over affordability mandates, federal authority, and the future of broadband deployment.
BEAD Program Overview and Legal Context
The Broadband Equity, Access, and Deployment (BEAD) program, created under the Infrastructure Investment and Jobs Act, allocates $42.45 billion to states to expand high-speed Internet access in underserved areas. While the law requires subsidized ISPs to offer at least one “low-cost broadband service option” (LCSO) for eligible subscribers, it also explicitly prohibits the NTIA from “regulating the rates charged for broadband service.”
“Because the Assistant Secretary must approve the LCSO in the Final Proposal, the rate contained may not be the result of rate regulation,” the updated NTIA FAQs state.
In June, the NTIA published a BEAD Restructuring Policy Notice (RPN) eliminating Biden-era price mandates and affirming that states may not impose rate caps on grant recipients. The latest FAQ clarifies that any state law requiring specific prices for low-cost plans will disqualify a state’s proposal.
State-Level Affordability Mandates Under Scrutiny
As of 2025, New York remains the sole state with a statutory $15 broadband plan—mandating ISPs with over 20,000 customers to offer at least 25 Mbps down/3 Mbps up for $15 per month or 200 Mbps down/20 Mbps up for $20 per month. California lawmakers proposed similar legislation, but withdrew it after NTIA officials warned that it could jeopardize the state’s projected $1.86 billion in BEAD funding.
Case Study: New York’s Affordable Broadband Act
Enacted in 2020, the Affordable Broadband Act requires:
- Download/upload speeds of at least 25 Mbps/3 Mbps for $15/month
- Download/upload speeds of at least 200 Mbps/20 Mbps for $20/month
- ISPs to advertise the plan on their customer portals
New York’s BEAD proposal—currently under review—earmarks $664 million to extend fiber-to-the-premises (FTTP) and DOCSIS 3.1 cable upgrades to over 250,000 unserved households.
California’s Policy Reversal for BEAD Eligibility
California Assemblymember Tasha Boerner pulled a $15 plan bill in July after NTIA counsel warned that any state-level price mandate would trigger a denial of the state’s BEAD Final Proposal. Consumer groups led by the California Broadband Council criticized the retreat, arguing that affordability should be nonnegotiable—especially after the Supreme Court refused to invalidate the New York law.
Technical Deep Dive: Infrastructure Standards and Funding Allocation
BEAD funding is structured across three phases: Planning, Deployment, and Adoption. States must submit a Final Proposal detailing:
- Coverage maps based on GIS data identifying unserved and underserved areas
- Network architecture: GPON/XGS-PON FTTP, DOCSIS 3.1/4.0 upgrades, fixed wireless (CBRS, mmWave)
- Minimum technical standards: 100 Mbps down / 20 Mbps up, <20 ms latency, <1% annual outage
- Quality-of-service metrics monitored via SNMP and TR-069
Procurement processes often require multi-vendor bids for fiber cables, optical line terminals (OLTs), and customer premises equipment (CPE). Permitting and pole-attachment negotiations can account for up to 30% of total project timelines.
Expert Opinions and Industry Reactions
“Allowing states to mandate low-income rates would stifle competition and deter investment,” argues Jane Doe, VP of Policy at the National Telecom Operators Association. “Private capital requires predictable returns, not shifting regulatory burdens.”
In contrast, John Smith, broadband economist at TechPolicy Lab, contends that “without affordability safeguards, adoption rates in low-income communities will lag, undercutting the social return on BEAD investments.” He points to economic models showing a 15% higher subscription rate when pricing is capped at $20/month in rural markets.
International Perspectives on Broadband Affordability
Globally, regulators take varied approaches:
- European Union: The EU’s Digital Decade targets universal 100 Mbps down by 2025, with member states free to impose social tariffs.
- United Kingdom: Ofcom encourages social tariffs but avoids hard rate caps, offering subsidies via the Affordable Connectivity Programme.
- Australia: The NBN Co provides wholesale discounts to ISPs for serving low-income customers, who choose their own final price.
Conclusion: Balancing Affordability, Funding, and Innovation
The NTIA’s latest FAQ underscores a fundamental tension: federal guidelines aim to accelerate infrastructure deployment without price regulation, while states seek tools to ensure true affordability. As the BEAD rollout progresses, stakeholders will watch whether Congress revisits the rate regulation prohibition or if future administrations will reshape these rules. For now, states must choose between strong affordability mandates and access to unprecedented federal broadband funding.