The Biden administration’s program to expand access to broadband internet may run afoul of the law that created it, experts told the Daily Caller News Foundation.
The National Telecommunications and Information Administration (NTIA), part of the Department of Commerce, is responsible for allocating $42.5 billion in funds intended to bolster the United States’ broadband internet infrastructure through the Broadband Equity Access and Deployment Program (BEAD) program. The agency, in a move to expand high-speed internet access to low-income communities, has been attempting to force states to adopt price controls for broadband services provided through the new projects, a strategy experts say could be illegal.
The NTIA is approving grants to states that impose price controls on broadband networks constructed using BEAD funds and rejecting funding to states that decline to include specific price controls. For instance, the agency approved a Californian plan that caps internet prices, a move that House Republicans argued amounts to the NTIA illegally regulating internet rates.
A provision in the Infrastructure Investment and Jobs Act, which initially allocated the funds for the BEAD program, says that “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 title of the statute is “no regulation of rates permitted.”
In December, however, the NTIA rejected Virginia’s application for funding, stating that a “low-cost option must be established in the Initial Proposal as an exact price or formula.” Virginia’s initial proposal would have allowed broadband providers in the state to submit their own low-income pricing options.
Virginia, responding to the agency, expressed concern that it was “being asked by the funding agency, NTIA, to take an action that NTIA is expressly prohibited from taking.”
The Virginia Office of Broadband did not respond to the DCNF’s request for comment.
“If Virginia submits a plan that does not include specific price points for broadband, and NTIA rejects the plan and tells them they must regulate specific prices, then how is that not rate regulation?” Foundation for American Innovation Senior Fellow and lobbyist Evan Swarztrauber told the DCNF. “It strikes me as a clear violation of the law.”
The BEAD notice of funding opportunity (NOFO), the document outlining the guidelines for states applying for broadband grant funding under the program, notes that the infrastructure law requires “each subgrantee receiving BEAD funding to deploy network infrastructure offer at least one low-cost broadband service option.” The document goes on to define “low-cost” service options as those that cost less than $30 a month, after taxes, or less than $75 a month for users on tribal lands.
The infrastructure law’s requirement that states put forward a low-cost option, and the the law’s prohibition on rate regulation, are “at the very least in tension with one another, if not outright contradicting one another,” former commissioner of the Federal Communications Commission (FCC) and Hudson Institute senior fellow Harold Furchtgott-Roth told the DCNF.
Experts speaking to the DCNF believe the wording in the NOFO, and the NTIA’s subsequent denial of Virginia’s application for funding, run afoul of the law.
“The NOFO left open for states to decide whether they want rate regulation or not and then turns out it really wasn’t a suggestion, it was more of an order,” Joel Thayer, a D.C.-based tech and telecom lawyer, told the DCNF. Thayer went on to say that the NTIA was denying the grant applications of states that don’t include price regulations in their plans, like what happened with Virginia.
“There is clearly a concerted effort within the NCIA to essentially buck the statute and say ‘we are the ones deciding that rate regulation is going to be part of these fund allocations and we are going to force the hand of all these states to adopt them,'” Thayer continued.
Furchtgott-Roth agreed with the interpretation that the infrastructure law prevents the NTIA from regulating internet prices and said that the agency’s $30 price cap amounts to regulating prices.
David Ditch, a senior policy analyst at the Heritage Foundation, told the DCNF that the NTIA’s maneuvers are part of a broader strategy employed by the Biden administration to tie left-of-center agenda items to federal dollars.
“I believe this mandate absolutely violates what Congress passed,” Ditch said, in reference to the NTIA’s rejection of Virginia’s broadband proposal.
“It is unfortunately symptomatic of the administration’s approach of oftentimes using congressionally authorized funds for inserting a wide range of left-leaning mandates,” he continued.
The Biden administration has, for example, tied tens of billions of dollars’ worth of infrastructure funding to issues like racial equity and environmental justice, according to a recent Heritage Foundation report.
Some experts have characterized BEAD as an inefficient use of government funds, citing the existence of other forms of infrastructure that can deliver high-speed internet, like wireless and satellite connections.
“The exclusion of technology other than fiber really undermines the credibility of the program,” Furchtgott-Roth said
Satellite internet providers like Elon Musk’s Starlink provide high-speed internet to rural areas that don’t have broadband access.
The FCC recently denied Starlink federal subsidies, citing speed tests and a failed rocket launch, Reuters reported. The two Republican FCC commissioners dissented from the decision, arguing that it “certainly fits the Biden Administration’s pattern of regulatory harassment” by adding the FCC to “the growing list of administrative agencies that are taking action against Elon Musk’s businesses.”
