Insights from State Affordability Plans

 

"Access to affordable, reliable, high-speed broadband is essential to full participation in modern life in the United States."

 

—Infrastructure Investment and Jobs Act

 

 

The Broadband Equity, Access, and Deployment (BEAD) Program—part of the Infrastructure Investment and Jobs Act—prioritizes projects bringing broadband to underserved areas. Federal funds will cover about 75% of deployment costs.¹ With little market competition, concerns arise about the affordability of these taxpayer-funded networks.

 

States, Puerto Rico, DC, and U.S. territories (collectively "Eligible Entities") are securing approval for their "Initial Proposals," necessary to receive BEAD funding. These proposals outline competitive processes to select subgrantees for broadband projects and ensure every resident has access to reliable, affordable high-speed broadband.

 

Congress mandates BEAD subgrantees to offer at least one low-cost broadband service option. Eligible Entities must work with the National Telecommunications and Information Administration (NTIA) and subgrantees to define "low-cost broadband service option."

 

NTIA's Model Low-Cost Broadband Service Option

 

NTIA's proposed criteria for low-cost broadband options include:

 

1. 1. Cost of $30/month or less, or $75/month or less for Tribal Lands, inclusive of all taxes, with no additional fees;

 

1. 1. ACP subsidy applicable to the service price;

 

1. 1. Download speeds of at least 100 Mbps and upload speeds of 20 Mbps, or fastest possible if less;

 

1. 1. Latency of no more than 100 milliseconds;

 

1. 1. No data caps, surcharges, or throttling, and similar acceptable use policies as other plans;

 

1. 1. Free upgrades if the provider offers a new low-cost plan with higher speeds.

 

 

The Benton Institute for Broadband & Society has reviewed states' low-income plans. Here's what we've found.

 

States Agree that the Cost of Broadband is a Barrier to Adoption

 

Most states recognize the cost of broadband as a significant adoption barrier. Examples include:

 

District of Columbia—Eliminating the digital divide requires a focus on both access and affordability.

 

Hawai'i—Affordability is crucial among income-constrained groups.

 

Kentucky—Broadband subscription costs hinder adoption.

 

Louisiana—64% of unconnected residents cite cost as the reason.

 

Maine—Affordability is key for all Mainers.

 

Massachusetts—High costs are the main barrier.

 

Montana—Cost remains a major hurdle.

 

Nevada—Affordable and desirable services are necessary for universal access.

 

Utah—Affordability is a major factor in broadband adoption.

 

Most States Adopt $30 Per Month Target

 

Benton’s review shows most states aim for $30/month 100 Mbps download and 20 Mbps service plans but allow exceptions. For example:

 

• • Urban BEAD areas in Utah will charge $30/month, rural areas $60/month.

 

• • Arizona, Colorado, Delaware, Hawai'i, Kentucky, Louisiana, and Maine allow plans up to $70/month.

 

• • Pennsylvania, Nevada, West Virginia, and Indiana up to $50/month. Montana targets $70/month, re-evaluated annually.

 

 

Eight states targeting $30/month allow higher charges if justified. NTIA and state offices recognize that small, rural networks may need higher fees due to fewer customers to offset capital costs.

 

In Louisiana and Kentucky, areas with high per-subscriber costs could make $30/month unsustainable due to low adoption.

 

In Delaware, providers must justify higher rates based on actual costs.

 

In Colorado and Arizona, subgrantees can charge up to $50/month if they meet specific waiver criteria.

 

In Hawai'i, higher rates must be justified by operational costs and approved by the state.

 

An ACP-Sized Hole in Low-Cost Plans

 

BEAD guidelines required subgrantees to participate in the Affordable Connectivity Program (ACP). However, ACP ended in 2024. The lack of funding means low-income households must now consider costs before subscribing. States planned to use ACP eligibility to determine low-cost options, so new verification methods are needed. This could lead to over 50 separate procedures for eligibility checks.

 

BEAD-supported ISPs must conduct public awareness campaigns highlighting the benefits of broadband and low-cost plans. Campaigns should use various media and provide information in multiple languages when needed.

 

BEAD and Non-BEAD Networks

 

NTIA and state offices can’t regulate non-BEAD networks, but some states encourage low-cost plans across all networks.

 

Washington State strongly encourages low-cost options for all customers.

 

West Virginia encourages BEAD applicants to offer low-cost plans on non-BEAD networks.

 

Maine expects ISPs to provide affordable options to all customers.

 

The Kentucky Office of Broadband Development requires ISPs to offer low-cost plans statewide.

 

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Notes

 

1. 1. In high-cost areas, the 25% match may be waived. Projects with higher matches get priority.

 

1. 1. States require monthly charges to be inclusive of all taxes and fees, with no additional costs. Montana exempts government-imposed taxes and fees.

 

 

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