A U.S. senator has fired back at the federal agency in charge of doling out billions of taxpayer dollars in federal broadband funding for its attempts at price controls.

U.S. Sen. Eric Schmitt (R-Missouri) sent a letter to the National Telecommunications and Information Administration (NTIA) for its seeming efforts to regulate broadband rates through the Broadband Equity Access and Deployment (BEAD) program. That program will divvy up $42.5 billion in taxpayer money to all 50 states, the District of Columbia, and American territories in an effort to close the digital divide. 

As part of the Infrastructure Investment and Jobs Act that created BEAD, Congress explicitly barred NTIA from regulating broadband rates. While states are required in their proposal for BEAD funding to submit a low-cost service option, they were given flexibility to determine potential rates based on the needs of the state. 

In his letter, Schmitt points out that during its so-called “curing process,” the NTIA is telling states they must establish “an exact price of formula” for acceptable low-cost options to receive funding.

“In requiring this, your agency is now conditioning BEAD funding on a set price, effectively rate regulating service providers and willfully violating the law,” Schmitt told NTIA Administrator Alan Davidson in the letter.   

“If you and [Department of Commerce] Secretary [Gina] Raimondo continue to pursue this strategy of double talk that NTIA is simply giving preference to states that agree to a specific price and not mandating a specific rate, please know that I, along with fellow colleagues on the committee, plan to use the fullest extent of our oversight authority to hold you accountable,” Schmitt continued. 

NTIA has approved BEAD plans for only eight states and D.C., all of which proposed a fixed price low-cost option, Schmitt noted in a press release. His home state of Missouri is one of the 42 states still waiting on NTIA to act. The agency has battled heavily with Virginia, which has balked at NTIA efforts at price controls. 

NTIA still has not approved Volume II of Virginia’s BEAD plan because of the state’s stance. 

Federal Communications Commission (FCC) Commissioner Brendan Carr summed up the dismal state of NTIA’s administration of the BEAD program in recent X post: “In 2021, the Biden Administration got $42.45 billion from Congress to deploy high-speed Internet to millions of Americans. Years later, it has not connected even 1 person with those funds. In fact, it now says that no construction projects will even start until 2025 at earliest.”

The Taxpayers Protection Alliance (TPA) sent letters to states like Montana, pointing out that they were developing metrics for broadband rates afield from what Congress intended. TPA argued that the state’s goals for affordability were too broad and arbitrary, and that the plan was “so overly prescriptive that it threatens to reduce the number of providers that would participate in the state’s grant program.” In all, TPA sent letters to about 30 states urging them not to engage in setting specific rates.

Telecom leaders have stated that onerous rate regulations could curb their participation in the BEAD program.

Charter Communications Chief Financial Officer Jessica Fischer said recently at a J.P. Morgan conference in Boston that some state BEAD rules would not be conducive to her company’s investment, Broadband Breakfast reported.  

“And so there could be some limitation to the total amount we invest that’s related to our lack of willingness to bid in states where we won’t be able to get the returns because the rules aren’t conducive to it,” she said.

Fisher’s comments mimic those of Charter CEO Christopher Winfrey in 2023, who said that, “I want to reiterate and be very clear that where state BEAD rules are not conducive to private investment, we will not participate in those states.”

Less private provider participation would not be good for Americans’ pocketbooks as it would lead to the creation of more government-owned networks (GONs) funded by taxpayers. TPA has written extensively about the failure of GONs in such reports as “GON with the Wind: The Failed Promise of Government Owned Networks Across the Country.”

It is hopeful to see members of Congress balk at the Biden administration’s attempt to strongarm states into restrictive BEAD plans. If the NTIA is not reined in, efforts to extend broadband to every American will likely be harmed.

Johnny Kampis is director of telecom policy for the Taxpayers Protection Alliance