Trump’s NTIA to States: Dictate Broadband Prices, Forfeit Billions

The Trump administration is sending a clear message to states: try to set your own rules for broadband prices, and you could lose out on a massive $42 billion federal fund. A new policy from the National Telecommunications and Information Administration (NTIA) effectively states that if states attempt to dictate rates that Internet Service Providers (ISPs) charge low-income customers, they risk forfeiture of their share of the Broadband Equity, Access and Deployment (BEAD) program funds. This means ISPs, even those receiving government subsidies to offer affordable plans, will have the final say on pricing.

This stern warning comes from a June “Restructuring Policy Notice” (RPN) issued by the NTIA. The notice explicitly states that “states may not apply state laws to reimpose LSCO (low-cost service option) requirements removed by the RPN…” and warns that any violation “would result in rejection of the final proposal.” In essence, the NTIA will only sign off on state broadband plans where ISPs, not state lawmakers, determine the pricing for low-cost options.

If this policy stands, it marks a significant victory for ISPs. Consider New York, which has its own “Affordable Broadband Act.” This law mandates that ISPs with over 20,000 customers must offer low-income residents plans for $15 (25Mbps) or $20 (200Mbps). Notably, this New York law has survived legal challenges from providers.

The NTIA’s stance is already influencing other states. California, for instance, recently pulled a proposed bill that would have required $15 broadband plans after being warned it could forfeit up to $1.86 billion in BEAD funds. This move drew sharp criticism from consumer advocates, who highlighted that even the Supreme Court chose not to overturn New York’s similar law.

This strategy isn’t new for the Trump administration, which has often used federal funding as leverage to influence state policies, even when those policies touch upon states’ rights, a concept typically upheld by US courts. New York Assemblymember Amy Paulin, a key proponent of her state’s $15 broadband law, has expressed a different interpretation. She believes the NTIA’s rule applies primarily to states without existing price mandates, asserting that any ISP receiving BEAD funds in New York would still be obligated to comply with the Affordable Broadband Act, federal subsidy notwithstanding.