Arizona's economic and cultural identity has long been anchored by the "5 C's": Copper, Cattle, Cotton, Citrus, and Climate. The next chapter of Arizona’s story adds a "6th C"—Connectivity. This new cornerstone represents the state's commitment to expand universal broadband internet access for all Arizonans. The Arizona Commerce Authority aims to bridge the digital divide and foster a more connected, inclusive, and prosperous Arizona.

Although 88.2 percent of Arizonans have an internet access subscription, broadband adoption varies widely across the state, ranging from a high of 90.2 percent of households in Maricopa County to a low of 42.9 percent of households in Apache County. There are different barriers to broadband adoption in urban and rural areas which may be confounded by income, poverty, education, employment, and community functioning. Many underserved communities—including low-income households and rural areas—face barriers in accessing the digital resources they need for education, employment, healthcare, and civic engagement.

Poverty occurs throughout the state to varying degrees and is often confounded with other factors including age, race, disabilities, language barriers, and being a member of ethnic minority group. Poverty is the lack of income and financial resources needed to purchase products (including cell phones and other devices), services (including mobile and broadband subscriptions), and participation in programs (including education and workforce training). Therefore, the needs of individuals and households experiencing poverty can be addressed through financial assistance programs to purchase, loan, discount, or fund products and services.  

The Arizona Commerce Authority recognizes that affordability plays a pivotal role in achieving digital equity in Arizona. Affordability is a central tenet of Arizona's broadband deployment and digital adoption goals and strategies, acknowledging that building new last-mile infrastructure is ineffective if Arizonans cannot afford monthly internet service costs.  

Arizona's Low-Cost Broadband Service Option for BEAD-Supported Networks

The Arizona Commerce Authority State Broadband Office will require Broadband, Equity, Access, and Deployment (BEAD) Program subgrantees to:

1. Participate in the Federal Communications Commission's Affordable Connectivity Program (if it is funded again) or any successor broadband subsidy programs (if they are established). Even though ACP is no longer available, the Arizona Commerce Authority is still requiring that the low-cost plan be made available to those previously eligible for ACP.
2. Offer at least one low-cost broadband service option on all BEAD-funded projects (subgrantees will be strongly encouraged to provide this option for the entirety of the subgrantee’s service territory). 
3. Provide a marketing plan that incorporates mechanisms to improve knowledge of the availability of the low-cost broadband service option and to raise awareness of subsidy programs such as ACP.

The Arizona Commerce Authority State Broadband Office has adopted the following definition for low-cost broadband service option including a Pricing Commitment, Service Characteristics, Subsidy Program Participation, and Ability to Upgrade.

Pricing Commitment

The price of the low-cost broadband service option pricing was designed to result in a net zero cost to ACP eligible subscribers after the subsidy is applied. 

• $30 per month or less, inclusive of all taxes, fees, and charges if the subscriber does not reside on Tribal Lands, with no additional non-recurring costs or fees to the consumer. 
• $75 per month or less, inclusive of all taxes, fees, and charges if the subscriber resides on Tribal Lands, with no additional non-recurring costs or fees to the consumer. 

Enforceable commitment to not raise the $30 per month for the 100/20 Mbps service for ten years which represents the federal interest in the project. 

• The pricing can be increased if there is an increase in the broadband service subsidy under ACP or successor programs. However, the price of the low-cost service plan must always result in a net zero cost to ACP subscribers after the subsidy is applied. For example, if the ACP subsidy or a successor or subsequent broadband subsidy program provides a benefit of $40, the low-cost broadband service plan can be increased to $40 a month since the net cost to the eligible customer will still be $0.

Service Characteristics

BEAD subgrantees must offer the low-cost option on services that meet the following minimums:

• Consistently and reliably provides download speeds of at least 100 Mbps, upload speeds of at least 20 Mbps, and typical latency measurements of no more than 100 milliseconds;
• Not subject to data caps, surcharges, or usage-based throttling;
• Subject only to the same acceptable use policies to which subscribers to all other broadband internet access service plans offered to home subscribers by the participating subgrantee must adhere; and
• Service installed within 10 calendar days of request for service once the network is operational. (The rationale for 10 calendar days requirement is to ensure that the 100/20 Mbps service is readily available upon demand by the customer.)  

Subsidy Program Participation

The Arizona Commerce Authority is requiring BEAD subgrantees to allow subscribers to apply the Affordable Connectivity Program (ACP) benefit and Lifeline subsidy to the service price—and to inform prospective subscribers of the existence of the ACP and Lifeline program benefits and how to enroll and apply for the subsidies. 

Of course, ACP ended earlier in 2024 when Congress failed to provide additional funding for the program. 

The FCC's Lifeline program is part of the larger Universal Service Fund, established by Congress in the Telecommunications Act of 1996. To participate in the Lifeline program, a service provider must be designated as an eligible telecommunications carrier (ETC) by its respective state regulatory commission. States have a wide latitude to require applicants to show how designating them as Lifeline providers will benefit the public.

Lifeline service providers may offer subscribers Lifeline-supported voice service (e.g., mobile or landline), broadband service, or a package of voice and broadband service. While applying for ETC status, a provider, at a minimum, must:

• Demonstrate that it is financially and technically capable of providing Lifeline service. 
• Submit information describing the terms, conditions, and rates for service plans offered to Lifeline subscribers.
• Detail how it will advertise the availability of Lifeline program support in a manner reasonably designed to reach eligible households within its service area.
• Be prepared to provide the Universal Service Administrative Company with full, correct information in response to program integrity requests.
• File annual recertification and non-usage reports.
• Meet minimum service standards set by the FCC.
• Confirm consumers' eligibility prior to enrolling them in the Lifeline program, and document their compliance with all FCC and state requirements.
• Provide a compliance plan showing how it will ensure that it meets the Lifeline eligibility rules.

As the FCC told Congress,

The Arizona Corporation Commission reviews individual applications on their merits. 

Ability to Upgrade 

In the event a BEAD-supported provider later offers a low-cost plan with higher speeds downstream and/or upstream, Arizona will require the provider to permit eligible subscribers that are subscribed to a low-cost broadband service option to upgrade to the new low-cost offering at no cost.

Cost Waivers

BEAD applicants in Arizona seeking to raise the low-cost amount from $30 per month must apply for a waiver from the State Broadband Office. Each waiver request will be individually evaluated, and the State Broadband Office is retaining the authority to decline any waiver that does not clearly demonstrate the necessity of increasing the service cost from $30.

The cost of the low-cost plan included in the waiver request should not exceed $50. The $50 per month cap was determined based on input provided by a number of Arizona-based broadband service providers and consideration that, although higher than the $30 low-cost plan, the cap is still within an affordable range for many consumers.

The criterion for approval is, but not limited to following: 

• Justification for the Waiver: Clearly articulate the specific reasons for requesting a waiver and explain the necessity or benefit of granting the waiver.
• Legal and Regulatory Compliance: Ensure that the request aligns with applicable laws, regulations and policies.
• Demonstrated Need: Provide evidence of a genuine need for the waiver, such as data, research, or assessments that support the request.
• Public Interest and Benefit: Describe the public interest or community benefit that will result from granting the waiver. Explain how the waiver aligns with broader policy goals or societal needs.
• Cost-Benefit Analysis: Conduct a cost-benefit analysis to demonstrate that the benefits of granting the waiver outweigh any potential drawbacks. 

The State Broadband Office believes that this increase will allow service providers that win approval to maintain service quality and reliability while also extending their reach to unserved and underserved areas. Additionally, the increase will support more substantial investments into broadband infrastructure which will ultimately result in improved speed, performance, and customer satisfaction. 

Arizona's Middle-Class Affordability Plans for BEAD Networks

The Arizona Commerce Authority State Broadband Office will require all BEAD subgrantees to provide a middle-class service option over the useful life of the network assets. The office defines a middle-class affordable service option that meets, at a minimum, the following criteria: 

• For end-to-end fiber networks (called priority projects), the service must consistently and reliably provide high speeds of at least 1 Gpbs symmetrical, with typical latency measurements of no more than 100 milliseconds.
• For networks using non-fiber technologies (called non-priority projects), the service must consistently and reliably provide high download speeds of at least 100 Mbps and upload speeds of at least 20 Mbps, with typical latency measurements of no more than 100 milliseconds.
• The service should not have data caps, surcharges, or usage-based throttling restrictions, and the same acceptable use policies applicable to other broadband internet access service plans offered to home subscribers must apply.
• If a provider later offers a new middle-class affordable option plan with higher speeds downstream and/or upstream, eligible subscribers that are subscribed to a middle-class service option can upgrade to the new middle-class affordable offering at no additional cost.
• Broadband consumer labels that outline the introductory rates, speeds, data allowances, and other critical broadband service information should be provided in an understandable format to allow consumers to comparison-shop for broadband services.
• Compliance with the Arizona Consumer Protection Act (which promotes truthful business practices and prevents deceptive and fraudulent advertising) and all other applicable state and federal laws is mandatory. 

BEAD subgrantees in Arizona must inform prospective customers of this option by making the plan information publicly available and easily accessible. While the State Broadband Office encourages the provision of the middle-class service option to all eligible prospective customers across the subgrantee's service territory, it is mandatory for this service option to be available at locations within the awarded project areas under the BEAD Program.

The average monthly internet bill in Arizona is about $76.23 inclusive of taxes, fees and charges. The State Broadband Office proposes the affordability pricing standard at approximately one percent of median household income ($73,450 in 2022) in the state for the priority projects and less than 1 percent of median household income for the non-priority projects

Affordability Scoring Criteria for BEAD Applications

The State Broadband Office will leverage its BEAD application evaluation scoring rubric to incentivize proposals that meet or exceed the affordability pricing standard for the middle-class affordable service option.   

The affordability category will determine the scores for the prospective BEAD subgrantee's commitment to provide the most affordable total price to a customer for 1 Gbps symmetrical service in the project area for five years after the completion of the project. For non-priority projects, commitment to provide the most affordable total price to customers for 100/20 Mbps service in the project area for five years after the project completion. The FCC 2023 urban benchmark rate for unlimited 1 Gbps symmetrical service is $142.59, and 80 percent of that amount is $114.07. And the benchmark rate for unlimited 100/20 Mbps service is $105.03—80 percent of that amount is $84.02. The scoring criteria will be a sliding scale of service cost ranges.

Additionally, applicants that provide a marketing plan as part of their application that incorporates mechanisms to improve knowledge of the availability of the low-cost broadband service option and to raise awareness of subsidy programs such as ACP will receive up to 10 points. 

The pricing commitments in proposals of subgrantees will be incorporated as binding commitments in the BEAD subgrantee agreement. The State Broadband Office will continue to monitor pricing offered by the subgrantees for compliance with the requirements outlined in this section. In the event a subgrantee is found non-compliant, the subgrantee will be subject to claw back provisions with prolonged noncompliance will lead to subgrantee default.  

Additional Coverage on Arizona Broadband Priorities

• Centering Communities in Arizona's Digital Equity Plan
• Robust, Resilient, Broadband Infrastructure for Arizona

See the latest Arizona broadband news

More in this Series

• Louisiana's Plan for Affordable Broadband
• Pennsylvania's Plan for Affordable Broadband
• Washington State's Plan for Affordable Broadband
• The Kansas Affordability Plan
• Affordable Broadband for Nevada
• Will BEAD Networks Deliver Affordable Broadband for All in West Virginia?
• Delaware Wants to be the First State to Achieve Universal Broadband—Affordability is a Key Component
• Eliminating the Digital Divide in the District of Columbia Requires a Focus on Affordability
• A Plan to Bridge the Digital Divide in Colorado
• Ensuring All Hoosiers Have Reliable and Affordable Broadband
• Increasing Broadband Availability, Accessibility, and Affordability for the Benefit of All Utahns
• The Connection Between Affordability and Internet Adoption in Oregon
• How Maryland is Working to Make Broadband More Affordable
• Arizona Aims to Make the "6th C" More Affordable

The Benton Institute for Broadband & Society is a non-profit organization dedicated to ensuring that all people in the U.S. have access to competitive, High-Performance Broadband regardless of where they live or who they are. We believe communication policy - rooted in the values of access, equity, and diversity - has the power to deliver new opportunities and strengthen communities.

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