You’re reading the Benton Institute for Broadband & Society’s Weekly Digest, a recap of the biggest (or most overlooked) broadband stories of the week. The digest is delivered via e-mail each Friday.

Round-Up for the Week of August 12-16, 2024

According to the American Community Survey, 94.1 percent of Maryland residents have a home internet subscription of some kind which—while outperforming the national rate by 3.8 percentage points—still indicates that a sizable number of Maryland households are disconnected from the internet at home. Among Maryland households that do not subscribe to internet service of any kind, 12 percent reported that the primary reason they do not subscribe is the inability to afford service.

Over ten percent of Marylandians rely solely on a cellular data plan. Reliance upon cellular data for home internet service is considered insufficient for obtaining the many benefits of broadband. Mobile-only individuals typically cite affordability as a reason for not having home internet connectivity.

In Maryland, low-income individuals are 18.2 percentage points less likely than higher-income individuals to have a home internet subscription—highlighting the connection between affordability and internet adoption. Though there are numerous barriers to internet adoption, affordability of service is a particularly relevant consideration in the state.

In addition to the considerable gap between low- and higher-income individuals in internet adoption, the reported frequency of inability (and unwillingness) to pay for home internet use suggests that the State has substantial needs for interventions to bring down the cost of home internet subscriptions and use.

The Broadband Equity, Access, and Deployment (BEAD) Program provides federal funding​ to expand high-speed internet access by funding planning, infrastructure deployment, and adoption programs. Maryland’s BEAD plan serves​ as the state's broadband plan, establishing commitments and strategies to support broadband projects over the next five years in alignment with the Office of Statewide Broadband’s objective to close the digital divide in Maryland. The Initial Proposal presents the state’s method of implementing the plan.​

Maryland's Emergency Broadband Benefit

The Federal Communications Commission’s Affordable Connectivity Program (ACP), which––when active––subsidized up to $30 per month (or $75 for Tribal applicants) for broadband for qualifying households and included a one-time subsidy toward buying a laptop or tablet, was one of the most prominent interventions to lower the cost of internet service in the U.S. In Maryland, only about 28 percent of eligible households were enrolled in the ACP—compared to the already relatively low national rate of 36 percent.

Utilizing $45 million in funding from the American Rescue Plan Act (ARPA), in 2021 the State of Maryland launched the Maryland Emergency Broadband Benefit (MEBB) Program—a program that added a $15 State subsidy to the ACP subsidy. As of July 2023, about 33 percent of ACP-eligible Maryland households were enrolled in the MEBB. Participation in MEBB may have been lower due to the $30 ACP subsidy covering the full cost of internet access service for some low-income households.

In July of 2023, Governor Wes Moore (D-MD) announced an initiative called Maryland ActNow. In partnership with EducationSuperHighway Maryland ActNow aims to spread awareness about and increase participation in the ACP and MEBB programs.

Since 2021, over 200,000 households have benefitted from the $15 MEBB subsidy. As of February 29, 2024, however, the program has closed due to a lack of additional funding to sustain continued claims from participating Internet Service Providers (ISPs).

Maryland residents can also apply for Lifeline—a federal program that subsidizes up to $9.25 of eligible consumers’ monthly phone or internet service bills. The Maryland Public Service Commission makes information about this federal program readily available on its website. In addition, Governor Moore announced two grant programs in October 2023 utilizing $69 million through the ARPA Capital Projects Fund to support affordable, high-speed internet access for unserved residents. While neither program is designed to provide a direct subsidy to residents for the cost of internet subscriptions, the Home Stretch for Public Housing program ($45 million) will provide grant funding for localities to address affordability, access, and adoption in public housing units, and the Home Stretch for Difficult to Serve Properties program will support delivering service to remote properties that are geographically challenging for ISPs to serve.

Maryland's Low-Cost BEAD Plan

The State of Maryland is committed to providing residents with the opportunity to receive low-cost broadband service, while simultaneously recognizing that ISPs have a variety of different plans and may be unable to alter their pricing structure on a large scale. Based on previous experiences, the Maryland Office of Statewide Broadband (OSB) believes it is highly unlikely that ISPs would implement different pricing structures for BEAD-funded areas only, while maintaining other pricing in areas that are not BEAD-funded.

OSB’s intention is to aid as many Maryland residents as possible while ensuring that the scale of the low-cost obligation—and its resulting impact on the business case for ISP proposals to build to unserved Maryland locations—is not overly burdensome to BEAD subgrantees. The eligibility requirement for the Lifeline program is approximately equal to household income at or below 130 percent of the federal poverty line, suggesting a precedent for that benchmark as well as the potential to utilize the Lifeline National Verifier as a useful, low-cost means of verifying eligibility that does not impose additional burden on either the consumer or the ISP.

OSB proposes to require all subgrantees to offer a service option that meets, at a minimum, the following criteria:

• Will be available to all households that meet the eligibility requirements of the federal ACP program, including households with income equal to or below 200 percent of the federal poverty line.
• Cost of $30 per month or less, inclusive of all government taxes and fees, with application of an annual inflation factor based on the Producer Price Index for the State of Maryland.
• Participates in the ACP or successor program, allows the end user to apply the ACP subsidy to the service price, and requires ISPs to ensure that prospective customers are aware of their participation in the ACP.
• Meets performance requirements as established by the BEAD program, with download speeds of at least 100 Mbps, upload speeds of at least 20 Mbps, and typical latency of no more than 50 milliseconds
• Is not subject to data caps, surcharges, or usage-based throttling, and is 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.
• Allows subscribers to upgrade at no cost in the event the provider later offers a low-cost plan with higher speeds (downstream or upstream)

Maryland's Middle-Class Affordability Plans for BEAD Networks

Based on the work of digital equity researchers and advocates over the past decades, an affordable broadband service can be defined as one whose cost does not exceed two percent of household income. Since 2016, the FCC has used the benchmark of two percent of a household’s disposable income to measure the affordability of voice and broadband service expenditures in its Universal Service Monitoring Report.

As noted by the National Academy of Public Administration, the United States Conference of Mayors, and the American Water Works Association, however, considering affordability as a simple percentage of income can disregard differential burdens placed on low-income households. In measuring affordability, OSB will work to monitor the impact of broadband costs on communities at the highest risk of disconnection.

Addressing middle-class affordability also requires a definition of "middle class." Multiple frameworks exist within established research to accommodate the complexity of the concept, which contains the overlap of factors including income, education, occupation, and geographic location.

Maryland classifies low-income households according to the federal poverty guidelines published by the U.S. Department of Health and Human Services, but does not have an official definition of middle class. Median household income can serve as a useful benchmark for the state in line with the approach to affordability discussed above: according to data from the U.S. Census Bureau, the median household income in Maryland was $91,431 in 2021.

OSB will encourage providers to offer price points that accommodate subscribers’ ability and desire to pay for reliable, high-speed service through a range of solutions, including but not limited to establishing, making publicly available to consumers, and monitoring benchmarks for affordability; providing subsidies for broadband service; encouraging providers to extend low-cost service options to all subscribers; weighting affordability criteria in the scoring of its BEAD grant program; and promoting structural competition through regulations.

To support increased adoption of broadband, the State must ensure residents have access to reliable service. To that end, OSB seeks to effectively address affordability for middle-class subscribers without restricting providers’ participation in BEAD—which could lead to higher-cost awards and fewer residents that are served Priority Broadband (i.e., fiber).

Accordingly, OSB plans to manage middle-class affordability within the context of the BEAD program by addressing the following areas of risk.

1. Small, local providers propose low requested BEAD support but set high subscription costs

OSB will encourage ISPs participating in the BEAD program to offer areas they serve with grant funding their best price for analogous products they offer in other areas, in alignment with the gigabit best-offered pricing requirement in the BEAD program rules. 

2. Providers shift drop and installation costs to the consumer to recover capital costs

Grant participation rules will make clear that drops and network equipment are eligible BEAD costs and should be built into grant proposals to avoid inflated subscriber prices. OSB expects this risk to be somewhat mitigated by expanding competition in rural areas from 5G home internet and LEO satellite options.

3. Providers refuse to provide service to expensive locations

OSB will monitor and ensure that awardees make good on their BEAD service commitments, including not assessing additional fees beyond standard installation fees.

4. Differential pricing between urban and new project areas

The gigabit best pricing policy mandated in the BEAD program scoring matrix sets requirements around geographic non-discrimination.

The State of Maryland is committed to establishing policies that would ultimately lead to more widespread affordability among middle-income residents. This holistic commitment to expanding the adoption of broadband throughout Maryland necessitates the accommodation and partnership of subgrantees. In doing so, the state increases the likelihood of ISP participation and, in effect, will provide middle-income Maryland residents a genuine opportunity to be fully engaged in the digital world.

Envisioning an Affordable Future

The State of Maryland envisions a future where every person, irrespective of their geographical location or background, enjoys complete access to high-speed internet connectivity and possesses the essential tools to unlock its transformative possibilities. Maryland's vision includes some critical elements of digital equity that the state is striving towards. First on this list is access to affordable, reliable internet connectivity at home. Access to affordable and reliable internet connectivity at home is a cornerstone of digital equity as it ensures that individuals, regardless of their socioeconomic background, can participate fully in the digital world. In an increasingly interconnected society, essential services, education, job opportunities, and civic engagement largely occur online. Lack of affordable internet access can occur in both rural and urban communities. Closing this divide will ensure that residents located in every part of Maryland have equal access to critical information and resources that drive personal and professional growth.

Quick Bits

• Sen Cruz requests information on BEAD Program

• Chairwoman Rosenworcel Calls on FCC to Inquire About Customer Service in Communications Industry

• ISPs worry that killing FCC net neutrality rules will come back to haunt them

• Large Canada Phone Firms Must Open Fiber-Optic Networks to Smaller Rivals 

Weekend Reads

• Ensuring Access to Quality Communications for Incarcerated People: Options for Advocates and State Legislators

ICYMI from Benton

• NTIA Tracks Historic Boost in Federal Broadband Investment

• Connecticut Working to Ensure Universal Broadband Availability, Affordability, and Accessibility

• The Connection Between Affordability and Internet Adoption in Oregon

• Increasing Broadband Availability, Accessibility, and Affordability for the Benefit of All Utahns

• Michigan Is on the Road to Closing the Digital Divide by 2030

Upcoming Events

Aug 19––The Policy Implications of New Broadband Competition (Technology Policy Institute)

Aug 20––Workforce Development Strategies by Minority Serving Institutions (NTIA)

Aug 21––FirstNet Public Combined Board and Board Committees Meeting (NTIA)

Aug 21––Digital Equity Competitive Application Webinar, Part 4: Plans (NTIA)

Aug 22––Digital Equity Competitive Application Webinar, Part 5: Consolidated Budget Form (NTIA)

Aug 23––Multistakeholder Forum for the National Spectrum Strategy Band Studies (Department of Commerce)

Aug 28––A Community Conversation About Digital Equity, Job Creation and Entrepreneurship in Michigan (NTIA)

Aug 29––Technological Advisory Council (FCC)

Aug 29––E-rate HotSpot Lending (SHLB Coalition)

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.

© Benton Institute for Broadband & Society 2024. Redistribution of this email publication - both internally and externally - is encouraged if it includes this copyright statement.

For subscribe/unsubscribe info, please email headlinesATbentonDOTorg

Kevin Taglang
Executive Editor, Communications-related Headlines
Benton Institute
for Broadband & Society
1041 Ridge Rd, Unit 214
Wilmette, IL 60091
847-220-4531
headlines AT benton DOT org

Share this edition:

Broadband Delivers Opportunities and Strengthens Communities