The overarching goal of the Broadband Equity, Access and Deployment (BEAD) Program, established by Congress in the Infrastructure Investment and Jobs Act, is to deploy broadband networks that reach every American and provide access to reliable, affordable, high-speed internet. Congress decided to allocate BEAD funds to states and territories since they are best situated to determine the needs of their communities, but it did not change any existing federal authority to oversee broadband or pricing.  

The National Telecommunications and Information Administration (NTIA) was given administrative oversight and programmatic support responsibilities to ensure the funds would be spent consistent with Congressional intent, including the review and approval of proposals after significant consultation between the state or territory and NTIA. These are critical procedures for NTIA to follow in determining whether low-cost plans are in fact affordable for the areas and markets where they are proposed. What is affordable in one community may not be considered affordable in another, so the Infrastructure Investment and Jobs Act gives NTIA the responsibility of reviewing and approving different approaches on a state-by-state basis. 

Service providers using BEAD-supported infrastructure funds must provide a low-cost option to eligible subscribers; all states must have plans to address middle-class affordability; and BEAD further prioritizes proposals that improve affordability to ensure that networks built using taxpayer dollars are accessible to all Americans.

As a reminder, BEAD is only supporting the deployment of broadband infrastructure to locations that do not currently have access to 100/20 Mbps service. BEAD, in essence, will use taxpayer money to create local monopolies for an essential service. Absent competition, there will be no market pressure to ensure that public funding is not used to create networks that charge unfair rates for services that are essential to full participation in modern life in the United States.

In this and a forthcoming series of articles, the Benton Institute for Broadband & Society is looking at states' plans to ensure affordable services are available on BEAD-supported networks. We begin with Louisiana. The state received a $1.355 billion allocation from the BEAD Program, the eighth-largest in the nation and the 10th-largest per capita.

Louisiana's Affordable Access Divide

Roughly one of every three residents of Louisiana does not have access to high-speed, affordable, and reliable internet. And some households in the state endure internet costs of nearly $200 per month for marginal service, reaching speeds of less than 25/3 Mbps.

Household income directly impacts broadband access by influencing the amount available for households to purchase broadband. In the United States, 20.7 percent of the population lives below 150 percent of the federal poverty level. In contrast, 28.9 percent of Louisianians, or more than 1.3 million people, live below 150 percent of the poverty level. These stark statistics continue at the parish level where 59 of Louisiana’s 64 parishes have a higher percentage of residents living below 150 percent of the poverty level than the U.S. average.

About 85 percent of households in Louisiana have a broadband internet subscription, but fewer than 60 percent (59.5%) of households with incomes below $20,000 have access to a broadband subscription. (In comparison, over 90% of households that earn over $75,000 annually have access to a broadband subscription.) With fewer options for broadband access at their disposal, lower-income households often become smartphone-only internet users, usually without access to fixed broadband services. Estimates find that 27 percent of households with an annual income below $30,000 are smartphone-only internet users. 

Approximately two-thirds (64%) of unconnected Louisianians say that the cost of broadband internet is the reason they do not have it.

Louisiana's Low-Cost Option

In its approved BEAD plan, Louisiana says,

Louisiana adopts the Federal Communications Commission's finding that the most appropriate way to measure broadband affordability is against a goal of no more than two percent of low-income households' disposable income being paid for monthly service. The Louisiana Department of Revenue’s benchmark definition for “low-income” households is an annual household income level of $24,999—or $18,000 per year in disposable income using conservative estimates for effective tax rates.

Applying the FCC’s two percent standard yields an “affordable” monthly out-of-pocket price to these low-income households of $30. Accordingly, the objective of Louisiana’s low-cost service option is to achieve a "target effective rate" to qualifying households of $30 for the 100/20 performance tier on BEAD networks. 

However, the state is concerned that an inflexible low-cost service option has the potential to deter smaller broadband providers with higher service delivery costs in remote rural areas from participating in its BEAD bidding process. So applicants may request a modification to their low-cost service option from the $30 target effective rate if they can demonstrate the following:

• Per-subscriber costs in an area make $30/month financially unsustainable OR
• The impact on average revenue per user and total project revenue would be financially unsustainable given actual or projected subscriber adoption patterns. 
• The low-cost option does not exceed $65/month.

Louisiana also set these standards for the low-cost option. In the event that the Federal Communications Commission (FCC) revises the federal broadband benchmark speeds higher than the 100/20 standard required currently for BEAD, that new federal definition shall become the required performance standard. The low-cost option price may be adjusted once per year based on the Consumer Price Index, up to a maximum annual upward adjustment of three percent of the prior year level, as defined by the U.S. Bureau of Labor Statistics, beginning with an adjustment in 2025. Service is not subject to data caps, installation or other non-recurring charges, surcharges, or usage-based performance reductions, 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. In the event the service provider later offers a low-cost plan with higher speeds downstream and/or upstream, it will permit eligible subscribers that are subscribed to a low-cost broadband service option to upgrade to the new low-cost offering at no cost. Service providers must make households within its service areas aware of the availability of the low-cost plan via public awareness campaign activities.

Louisiana had tied affordability for low-income households to the FCC's Affordable Connectivity Program (ACP) which, until May 31, 2024, provided low-income households a $30 discount on their monthly broadband bills ($75/month for households residing on Tribal lands). The Louisiana low-cost option was to be available to all households that were eligible for the ACP. (If Congress decides to reestablish the ACP or create a successor program, Louisiana households that qualify for that program will be eligible for the state's low-cost service option.) Service providers were to allow end users to apply their ACP benefit to the service price and encourage customers to participate in the ACP.

Louisiana's Plan for Middle-Class Affordability

The affordability of broadband services from BEAD-funded networks for middle-class households is a priority for Louisiana's broadband office, known as ConnectLA. The state’s primary strategy for advancing middle-class affordability is to implement a highly competitive subgrant program that will afford a wide range of providers the opportunity to access Louisiana’s substantial BEAD funding allocation in order to deploy new high-quality networks that sustainably support reasonable pricing while also improving the competitive structure of the broadband market in the state. 

Louisiana finds that affordability is best advanced via the promotion of a competitive provider market made up of financially strong operators of high-quality broadband infrastructure. 

Affordability plays a central role in the scoring criteria ConnectLA will use to evaluate proposals to serve a location under the BEAD program. Scoring criteria will ensure that lower price commitments receive higher point totals, while leaving necessary flexibility for the business case decisions of prospective subgrantees to balance tradeoffs between BEAD funds requested, pricing commitments, and the quality of deployed networks. 

In ConnectLA's scoring rubric, there are three primary criteria that can award an application with up to 601 points—minimal outlay of BEAD funds (300 points), affordability (200 points), and fair labor practices (101 points).

Concerning affordability, ConnectLA does not require applicants to offer any particular rate for any particular tier of service, although existing Louisiana law does impose certain requirements on existing in-state providers. The law states, “[a] grant recipient that has offered broadband service to at least one thousand consumers for a period of at least five consecutive years shall offer broadband service at prices consistent with offers to consumers in other areas of the state.”

Instead, this federally mandated scoring category offers service provider applicants the opportunity to obtain additional points via voluntary affordability commitments of their choosing.

For fiber-to-the-home (FTTH) projects, the applicant’s commitment to provide the most affordable total price to the customer for 1 Gbps/1 Gbps service in the project area, a base score of 200 points in this category will be awarded as follows: 

• Compliance with Louisiana law on affordability will receive a score of 200 points.
• Alternate method of achieving a full baseline score. An applicant that has not offered broadband service to at least one thousand customers for a period of at least five consecutive years, or an applicant that does not otherwise offer 1 Gbps/1Gbps service, that includes a commitment to provide 1 Gbps/1Gbps service to all included locations in its application at a price no higher than the median price for all 1Gbps/1Gbps service offerings reported in the most recent year’s FCC Urban Rate Survey will receive a base score of 200 points. 

[For non-FTTH projects, the criteria are similar except the target speeds are set at 100 Mbps/20 Mbps.]

The FCC Urban Rate Survey will be used as follows: 

• For each year covered by an applicable BEAD commitment, the state will use the prior year’s FCC Urban Rate Survey broadband data for the state of Louisiana. For example, for performance of an applicant in 2026, the state would use Louisiana’s 2025 FCC Urban Rate Survey results.
• On the first business day of the year, the state will determine that year’s median price for 1Gbps/1Gbps service and for 100 Mbps/20 Mbps service that will be applicable to Louisiana’s BEAD program for the coming year. 
• If a given year's survey results do not contain any service tiers precisely at 1Gbps/1Gbps or 100 Mbps/20 Mbps, the closest comparable service tier result will be used. 

Conclusion

Although BEAD affordability plans will not impact all Louisianians, the plans will have an impact on a significant amount of households in many parishes. In 14 parishes, BEAD networks will provide access to 20 percent or more of the locations. In East Feliciana Parish, BEAD networks will connect over 40 percent of households. 

In the absence of ACP, Louisiana’s plan for services that low-income households can afford will have to be rethought. The state had set its sights on all broadband providers and all eligible households participating in the program. 

ConnectLA has until December 15, 2024 to submit a Final Proposal that details, among other things, the outcome of its selection process and how the state will ensure service to all unserved and underserved locations. So, in six months' time, we'll see just how BEAD providers will ensure that broadband service delivered over their networks will be affordable.

As ConnectLA scores BEAD applications and NTIA evaluates the state's final BEAD plan, it will be a significant missed opportunity if low-income and middle-class Louisianians cannot afford the cost of internet service offered over BEAD networks.   

Additional Coverage on Louisiana's Broadband Priorities

• Treasury Helps Broadband for Everyone in Louisiana
• A Look at Louisiana's Draft Digital Equity Plan
• Louisiana is Depending on the ACP to Eliminate the Digital Divide

See the latest Louisiana 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
• Illinois Committed to Changing the Broadband Affordability Picture
• Broadband Affordability is First and Foremost in Maine
• Universal Access to Affordable, Reliable Broadband in Kentucky
• Hawai'i is Working to Connect All to Affordable Broadband

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.

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Kevin Taglang
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Benton Institute
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