BEAD’s Middle Class Affordability Requirement

One of the most perplexing requirements for the Broadband Equity, Access, and Deployment (BEAD) grant program is that state broadband plans must include a middle-class affordability plan to make sure that all consumers have access to affordable broadband. I don’t know anybody who fully understands what this means. The National Telecommunications and Information Administration's Notice of Funding Opportunity for the BEAD grant program makes a variety of suggestions for how State Broadband Offices might achieve this, ranging from consumer subsidies to assigning a high weight to affordability criteria when selecting sub-grantees. The idea of having to push down the rates to win the grants is scary for most internet service providers because most of the customers who aren’t low-income are probably considered to be middle-class. That is the category of broadband that drives the majority of the revenue in a broadband business plan. If providers are pressured to have low rates for everybody, it’s that much harder to build a business plan that doesn’t lose money. I’m sure it’s really tempting for a State Broadband Office to mandate affordable rates; it’s a chance through the grant process to try to establish public policy. But I find it really troubling that policy-driven folks who have never operated an internet service provider try to micromanage how one should operate.