BEAD Pressure on Broadband Rates

State Broadband Offices and the BEAD grant process have designed grant rules that put pressure on internet service providers to provide inexpensive rural broadband. But in doing so, I’m not sure that they understand the high prices that rural folks are paying for broadband today. In rural areas I've looked at, most households are paying over $100 a month for broadband. There are state BEAD rules that are trying to force rates down to rates between $50 and $75 per month for gigabit speeds. I find several faults with these rate-setting efforts:

• The rates the Broadband Offices are seeking are typically far cheaper than what the large cable companies charge the companies that have the most customers in almost every state. It’s hard to think of a reason why grant offices want rural rates to be lower than urban rates, particularly when operating costs are higher in rural areas.
• The low rates don’t acknowledge that rural residents are already paying a lot more for inferior broadband. Do we really need to cut what folks are paying in half if they are going to upgrade from crappy broadband?
• The high rates are counterproductive. I talked to an electric cooperative this week that has zero interest in BEAD grants due entirely to the insistence on low rates. They understand the rates necessary to win BEAD would create a losing business plan.
• Probably most important is that the IIJA legislation strictly forbids NTIA and the States from using the grants for setting rates—and yet States are openly doing it anyway. Why isn’t the NTIA rejecting these rate plans?