The Infrastructure Investment and Jobs Act (IIJA) included $42.45 billion for broadband funding across the country. Each state was guaranteed to receive at least $100 million. The money was made available through the National Technology and Information Administration’s (NTIA) Broadband Equity Access and Deployment (BEAD) program.
Citizens Against Government Waste (CAGW) sent comments on February 2, 2022, to the NTIA prior to the release of the agency’s guidance for the BEAD program. The comments noted that the agency “must take a vendor and technology neutral approach to issuing grant funding,” and should avoid supporting government owned networks, among other recommendations. But after these recommendations were not followed, CAGW has been critical of the guidance, noting that they encourage states to engage in rate setting by prioritizing funding for providers that meet prescribed rates for low and middle-income households at symmetrical 100/100 Mbps or higher speed thresholds. This leads to the use of a particular technology rather than allowing states and localities to determine the technology best suited to their local conditions. As states begin to receive funding and set up the process by which the money will be disbursed, CAGW is keeping track of how the states formulate and implement their proposals for BEAD funding, including by sending letters to several states outlining recommendations and objections, noting that guidance is not a statutory mandate.
EXECUTIVE SUMMARY
This list compiles each state’s response to the BEAD Notice of Funding Opportunity’s (NOFO) Requirement 20 on Middle-Class Affordability and Requirement 16 for a Low-Cost Broadband Service Option. This list also provides background information on the degree of participation in BEAD by municipal, tribal, and other government-owned networks (GONs) in each state.
CAGW has identified 13 states whose affordability strategies meet the NOFO requirements in a manner that should enhance private-sector participation and encourage the most rapid rollout of connectivity to unserved areas. A significant element of most of their proposals is to not require specific monthly rates for each of the speed tiers. Instead, the states propose to determine eligibility either by comparing providers’ applications to the “reasonable comparability benchmark” defined in the Federal Communications Commission (FCC)’s Urban Rate Survey, or by requiring providers to charge the same rates in areas of their state that qualify to receive BEAD subsidies as they charge in unsubsidized areas.
There are eight states – Kentucky, Louisiana, Minnesota, New Jersey, New Mexico, North Carolina, Texas, and Virginia – that will determine providers’ affordability by reference to the benchmark rate for any given service area determined by the FCC’s Urban Rate Survey.
There are five States – Alabama, Delaware, Maryland, New Hampshire, and Oregon – that require providers to charge no more in BEAD-subsidized locations than they do in unsubsidized areas of their state or any other state. (Alabama, however, uses this geographic price-parity approach only for scoring Middle-Class Affordability, while requiring a specific rate for the Low-Cost Service Option.)
There are 11 states – Connecticut, Florida, Georgia, Hawaii, Iowa, New York, Ohio, Rhode Island, South Carolina, South Dakota, and Vermont, along with American Samoa – that have adopted an affordability strategy that scores providers’ proposed pricing relative to other providers that apply for BEAD funding, rather than against any objective standard of affordability. Ohio takes the unique approach of scoring applicants against a statewide weighted average of all BEAD applicants’ proposed prices, which is tantamount to strict rate regulation.
The other 24 states* and four territories (including the District of Columbia) surveyed, all dictate specific prices providers must charge to score well in the competitive application process. This requirement will stifle further investment in broadband infrastructure and make it more difficult to spend the BEAD funding effectively and reduce the digital divide. Some of the states and territories award full points for affordability for meeting the stated reference price, while others award only partial points for meeting the reference price and full points for charging significantly less than this reference price. Illinois, Wisconsin, and Wyoming, use an application scoring function that will not award full credit to any provider because they would require the provider to charge $0 per month. Michigan applies different benchmark prices to different geographic regions of the state. Ohio will score applicants by reference to a statewide benchmark price, but rather than set that price in its initial proposal, the state will calculate it as a weighted average of prices proposed by providers.
While most states use a costly one gigabit-per-second “symmetrical” (1/1 Gbps) speed benchmark, for both download and upload speeds, for purposes of assessing affordability, a few states and one territory stand out for using more rapidly-achievable speed thresholds, including Alaska, Louisiana, and Guam, which use a 100/20 Mbps speed benchmark; Nevada, which uses a 100/100 Mbps benchmark; and New Jersey, which uses an 800/800 Mbps benchmark for fiber projects and 100/20 Mbps for non-fiber projects.
*The Middle-Class Affordability strategies in Alaska, North Dakota, and the U.S. Virgin Islands could not be fully ascertained for this report.
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STATES
Alabama
Public Comment Concluded December 14, 2023
Alabama will receive $1.4 billion in BEAD funding with an average cost to taxpayers per unserved location of $4,230. The Alabama Department of Economic and Community Affairs’ initial proposal describes, on pp. 35-36, 39, and 142-151, describes how providers may earn a total of 24 points out of 100, for meeting the Middle-Class Affordability and low cost service option requirements for both priority and non-priority projects (which the department scores separately). Providers will earn 20 points for meeting the Middle-Class Affordability Plan requirements and 4 points for providing a Low-Cost Broadband Service Option. Middle-class plans must “not exceed the cost of the same service in any other location in Alabama or surrounding states in which the applicant offers service. Full points will be awarded to applicants that make this commitment in clear and unambiguous terms, … This criteria [sic] will work in conjunction with the lower-cost residential service scoring criteria” which will award providers four points for committing for a period of five years to charge no more than $30 per month, with inflation adjustment, for low-income households. Alabama is the only state that requires a specific price for the low-cost option while also utilizing the geographic price-parity approach for middle-class plans.
Alabama Code § 11-50B raises a number of restrictions against GONs including requiring a public referendum and prohibiting cross-subsidizing the revenues from broadband, with energy or other utilities. Three municipalities operated publicly funded networks in the state as of 2021, the most recent year with data available.
Alaska
Public Comment Concluded December 20, 2023
Alaska will receive $1.02 billion in BEAD funding with an average cost to taxpayers per unserved location of $11,534, or $5,934 above the national median cost per location. The initial proposal submitted by the Alaska ’s Broadband Office within the state’s Department of Commerce, Community, and Economic Development, describes, on pp. 10-14 how providers may earn up to 10 percent of all available points for meeting the Middle-Class Affordability requirement to deliver 1/1 Gbps service for fiber-to-the-premises (FTTP) projects and 100/20 Mbps service for other projects, scored separately, as well as an additional 10 percent for providing a qualifying Low-Cost Plan. For purposes of affordability assessment, the office will only score providers based on their pricing of 100/20 Mbps service. This eliminates the inherent bias toward FTTP projects that most states impose by scoring affordability with respect to 1/1 Gbps service. The office also scores applications for High-Cost Areas of the state separately from those serving Non-High-Cost Areas, but the Affordability and Low-Cost Plan requirements provide the same point total in both areas. The initial proposal does not specify a benchmark monthly rate, nor does it describe any objective pricing reference.
According to Broadband Breakfast, “Alaska is looking to designate all locations falling outside its community map boundaries – charted areas of municipalities and unincorporated communities throughout the state – as ‘extremely high-cost.’ That means the state can, under BEAD rules, look to non-fiber technologies to get those locations broadband.”
Alaska law does not restrict GONs, and five municipalities and tribal governments operated publicly funded networks in the state as of 2021.
Arizona
Public Comment Concluded December 6, 2023
Arizona will receive $993.11 million in BEAD funding with an average cost to taxpayers per unserved location of $5,600. Arizona’s Commerce Authority apportions 18 percent of a provider’s application score to its performance with respect to the two affordability metrics for both middle-class and low-cost plans as described on pp. 40-41, 45-46, and 108-110 of its initial proposal. The metrics require providers to serve 1/1 Gbps symmetrical speeds for no more than $64.99 per month, for full credit, along with a low-cost service option of 100/20 Mbps for $44.99 per month, for full credit. Providers would receive zero points on the affordability criterion by exceeding $75 per month for 1/1 Gbps service or $55 per month for 100/20 Mbps service. Arizona scores providers’ middle class and low-cost proposals separately, but in both cases their respective affordability provisions make up 18 percent of total points awardable.
Arizona law does not restrict GONs, but the only governments to construct publicly owned networks as of 2021 were seven of the state’s 20 Native American tribal governments.
Arkansas
Public Comment Concluded December 14, 2023
Arkansas will receive $1.02 billion in BEAD funding with an average cost to taxpayers per unserved location of $4,750. The Arkansas State Broadband Office’s initial proposal, on pp. 37 and 107, describe how providers may earn up to 25 points “based on how high or low their
Commitments are relative to the below reference prices for five tiers of service:” These tiers are 1/1 Gbps for $85 per month, 500/300 Mbps for $70 per month, 400/200 Mbps for $60 per month, 300/100 Mbps for $50 per month, and 200/50 Mbps for $40 per month. “If an applicant plans to support a plan between two of the tiers, their price will be assessed against a linear interpolation of the download speed between the two nearest reference prices. For example, if an applicant plans to support a 750/500 Mbps plan, their price would be assessed against a reference price of $77.50 per month. Scores will be based on a linear scale, with applicants committing to plans that are, on average, 50% higher than the reference price receiving zero points and applicants committing to plans 50% lower than the reference price receiving 25 points. For example, an applicant that commits to plans exactly at the recommended reference price would receive 12.5 points, while an applicant who commits to plans priced at 120% of the reference price would receive 10 points.”
The outcome of this pricing means that with a reference price of $85 for 1/1 Gbps service, providers can earn the full 25 points by charging no more than half the reference price, or $42.50 per month. Providers would earn zero points for charging more than $127.50 per month for this service. However, if providers opt to apply for an affordability assessment based on a 200/50 Mbps plan rather than a 1/1 Gbps plan, then they would earn full points for charging no more than $20 per month and zero points for charging more than $60 per month. Regardless of what service tier providers choose for their Middle-Class Affordability assessment, they must also provide a 100/20 Mbps Low-Cost Service Option.
Arkansas law does not restrict GONs, and three municipalities operated publicly funded networks in the state as of 2021.
California
Public Comment Concluded November 27, 2023
California will receive $1.86 billion in BEAD funding with an average cost to taxpayers per unserved location of $6,073, or $473 above the national median cost per location. The California Public Utilities Commission’s (PUC) initial proposal, on pp. 31 and 189-199, describes how providers may earn up to 40 points out of 100 for providing 1/1 Gbps service to priority locations for no more than $50 per month and 40 out of 100 points for providing 100/20 Mbps service to non-priority locations for no more than $30 per month. In both cases, “For every additional $1 per month that the applicant proposes to price its … service, 1 point will be deducted from the 40-point maximum.” Thus, providers will earn zero points for charging more than $90 per month for 1/1 Gbps service or more than $70 per month for 100/20 Mbps service. California law does not restrict GONs, and 31 tribes and municipalities had already built publicly funded networks in the state by 2021.
Colorado
Public Comment Concluded November 27, 2023
Colorado will receive $826.52 million in BEAD funding with an average cost to taxpayers per unserved location of $5,604. In Colorado’s initial proposal, on pp. 42, 44, and 57, set out the requirements for providers to receive full credit under the Colorado Broadband Office’s affordability criteria. The broadband office, which is part of the governor’s Office of Information Technology, will apportion 200 out of 500 total points to the fulfillment of the following affordability requirements: Providers may charge no more than $50 per month for the low-cost 100/20 Mbps option, and may charge no more than $85 per month for a 1/1 Gbps plan to qualify for BEAD funding. To receive full credit for meeting the affordability benchmark, however, providers cannot exceed $35 per month for 1/1 Gbps symmetrical service. Stated another way, exceeding $85 per month earns providers 0 points out of 200 for affordability, while charging $35 per month earns providers full credit of 200 points. These affordability criteria are weighted to make up 40 percent of the total points a provider’s application may earn.
This $35 benchmark rate coupled with an $85 hard cap together represent the greatest barrier to BEAD participation raised by any state CAGW has reviewed. One might think policymakers in the Mile High State would want to encourage rapid and efficient broadband rollout, but these unrealistic conditions placed on BEAD participation show they have little interest in doing so.
Colorado law formerly required cities to hold a referendum to approve the creation of a government-owned broadband network until Governor Jared Polis (D) signed SB 183 into law on May 1, 2023, which eliminated that requirement.
Connecticut
Public Comment Concluded December 8, 2023
Connecticut will receive $144.18 million in BEAD funding with an average cost to taxpayers per unserved location of $12,330, the fifth highest of any state and $6,730 above the national median cost per location. The Connecticut Department of Energy and Environmental Protection’s initial proposal awards 15 out of 100 possible points to providers who fulfill the affordability criteria described on pp. 31, 34, and 127-28 for both 1/1 Gbps and 100/20 Mbps plans. To score affordability, the department will rank providers’ proposals from the lowest to the highest price for given service, within a given area, and grant full credit on the affordability criterion only to the provider proposing the lowest price. Therefore, only one provider may receive full credit for a given service in a given area. This method, though not strict rate regulation, fails to provide the predictive clarity that nurtures investment. State law does not constrain cities’ ability to divert taxpayer resources to build their own government-owned networks, and the state’s first GON is currently under construction in East Hartford.
Delaware
Public Comment Concluded November 13, 2023
Delaware will receive $107.7 million in BEAD funding with an average cost to taxpayers per unserved location of a $52,508, which is the largest allocation per unserved location of any state, and nearly 10 times greater than national $5,600 median cost per unserved location. The Department of Technology and Information (DTI) “contracted with the Biden School of Public Policy and Administration at the University of Delaware” to identify the list of community anchor institutions (CAIs) that qualify for special funding to achieve 1/1 Gbps speeds.
DTI’s BEAD funding proposal, on pp. 77-79, 88-90, describes how providers may earn up to 15 points out of 100 for meeting the geographic price-parity commitment for 1/1 Gbps plans and a relative price ranking score for 100/20 Mbps plans. The proposal reads, “Applications will be scored based on Applicants’ commitments to offer a symmetrical 1 Gbps service to BEAD-funded locations that will never exceed the cost of the same service in metropolitan areas of Delaware. Full points will be awarded to applications that make this commitment in clear and unambiguous terms.” For the lower speed tier, however, “Applicants should submit their pricing level for 100/20 MBPS service and will be scored on lower pricing levels relative to other Applicants.” While DTI does not impose a specific price for purposes of assessing providers’ Middle-Class Affordability, even for 100/20 Mbps non-priority, non-FTTP plans, it does require providers to deliver a 100/20 Mbps plan for no more than $30 per month to meet the Low Cost Broadband Service Option requirement derived from Requirement 16 of NTIA’s BEAD NOFO. Providers’ ability to meet this requirement, however, has no bearing on the points awarded for “affordability.”
DTI will also score providers on whether they provide a plan offering symmetrical 1/1 Gbps speeds for download and upload. Imposing this high-speed threshold inherently preferences expensive fiber-optic technology over more affordable alternative technologies that providers could use to quickly bridge the digital divide for the state’s remaining unserved households. Indeed, while most states implicitly preference FTTP to the exclusion of cable, wireless, satellite and other technologies, Delaware prohibits any non-fiber projects from receiving BEAD funding. DTI’s proposal states on page nine, “BEAD funds will likely be sufficient to fund fiber-to-the-premises to the vast majority of, if not all, unserved and underserved locations in Delaware. … Given … the State of Delaware’s absolute preference for fiber-to-the-premises as the optimal communications infrastructure, DTI intends to limit its initial round of its BEAD grant funding process to fiber.” If Delaware policymakers are serious about closing the digital divide, they should be open to keeping all options on the table.
Delaware law does not restrict GONs. There were, however, no GONs operating in Delaware as of 2021.
Florida
Public Comment Concluded December 22, 2023
Florida will receive $1.17 billion in BEAD funding with an average cost to taxpayers per unserved location of $4,286. The Florida Department of Commerce’s Office of Broadband’s initial proposal, on pp. 21-23 and 74-77, how providers may earn up to 60 points out of 400, or 15 percent of an applicant’s total available points for meeting the affordability criteria. Of those 60 points, 30 go to providers that meet the pricing requirements for 1/1 Gbps service, 15 points for providing “discounted rates for low income, small business, and community anchor institutions,” and another 15 points for participating in the FCC’s Affordable Connectivity Program. For the middle-class service option, “Maximum points will be awarded to the application with the lowest total monthly price for 1Gb symmetrical service, inclusive of all taxes, fees, and charges. For other applications, 1 point will be deducted for every $1 above the lowest price offering for that designated project area, to a maximum of a 30-point deduction.” Providers will therefore earn zero points for pricing service to a given location at $30 more than the lowest price charged by a competing provider. As in Connecticut, Georgia, New York, and South Dakota, this affordability policy avoids the disincentive of outright rate regulation but still makes it difficult for providers to plan a long-term investment strategy in the state.
Florida Statutes §350.81 levies some barriers against GONs, yet 21 municipalities operated publicly funded networks in the state as of 2021.
Georgia
Public Comment Concluded December 1, 2023
Georgia will receive $1.31 billion in BEAD funding with an average cost to taxpayers per unserved location of $4,139. The Georgia Technology Authority (GTA), in conjunction with the Governor’s Office of Planning and Budget, will award 15 out of 100 points to providers for fulfilling the affordability criteria described on pp. 37 and 41 of Georgia’s initial proposal, which score providers based on their proposed pricing for both 1/1 Gbps symmetrical and 100/20 Mbps plans. The GTA will award full points only to the provider that proposes the lowest-price plan for each speed tier in a given unserved or underserved area. Georgia does not restrict the building of GONS, leading to 31 such networks completed as of 2021.
Hawaii
Public Comment Concluded December 10, 2023
Hawaii will receive $149.48 million in BEAD funding with an average cost to taxpayers per unserved location of $12,808, the fourth-highest cost per location in the nation and $7,208 above the national median cost per location. The Connect Kakou initial proposal, on pp. 19-20, allots 15 out of 125 points to providers who deliver both low-cost 100/20 Mbps plans and 1/1 Gbps middle-class plans for less than any other provider. “The potential subgrantee proposing the least expensive rate will receive full points.” The proposal, however, makes an exception to the 1/1 Gbps speed threshold for areas where FTTP proves unrealistically costly. The “[s]coring will be based on the required speed level of 1Gbps down by 1Gbps up delivered on an end to end fiber connection. In the event that no provider can provide such a service to the locations offered, scoring will be based on a 100Mbps down by 20 Mbps up, delivered on any technology that can provide such a service to the end location.”
Competing providers who propose to charge more than the lowest price bid will earn points according to the following formula: Lowest-bidder’s price multiplied by 20, divided by the higher-bidder’s price. If the lowest-bidder proposes to charge $100 per month, for example, then a competing bid to charge $200 per month would earn 10 points. All providers will earn affordability points provided they charge no more than 20 times the lowest bid. Hawaii law does not restrict GONs, but none operated in the state as of 2021.
Idaho
Public Comment Concluded November 10, 2023
Idaho will receive $853.26 million in BEAD funding with an average cost to taxpayers per unserved location of $6,789, or $1,189 more than the $5,600 national median cost per location. The Link Up Idaho proposal, on pp. 22-24, 30-32, and 78-81, allows providers earn up to 15 points out of 100 for charging no more than $69.99 for 1/1 Gbps service or $29.99 for 100/20 Mbps service and zero points for exceeding $110 per month for 1/1 Gbps or $80 for 100/20 Mbps. State law does not prevent government-owned networks from using taxpayer resources to compete against investor-owned providers, nor does it prohibit the state’s broadband office from preferencing applications submitted by government-owned networks (GONs) or utility cooperatives. Local governments in Idaho had constructed 14 GONs by 2021, including 2 on tribal lands.
Indiana
Public Comment Concluded December 3, 2023
Indiana will receive $868.11 million in BEAD funding with an average cost to taxpayers per unserved location of $4,297. The Indiana Broadband Office will award up to 20 points, out of a total of 100, to providers who fulfill the affordability requirements described on pp. 19-20 of its initial proposal, which require providers to provide both a 100/20 Mbps low-cost plan and a 1/1 Gbps plan for no more than $100 per month. The proposal states, “For every 5 percent higher than a total cost of $100 a month, an applicant will lose 1 point. For example, if an applicant submits a project area with a total price for gigabit symmetrical service of $150, the applicant will receive a score of 10 for affordability.” Thus, providers charging $200 a month or more will receive a score of zero for affordability and providers charging $195 or less will receive a score of one. There are no restrictions against building GONs, and eight had been built in the state by 2021.
Illinois
Public Comment Concluded October 31, 2023
Illinois will receive $1.04 billion in BEAD funding with an average cost to taxpayers per unserved location of $4,340. In its September 2023 proposal, the Office of Broadband within the Illinois Department of Commerce copied NTIA guidance to the letter by setting a $30 reference price for 100/20 Mbps service. The proposal, on pp. 32, 35-37, 98-99, and 108-109, breaks down service plans into several additional speed tiers of 1/1 Gbps, 500/100 Mbps, and 100/100 Mbps, with price caps of $100, $80, and $50 respectively. Providers may earn up to 30 points for making a five-year commitment to meet the affordability criteria for each of the following speed tiers – 1/1 Gbps, 500/100 Mbps, 100/100 Mbps, and 100/20 Mbps. These four speed tiers are not optional paths by which to meet the state’s affordability test. Providers will receive an affordability score with respect to each speed tier. For each tier, providers will “be awarded points based on the difference between their price and the reference price.
The score for each speed tier will be calculated as follows: Any application that includes a five-year commitment to offer the listed speed or above for the monthly reference price, with no installation, equipment rental fees, or other charges to the end-user, shall receive a baseline score of 10. Any application that includes a five-year commitment to offer the listed speed or above for less than the monthly reference price will receive an upward adjustment to the baseline score of 10 as follows: Score = 10 + 10 * [(reference price – commitment price) / reference price], up to a maximum of 30 total points. In other words, additional points will be awarded based on the percentage of the commitment price below the reference price. Any application that includes a five-year commitment to offer the listed speed or above for more than the monthly reference price will receive a downward adjustment to the baseline score of 10 as follows: Score = 10 – 10 * [(commitment price – reference price) / reference price], down to a minimum of 0 points. In other words, points will be subtracted based on the percentage of the commitment price above the reference price. By this calculation, if the commitment price is 200% above the reference price, the application will receive no points for this speed tier.”
Based on this formula, providers will receive zero points for charging $200 or more for 1/1 Gbps service, $160 or more for 500/100 Mbps, $100 or more for 100/100 Mbps, and $60 or more for 100/20 Mbps service. On the other hand, only by charging zero percent of the reference price, or $0, can a provider earn full credit. Many states have made the task of attaining full credit on a BEAD application considerably difficult for broadband providers, but only two states, Wyoming, Wisconsin, and Illinois, make it literally impossible by requiring providers to deliver high-speed internet free of charge.
Illinois state law also lacks any substantive protections against GONs, and 16 had been built in the state by 2021.
Iowa
Public Comment Concluded December 15, 2023
Iowa will receive $415.33 million in BEAD funding with an average cost to taxpayers per unserved location of $4,973. The initial proposal submitted by the Division of Information Technology in the Iowa Department of Management describes, on pp. 88-91, 131-132, and 135, how providers may earn up to 25 out of 100 points for meeting the affordability criteria. “DOM-DOIT intends to determine a ‘cost per megabit to the consumer’ measure. The lower the measure, the more affordable the broadband service Facilitated as a result of the proposed Project. The price per megabit for service for all Applicants will be compared against each other to calculate the Affordability score for each individual Applicant.”
Although it will not affect their Affordability score, providers must also deliver a 100/20 Mbps Low-Cost Service Option for “$40 per month or less, inclusive of all taxes, fees, and charges with no additional non-recurring costs or fees to the consumer; This price will apply for the first three years after network deployment, and then may be adjusted annually based on the Consumer Price Index.”
Iowa Code § 388.10 requires “that all new public utilities must be approved by voter referendum of 51%. If the referendum fails, the municipality cannot hold another referendum vote on the same proposal or a similar proposal for at least four years. If a municipality wishes to use bonds to finance a public broadband network, the measure needs to obtain 60% approval in a referendum. Municipalities are also prevented from using general fund moneys to support a broadband network, and must complete a detailed annual audit, subject to open meeting requirements.” Despite these requirements, there were 26 municipalities operating publicly funded networks in the state as of 2021.
Kansas
Public Comment Concluded November 13, 2023
Kansas will receive $451.73 million in BEAD funding with an average cost to taxpayers per unserved location of $5,163. Kansas’s initial proposal, on pp. 20-22, describes how the state’s Office of Broadband Development will apportion 15 out of 100 points to providers’ funding proposals based on their conformity with affordability requirements. To receive full credit, providers may charge no more than $89.99 per month for 1 Gbps symmetrical service to “priority” recipients and no more than $60 per month for 100/20 Mbps service for non-priority locations. Zero points are earned for charging $120 or more for 1/1 Gbps or $90 or more for 100/20 Mbps. The proposal also states, “Applications that propose to construct end-to-end fiber-optic facilities … will be defined as a ‘Priority Broadband Project.’” Kansas has no statewide GON preemption statute and at least five tribal and municipal-owned networks operate in the state.
Kentucky
Public Comment Concluded December 3, 2023
Kentucky will receive $1.09 billion in BEAD funding with an average cost to taxpayers per unserved location of $4,189. Kentucky’s Office of Broadband Development, like its neighbor Virginia, has chosen to prioritize rapid, efficient broadband rollout to the unserved regions of the Bluegrass State. Kentucky’s initial proposal, on pp. 50-51, applies the FCC’s reasonable comparability benchmark, which is determined using the annual Urban Rate Survey, to define affordability for the purposes of scoring broadband providers’ funding applications to provide 1/1 Gbps service. Kentucky law does not restrict GONs and 17 operated in the state as of 2021.
Louisiana
Public Comment Concluded September 25, 2023
Louisiana will receive $1.36 billion in BEAD funding with an average cost to taxpayers per unserved location of more than $4,567. One of only two states that has refrained from prescribing a one-size-fits-all rate for either speed tier, the Louisiana Office of Broadband Development and Connectivity has opted instead to adopt rates determined by a “reasonable comparability benchmark” for residential rates established by the FCC’s Urban Rate Survey. Louisiana’s proposal, on pp. 32-35 and 111-115, requires a reasonable speed threshold of 100/20 Mbps for both income tiers, which providers, with the help of BEAD funding, can rapidly achieve throughout the state’s unserved areas.
Louisiana law limits the participation of GONs in the BEAD funded broadband rollout. The state’s preemption law levels the playing field between private and government-owned providers by explicitly prohibiting the state’s broadband office from preferencing GONs for contracts or charging them lower pole attachment fees than private providers pay. Louisiana law prohibits GONs from using eminent domain, subjects them to antitrust liability, and prohibits them from subsidizing broadband rates with taxpayer resources or subsidized loans from other government. The state also prohibits public utilities from cross subsidizing their broadband rates using energy revenues. These preemption rules force the state’s four GONs to face the same market constraints of profit and loss as private providers.
Maine
Public Comment Concluded December 9, 2023
Maine will receive $271.98 million in BEAD funding with an average cost to taxpayers per unserved location of $6,435, or $835 above the national median cost per location. The Maine Connectivity Authority proposes, on pp. 15 and 46-57, to award 30 total points, out of 100, to providers who offer symmetrical Gbps service for no more than $100 per month and symmetrical 100/100 Mbps service for no more than $49 per month, as well as 100/20 Mbps for up to $30 per month. Under the 30 points for all affordability provisions, providers get 15 points for meeting the $49 price point for 100 Mbps symmetrical service, six points for meeting the $30 price point for 100/20 Mbps, and three points for agreeing to abstain from charging any extra fees to cover construction costs for a period of 12 months, and three points for providing symmetrical 1/1 Gbps service for no more than $100 per month. Providers will earn zero points for exceeding $70 per month for 100/100 Mbps service. Maine law supports GONs with taxpayer funds through a state grant program created by 2022 LD 1894, signed into law by Governor Janet Mills (D) on April 15, 2022. There were six municipalities operating publicly funded networks in the state as of 2021.
Maryland
Public Comment Concluded December 2, 2023
Maryland will receive $267.74 million in BEAD funding with an average cost to taxpayers per unserved location of $6,028, or $428 above the national median cost per location. The Maryland Department of Housing and Community Development’s Connect Maryland initial proposal, on pp. 32-33, 35, and 114-120, describes how providers may earn up to 20 points out of 100 for meeting the affordability requirement for 1/1 Gbps service to priority locations and 100/20 Mbps to non-priority locations, scored separately. Of those 20 points, 15 accrue to a provider that meets the “price commitment” described below and five points go to a provider that demonstrates “plans to ensure the affordability of broadband products and services for low-income Maryland households.” The Connect Maryland proposal opts for the same affordability strategy pursued by Oregon and New Hampshire, in which “applications will be scored based on applicants’ commitments to offer … service to BEAD-funded locations that does not exceed the cost of the same service in any other location in Maryland or surrounding states in which the applicant offers service. … Applications that do not make a clear commitment will receive zero points.”
Maryland law does not restrict GONs, and 10 had been built across the state as of 2021, although only one of those, Westminster Fiber, had begun delivering service.
Massachusetts
Public Comment Concluded December 15, 2023
Massachusetts will receive $147.42 million in BEAD funding with an average cost to taxpayers per unserved location of $11,773, the nation’s sixth highest and $6,173 above the national median cost per location. The Massachusetts Broadband Institute’s initial proposal, on pp. 40 and 79-82, describes how providers will earn full credit for charging less than $80 per month for 1/1 Gbps service to priority locations and less than $50 for 100/20 Mbps for non-priority locations. “A sliding scale will be used to score applications that provide 1Gbps/1Gbps symmetrical services from $81 or more per month, … $100 per month, the maximum price point allowable for a Middle-Class Broadband Service Option for 1Gbps/1Gbps, will be the top of the sliding scale. Priority Broadband Project applicants who commit to a Middle-Class Broadband Service Option at the maximum allowable price of $100 per month will receive half of the available points for affordability.”
Similarly, for non-priority projects delivering 100/20 Mbps, providers will receive points along a sliding scale from the reference price of $51 to the “maximum allowable price” of $75.
Senate Commerce. Science, and Transportation Committee Ranking Member Ted Cruz’s (R-Texas) September 2023 report highlighted some of the nation’s most egregious cases of “unserved location” designations. The report stated, “NTIA ignores the reality that alternative technologies like fixed wireless and satellite may be better suited to different consumers and geographies. Take, for example, Tuckernuck Island, a small private island off the coast of Massachusetts … [that] has no wired service, but it does have access to satellite service with speeds that exceed the thresholds set by Congress for BEAD, according to the FCC’s map. However, because the Biden administration’s BEAD rules summarily exclude certain technologies—namely unlicensed fixed wireless and satellite—from being considered ‘reliable broadband service,’ the entire island is considered unserved for the purposes of BEAD …This summary exclusion is not only at odds with the IIJA but real-world cases where non-fiber technologies have served as reliable and innovative alternatives.” The whole island, occupied by only 35 homes and lacking any paved roads or public utilities, already receives 100/20 Mbps satellite and wireless service.
Massachusetts law does not restrict GONs, and 57 municipalities operated publicly funded networks in the state as of 2021.
Michigan
Public Comment Concluded December 1, 2023
Michigan will receive $1.559 billion in BEAD funding at a cost of more than $4,232 per unserved location. In Volume II of its initial proposal, on pp. 18-19 and 68-71, the Michigan High-Speed Internet Office grants 30 points out of 100 to providers who fulfill affordability requirements that limit monthly rates for 1/1 Gbps symmetrical service to less than $65 for recipients located in “economic prosperity region” 1 and less than $73 for recipients located in “economic prosperity region” 2.
No other state has adopted this geographic stratification scheme. Michigan’s Low-Cost Service Option requires providers to deliver 100/20 Mbps to low-income households that qualify for participation in ACP for $0 net to the consumer. This means the provider must charge no more than the combined monthly benefit the eligible household receives from ACP and any other state or federal broadband voucher or benefit program.
Volume I of Michigan’s proposal also deserves a special dishonorable mention for the overbroad definition of Community Anchor Institutions (CAIs), which qualify for support to achieve one Gbps symmetrical speeds. The NOFO guidance describes the types of institutions that should qualify as CAIs, including schools, hospitals, government buildings, senior centers, job training centers, etc. The proposal submitted by the Michigan High-Speed Internet Office (MIHI), however, expands eligibility well beyond the letter or intent of BEAD guidance by permitting 118 entities categorized as stadiums, zoos, aquariums, wildlife centers, and convention centers, including many privately owned, for-profit businesses, to qualify as CAIs. The MIHI states that it included these entities merely because the Michigan State Police lists them as part of its Critical Incident Management System. The list originally included 75 stadiums and sporting facilities, 33 convention centers, and 10 zoos and wildlife centers, including at least one zoo with reports of animal abuse.
Minnesota
Public Comment Concluded December 12, 2023
Minnesota will receive $651.84 million in BEAD funding with an average cost to taxpayers per unserved location of $4,793. The Minnesota Office of Broadband Development’s initial proposal offers up to 15 points, out of 100, to providers who meet the price affordability requirements for 1/1 Gbps priority service. The office set a priority affordability criterion that requires providers to select rates “consistent with the broadband pricing … available in unsubsidized areas within Minnesota for that service; or is at or below the residential rates provided in the FCC Urban Rate Survey’s reasonable comparability benchmark.”
Minnesota Statutes section 237.19 indirectly limits GONs by requiring a local referendum to allow municipalities to offer public phone service. Tribes and municipalities had constructed 40 government-owned networks throughout the state by 2021, primarily in the Minneapolis metro area.
Mississippi
Public Comment Concluded December 1, 2023
Mississippi will receive $1.2 billion in BEAD funding with an average cost to taxpayers per unserved location of $4,484. The Broadband Expansion and Accessibility of Mississippi (BEAM) initial proposal, on pp. 10 and 46-48, describes how providers may earn up to 30 points out of 100 for providing 1/1 Gbps service to priority locations for less than $70 per month and zero points for more than $140 per month, as well as 30 points out of 100 for providing 100/20 Mbps service to non-priority projects, scored separately, for less than $30 per month, and zero points for more than $80 per month. Mississippi law does not restrict GONs, but none were in operation in the state as of 2021. In 2022, Senate Bill 2604 was enacted that expands the ability of municipalities to provide publicly-funded broadband service. The effect this law will have on the expansion of GONs remains to be seen.
Missouri
Public Comment Concluded December 15, 2023
Missouri will receive $1.74 billion in BEAD funding with an average cost to taxpayers per unserved location of $5,144. The Missouri Department of Economic Development’s initial proposal, on pp. 28-29 and 33, describes affordability criteria requiring providers to deliver two tiers of service, 1/1 Gbps and 100/20 Mbps (scored separately), for $100 per month or less to receive the full 100 points of credit. For every dollar above $100 per month charged, one point is deducted from the applicant’s score. Providers will thus earn zero points for charging $200 per month or more.
Although Mo. Rev. Stat. § 392.410(7) places some restrictions on GONs, seven municipalities operated publicly funded networks in the state as of 2021.
Montana
Public Comment Concluded November 23, 2023
Montana will receive $628.97 million in BEAD funding with an average cost to taxpayers per unserved location of $6,016, or $416 more than the $5,600 national median cost per location. The Montana Broadband Office’s proposal, on pp. 21-22 and 80-83, engages in rate setting by imposing price caps of $65 for 100/20 Mbps service and a $159.99 for 1/1 Gbps service for providers to receive any credit on their affordability score. To earn full points on that score, providers may charge no more than $69.99 for 1/1 Gbps service and $45 for 100/20 Mbps service. Though less restrictive than some other states, these price caps for providers to receive credit on the affordability criterion of their application will still deter increased investment in Montana’s infrastructure than if the state had chosen to avoid rate regulation altogether and instead require providers to price their plans according to the reasonable comparability benchmark determined by FCC’s Urban Rate Survey.
The state’s GON preemption statutes prohibit government-owned utilities or other taxpayer-funded broadband providers from competing against market providers in the same geographic area. Though state law historically blocked GONs from operating in areas already served by existing providers, in May 2023, Montana Senate Bill 531 watered down the prohibition in Section 90-1-605 of the Montana Code to allow GONs to provide broadband service in those areas “in partnership” with private providers. Despite this change, only two GONs operated in the state as of 2021.
Nebraska
Public Comment Concluded December 13, 2023
Nebraska will receive $405.28 million in BEAD funding with an average cost to taxpayers per unserved location of $5,750, or $150 above the national median cost per location. The Nebraska Broadband Office’s initial proposal, on pp. 30-32, 104, and 106, describes how providers may receive up to 135 points, equal to 45 percent of the total points available, for providing 1/1 Gbps service for less than $100 per month. Providers receive zero points for charging more than $130 for 1/1 Gbps service. The office will separately consider provision of a 100/20 Mbps “Low-Cost” plan, but this will not affect the Affordability criteria described above.
Neb. Rev. Stat. Ann. § 86-594 and Neb. Rev. Stat. Ann. § 86-575 prohibit any governmental entity from offering “any broadband services, Internet services, telecommunications services, or video services.” No municipalities operated publicly funded networks in the state as of 2021.
Nevada
Public Comment Concluded October 20, 2023
Nevada will receive $416.67 million in BEAD funding with an average cost to taxpayers per unserved location of $8,061, or $2,461 above the national median cost per location. The Nevada Office of Science, Innovation, and Technology (OSIT)’s proposal avoids other states’ myopic focus on fiber to the exclusion of alternatives. OSIT refrains from treating the NOFO’s 1/1 Gbps service threshold as law, opting instead for a 100 Mbps symmetrical threshold for which $50 per month serves as the reference price. Meeting the $50 per month reference price earns providers only 15 points out of 100, however, as the full 30 points require charging no more than $40 per month. A price of $60 or more earns providers a score of zero for affordability. The minimum speed threshold for any low-cost affordable plan described in its affordability sections on pp. 21-22 an 80-83, is 100/20 Mbps, which can be provided by many broadband technologies including cable, satellite, and fixed wireless.
Nevada statutes also limit the ability of GONs to wield the advantage of taxpayer resources to compete against private providers by prohibiting municipalities with more than 25,000 residents or counties with more than 55,000 residents from providing broadband as a public service. Page 85 of the proposal describes how this limitation does not violate Requirement 18 of the NOFO which specifies that a state may not categorically prohibit GONs from participation in BEAD. Only one county government and one tribal government in Nevada had built a GON by 2021.
New Hampshire
Public Comment Concluded December 13, 2023
New Hampshire will receive $196.56 million in BEAD funding with an average cost to taxpayers per unserved location of $7,686, or $2,086 above the national median cost per location.
The New Hampshire Department of Business and Economic Affairs’ initial proposal, on pp. 41-42, 91-92, and 101-102, describes how providers may earn up to 20 points out of 100 for meeting the affordability requirements for a 1/1 Gbps middle class plan and a symmetrical 100/100 Mbps low-cost plan. The department will score priority and non-priority plans separately. “Rather than set a dollar figure target at this stage regarding Middle-Class Affordability, New Hampshire intends to require any subrecipient of BEAD funding to offer (at least throughout the life of the program) the same level of services, at rates, terms, and conditions to BSLs covered by BEAD funding that match those offered to non-BEAD BSLs in the same market.” The low-cost service option, however, may not exceed $30 per month. New Hampshire law does not restrict GONs, and four municipalities operated publicly funded networks in the state as of 2021.
New Jersey
Public Comment Concluded December 8, 2023
New Jersey will receive $263.69 million in BEAD funding with an average cost to taxpayers per unserved location of $6,086, or $486 above the national median cost per location. The New Jersey Office of Broadband Connectivity’s initial proposal describes affordability criteria on pp. 20-21 that can earn providers a total of 20 points in the competitive application process. New Jersey applies the 100/20 Mbps low-cost speed threshold only to “non-fiber” projects, while reserving symmetrical Gbps service for middle-class plans in areas where symmetrical 1/1 Gbps service is already “widely offered.” In unserved and underserved areas where such speeds are not already widely available, however, the office requires only symmetrical 800 Mbps service for purposes of assessing affordability. Benchmark rates for these 800 Mbps or 1/1 Gbps symmetrical plans are to be determined by reference to the FCC’s Urban Rate Survey. New Jersey law does not restrict GONs, but only one, in Newark, had been built by 2021.
New Mexico
Public Comment Concluded December 14, 2023
New Mexico will receive $675.37 million in BEAD funding with an average cost to taxpayers per unserved location of $5,872, or $272 above the national median cost per location. The New Mexico Office of Broadband Access and Expansion’s Connect New Mexico initial proposal describes, on pp. 39 and 147-155, how providers may earn 50 points for meeting the reference prices determined by the FCC’s Urban Rate Survey for providing 1/1 Gbps service for priority locations and 100/20 Mbps to “other” locations. Providers may earn a further 50 points for charging a monthly price significantly discounted below the reference price.
Sen. Cruz’s September 2023 report noted, “The top two most expensive cost-per-location awards—$236,000 and $191,000—went to companies in New Mexico that will provide fiber broadband service to 135 households for a combined $26 million. By contrast, the Technology Director for the Cuba Independent School District in New Mexico recently testified before Congress that his school district purchased satellite-based (non-fiber) broadband for unconnected households, with a reported cost per location of $500, or two percent of the cost of the two recent New Mexico ReConnect projects. Further, the project reached speeds in excess of BEAD requirements and, according to the Technology Director’s testimony, satellite connections were installed quickly and avoided permitting obstacles common with fiber builds. The Biden administration’s extreme fiber bias will thus invariably lead to overspending and diminished competition at the expense of unserved communities.”
New Mexico law does not restrict GONs. One municipality, the City of Santa Fe, and two tribal governments operated publicly funded networks in the state as of 2021.
New York
Public Comment Concluded December 6, 2023
New York will receive $664.62 million in BEAD funding with an average cost to taxpayers per unserved location of $4,449. The New York ConnectAll Office’s initial proposal grants 15 points to providers to fully comply with the state’s affordability criteria described on pp. 44, 47, 51, and 126-27, which require providers to suggest rates for both 1/1 Gbps symmetrical service and 100/20 low-cost service. These criteria require providers to submit their lowest possible price for each tier of service and grant full points only to the provider with the lowest price for given service. Likewise, to fulfill the middle-class affordability requirement, providers must submit the best service they can provide for $50 or less, $75 or less, and $100 or less per month. This process avoids the disincentive of outright rate regulation but fails to provide the kind of useful regulatory clarity that most encourages investment. New York law does not prohibit GONs, but only three such networks operated in the state as of 2021.
North Carolina
Public Comment Concluded December 5, 2023
North Carolina will receive $1.53 billion in BEAD funding with an average cost to taxpayers per unserved location of $4,076. North Carolina’s initial proposal, on pp. 10-12, and 56-59, describes affordability criteria that require providers to deliver 1/1 Gbps symmetrical speeds for less than the annual U.S. Benchmark Rate determined by the FCC’s annual Urban Rate Survey to receive the full 15 points of credit toward their application. “The division will not require speed packages at a certain price point; however, the division will award additional points for internet speed packages at a cost less than the most recent FCC Urban Rate Survey US Benchmark Rate.” A 100/20 Mbps plan for no more than $30 is also required. North Carolina Statutes Chapter 160A, Article 16A, created by a 2011 law, aims “to protect jobs and investment by regulating local government competition with private business.” The law recognizes the need to “ensure that the State does not indirectly subsidize competition with private industry through actions by cities and to ensure that where there is competition between the private sector and the State, directly or through its subdivisions, it exists under a framework that does not discourage private investment and job creation.” Nonetheless, there are 14 GONs across the state.
North Dakota
Public Comment Concluded November 30, 2023
North Dakota will receive $130.16 million in BEAD funding with an average cost to taxpayers per unserved location of $16,294, or $10,694 above the $5,600 national median cost per location, higher than every state other than Delaware and Rhode Island. More than 75 percent of North Dakota residents already enjoy access to 1 Gbps/100 Mbps service and 95.4 percent have access to 100 Mbps speeds. North Dakota law does not restrict GONs. One GON, Standing Rock Telecom, serves North Dakota residents of the Standing Rock Sioux Tribe from the South Dakota side of the cross-border Indian Reservation.
Ohio
Public Comment Concluded November 21, 2023
Ohio will receive $793.69 million in BEAD funding with an average cost to taxpayers per unserved location of $4,320. The Ohio Department of Development’s initial proposal, on p. 11, describes how the state’s Middle-Class Affordability criteria will make up 41 percent of the points attributed to providers applications. Providers must make a 100/20 Mbps Low-Cost Service Option available to low-income households for no more than $30 per month, but “priority” broadband projects have a unique affordability criterion. The department will calculate a statewide weighted average of the price points requested by every provider’s funding application and award points in proportion to the difference between each provider’s suggested rate and that statewide weighted average.
Oklahoma
Public Comment Concluded November 27, 2023
Oklahoma will receive $797.44 million in BEAD funding with an average cost to taxpayers per unserved location of $5,290. The Oklahoma Broadband Office’s initial proposal, on pp. 22-23, lays out the weights given to the office’s affordability and other requirements. If providers meet both the Low-Cost Broadband Service Option and Middle-Class Affordability provisions, combined, they may earn up to 52 points out of a total of 160. To fulfill the Low-Cost Service Option requirement to deliver 100/20 Mbps service to low-income households, providers may earn up to seven points by charging no more than $60 per month. To fulfill the Middle-Class Affordability requirement, however, the office perversely imposes a $30 per month cap for symmetrical 1/1 Gbps service for providers to receive the full 45 points of credit.
The office evidently does not expect any provider to receive full credit for middle-class affordability. This $30 benchmark price for Gbps speeds represents the single most restrictive instance of broadband rate regulation CAGW has identified in any state. While full credit requires meeting the $30 mark, providers will earn a score of zero on affordability by exceeding $100 per month. There are no restrictions in the state against building GONs.
Oregon
Public Comment Concluded December 9, 2023
Oregon will receive $688.91 million in BEAD funding with an average cost to taxpayers per unserved location of $5,629. Business Oregon’s initial proposal, on pp. 38 and 42, awards 20 out of 100 points to providers who meet the affordability requirements for both priority 1/1 Gbps FTTP plans and non-priority 100/20 Mbps plans. “Applications,” the draft proposal reads, “will be scored based on applicants’ commitments to offer, for the lifetime of the asset, … service to BEAD-funded locations that will not exceed the cost of the same service in any other location in Oregon or surrounding states in which the applicant offers service. Full points will be awarded to applications that make this commitment in clear and unambiguous terms, without caveats that compromise the commitment.” The ability of providers to use the same criteria for both BEAD-subsidized and unsubsidized areas of the state should make it more efficient and effective to provide broadband. Oregon state law does not limit GONs, and 23 government-financed networks had been built in the western part of the state by 2021.
Pennsylvania
Public Comment Concluded November 14, 2023
Pennsylvania will receive $1.16 billion in BEAD funding with an average cost to taxpayers per unserved location of $4,171. With a $54 price cap for a 1/1 Gbps plan and a $30 cap for full credit on the affordability criterion for a 100/20 Mbps plan, however, the Pennsylvania Broadband Development Authority’s proposal copies its rate setting rules directly from the BEAD NOFO’s nonbinding guidance, with no consideration for local conditions or the barrier these requirements will create for private sector investment in Pennsylvania. The proposal, on pp. 22, 24, and 68-71, describes how charging $54 per month or less for 1/1 Gbps service (to priority locations) earns providers the maximum 25 points out of 100, while $95 or more earns zero points. For purposes of Middle-Class Affordability scoring, providers must deliver 100/20 Mbps service to other (non-priority) locations for no more than $54 per month. Exceeding that price yields a score of zero. To meet the Low-Cost Broadband Service Option requirement, however, providers must deliver 100/20 Mbps service for no more than $30 per month for households eligible to participate in the Affordable Connectivity Program, but this requirement does not affect applicants’ Middle-Class Affordability score described above.
At the same time, however, Title 66 of the Pennsylvania Code provides limitations on access to BEAD funding for GONs, which “may not provide broadband services unless the local telephone company has refused to provide the requested speed – regardless of the prices charged.”. With that limitation, only one GON operates in the state.
Rhode Island
Public Comment Concluded December 4, 2023
Rhode Island will receive $108.72 million in BEAD funding with an average cost to taxpayers per unserved location of $47,084, or $41,484 above the national median cost per location. The Rhode Island Commerce Corporation’s ConnectRI initial proposal, on pp. 36-38 and 131-134, describes how providers may earn up to 35 points out of 100 for committing “for five (5) years, subject to inflation adjustments” to provide “the most affordable total monthly price to the customer … in the proposed project area unit” for 1/1 Gbps service to priority broadband projects and 100/20 Mbps for other projects. Rhode Island is one of seven states to pursue this non-specific affordability standard that ranks the affordability of providers’ applications relative to other providers rather than scoring it against a predictable, objective pricing criterion.
Rhode Island law does not restrict GONs, and three operated in the state as of 2021.
South Carolina
Public Comment Concluded November 30, 2023
South Carolina will receive $551.54 million in BEAD funding with an average cost to taxpayers per unserved location of $4,612. The South Carolina Broadband Office’s initial proposal, on pp. 22-23, 25, and 67-69, describes how providers may earn up to 25 points for providing 1/1 Gbps service to priority locations and 100/20 Mbps service to non-priority locations, scored separately, for less than other BEAD-applicant providers charge. “The lowest service package cost of … service will receive full points. In the case of partnerships, affordability will be calculated on the average … between partners. More expensive service packages will receive a percentage of points relative to the lowest service package cost per month for the same county.”
Article 23 of Chapter Nine of the South Carolina statutes (S.C. Code Ann. § 58-9), “places many restrictions and hurdles” on municipalities considering building a GON. “Among other requirements, they must ‘impute’ costs that private entities would pay for all costs associated with building a network.” There are only two GONs in the state as of 2021, in the counties of Orangeburg and Oconee.
South Dakota
Public Comment Concluded December 1, 2023
South Dakota will receive $207.23 million in BEAD funding with an average cost to taxpayers per unserved location of $7,297, or $1,697 above the national median cost per location. The South Dakota Governor’s Office of Economic Development awards 25 out of 200 points, or 12.5 percent of total points, to broadband providers that fulfill the affordability criteria laid out on p. 19 of its initial proposal. To fulfill the Middle-Class Affordability requirement, the office will judge providers on the rates they propose to charge for 1/1 Gbps symmetrical service, and for the Low-Cost Affordability requirement, providers will be weighed on the basis of the rates they charge for 100/20 Mbps service. South Dakota law does not restrict GONs, and three tribal governments operated publicly funded networks in the state as of 2021.
Tennessee
Public Comment Concluded December 10, 2023
Tennessee will receive $813.32 million in BEAD funding with an average cost to taxpayers per unserved location of $4,363. The Tennessee Department of Economic and Community Development’s initial proposal on pp. 15-16, 63-67 and 71-75, requires providers to deliver 100/20 Mbps service for no more than $50 per month, and 1/1 Gbps service for no more than $0.24 per megabit, or $240 per gigabit, with no other associated costs to the consumer. These affordability provisions make up 30 percent of providers’ possible score. Tennessee Code Ann. § 7-52-601 et. seq. partially limits the areas GONs may cover, and there are 15 municipal GONs that have built or are being constructed.
Texas
Public Comment Concluded December 4, 2023
Texas will receive $3.31 billion in BEAD funding with an average cost to taxpayers per unserved location of $4,250. The Texas Broadband Development Office chose to avoid including either a speed benchmark or a fixed rate cap in the affordability requirements laid out on pp. 28-29 and 81-83 of its initial proposal. Instead, the proposal’s Affordability section states, “All eligible applicants will be required to participate in the Federal Communications Commission’s (FCC) Affordability Connectivity Plan (ACP), any successor program and/or any other household broadband subsidy programs.” The proposal includes speed benchmarks of 1/1 Gbps and 100/20 Mbps “for Selection Among Other Last-Mile Broadband Deployment Projects,” but does not use these benchmarks for determining providers’ fulfillment of affordability requirements. Chapter 54, Section 201 of the Texas Utilities Code prohibits municipalities from using public resources to operate a telecommunications network; however, broadband service arguably falls outside of the statute’s definition of telecommunications. There are at least five Texas municipalities that have built public broadband networks.
Utah
Public Comment Concluded December 15, 2023
Utah will receive $317.4 million in BEAD funding with an average cost to taxpayers per unserved location of $7,641, or $2,041 above the national median cost per location. The Utah Broadband Center’s Connecting Utah initial proposal describes, on pp. 23, 26, 32-35, and 83-86, as well as in a scoring rubric addendum, how providers will receive 15 points out of 100 for delivering 1/1 Gbps service for less than $70 per month to priority locations, and zero points for charging more than $119.99. Providers may also earn 15 points out of 100 for delivering 100/20 Mbps service for no more than $60 per month to non-priority locations, and zero points for charging more than $105.03.
Although Utah Code § 10-18 place various restrictions on GONs, 15 municipalities nevertheless operated publicly funded networks in the vicinity of Salt Lake City, as of 2021, most of which serve as wholesale distributors rather than retail broadband providers. Chapter 18 of Title 10 of the Utah Code, which is the Municipal Cable Television and Public Telecommunications Services Act, requires GONs to “conduct feasibility studies to show the network will cash flow in the first year and that separate services will each cash flow separately. Wholesale-only networks are exempted from some of the above requirements. This is a de facto prohibition on retail community broadband networks.”
Vermont
Public Comment Concluded October 15, 2023
Vermont will receive $228.9 million in BEAD funding with an average cost to taxpayers per unserved location of $6,803, or $1,203 more than the national median cost per location. For providers to receive full credit on the affordability criterion of their proposal, Vermont imposes a $45 per month rate cap for a 100/20 Mbps plan. For priority locations, states the proposal, a “prospective subgrantee” will be scored on the basis of its “commitment to provide the most affordable total price to the customer for 1 Gigabit per second (Gbps)/1 Gbps service in the project area, [or 100/20 Mbps for non-priority locations] both now and into the future. Points will be awarded for a demonstrated commitment to reinvest revenue into customer affordability.”
Lacking any state preemption rule, Vermont tilts the playing field in favor of GONs by allowing them to subsidize broadband rates with energy revenues or with taxpayer funds – a form of taxpayer bailout in slow motion. State law also lacks other states’ protections against anti-competitive behavior by GONs, eminent domain abuse, or other potential abuses. This lack of preemption has produced a proliferation of GONs in the state with 26 operating in the state as of 2021.
Virginia
Public Comment Concluded September 19, 2023
Virginia will receive $1.48 billion in BEAD funding with an average cost to taxpayers per unserved location of $4,068. The state has 2.6 percent of the U.S. population, but it received 3.48 percent of all BEAD funds distributed nationally. The draft submitted to NTIA by the Virginia Telecommunications Initiative and Commonwealth Connect proposed, on pp. 10-11 and 51-57, to determine providers’ Middle-Class Affordability scores according to two speed tiers, 1/1 Gbps and 100/20 Mbps. To Virginia’s credit, the state proposed to meet the NOFO’s affordability requirement by rating the affordability of providers’ proposals according to their conformity with the residential benchmark rates identified in the FCC’s Urban Rate Survey. Though the FCC survey does not list any speed greater than one 1 Gbps / 500 Mbps, Virginia nevertheless applied the FCC’s recommended price for that speed to its 1/1 Gbps (symmetrical up/down) tier.
Chapters 10 and 15 of Virginia statutes Title 56 also include various procedural and reporting requirements that bring GONs down to an almost-level playing field with private providers, including the requirement to conduct a feasibility study before offering service and a prohibition against exploitative monopoly pricing. On November 1, 2023, Virginia began its BEAD challenge process following approval of Volume I of its application by NTIA, but Volume II of its proposal, containing the affordability and speed threshold provisions, has yet to receive final approval. NTIA refused to accept Virginia’s proposal to guarantee a Low-Cost Service Option without regulating the monthly price of that plan and the Commonwealth is challenging that decision.
Washington
Public Comment Concluded November 30, 2023
Washington will receive $1.23 billion in BEAD funding with an average cost to taxpayers per unserved location of $5,190. The Washington Department of Commerce will award up to 27 points to providers for fulfilling the affordability criteria laid out on p. 36 of the department’s initial proposal. To receive the full 20 points, providers must charge less than $75 per month for households or businesses receiving 1/1 Gbps service and less than $40 per month for households receiving the 100/20 Mbps low-cost service. Ten points are awarded for staying under each benchmark rate. Providers will earn half points for “1/1 Gbps service between $75 – $84.99 per month” or “100/20 Mbps service for $40 – $49.99 per month,” and zero points for charging $85 or more for 1/1 Gbps and $50 for 100/20 Mbps.
A bill signed into law on May 13, 2021, expanded the number of government entities that could build GONs. By 2021, 78 Washington municipalities and four tribal governments had constructed GONs – more than any other state.
West Virginia
Public Comment Concluded November 20, 2023
West Virginia will receive $1.21 billion in BEAD funding with an average cost to taxpayers per unserved location of $4,457. West Virginia’s initial proposal, on p. 33, describes how the state’s Department of Economic Development will award 25 out of 200 points to providers whose proposals provide 1/1 Gbps symmetrical service for no more than $75 per month and a lower-cost option for no more than $50 per month. Providers earn one point for every dollar below $75 per month, up to 25 points. This means providers can earn full points by charging no more than $50, and zero points for charging $75 or more.
As the proposal states, “WVDED shall award … one point for each one dollar increment below the total service cost of $75. … Projects that receive more than 25 points under these affordability formulas shall be awarded the maximum available number of 25 points. … prices shall be rounded by WVDED to the nearest whole number (e.g., $65.99 would be rounded to $66 for the purposes of this calculation).” The department scores priority and non-priority proposals separately, and the affordability provisions make up one-eighth of providers’ total score in each case. Although West Virginia law does not prohibit GONs, none operated in the state as of 2021.
Wisconsin
Public Comment Concluded December 11, 2023
Wisconsin will receive $1.06 billion in BEAD funding with an average cost to taxpayers per unserved location of $4,171. The Wisconsin Broadband Office’s initial proposal, on pp. 32, 34, and 86, describes affordability criteria that include the requirement to offer symmetrical 100/100 Mbps service for no more than $75 per month. Abiding by this low-cost affordability criterion can earn a provider up to 10 points in the competitive application process. Fiber-to-the-premises “priority” projects delivering 1/1 Gbps may charge no more than $100 per month for providers to earn all 23 points available for the middle-class affordability criterion. In both cases, providers must commit to maintaining rates below these thresholds for five years without adjustment for price inflation. Any accepted application must earn a minimum of 40 points. Merely meeting these reference prices, however, does not earn a provider full credit.
As the proposal states, “Any FTTH (priority) application or FTTH service within a hybrid application that includes a five-year commitment to offer symmetrical 1 Gbps service for a monthly reference price of more than $100…shall receive a percentage of points reflective of their percent distance from the $100 per month reference point.” For prices above $100, the following formula applies: Score = 0.2 × [150 − Commitment Price]. Charging $150 or more therefore earns providers a score of zero for affordability. For prices lower than $100, however, further credit is applied as the proposed price approaches zero, according to the following formula: Additional Score = 0.18 × [100 − Commitment Price]. Providers may therefore only earn the final 18 points, above the 15 points earned for meeting the $100 reference price, by charging $0 per month.
Only providers offering symmetrical Gigabit service free-of-charge may earn full credit on their application. Many states have made the task of attaining full credit on a BEAD application considerably difficult for broadband providers, but three states, Illinois, Wisconsin, and Wyoming, make it impossible by requiring providers to deliver high-speed internet free of charge.
Wisconsin Statute section 66.0422 creates several administrative hurdles for the creation of a GON, but there were still nine municipal or tribal-owned government networks operating throughout the Badger State as of 2021.
Wyoming
Public Comment Concluded November 17, 2023
Wyoming will receive $347.88 million in BEAD funding with an average cost to taxpayers per unserved location of $8,871, or $3,271 above the national median cost per location. The Wyoming Business Council’s initial proposal, on pp. 41-42 and 101-104, describes how providers will receive a Middle-Class Affordability score based on a $100 reference price for priority (fiber) projects with a 1/1 Gbps speed benchmark and a $70 reference price for 100/20 Mbps non-priority (non-fiber) plans. Meeting these reference prices, however, earns providers only partial credit.
As the proposal states, “Applicants will receive points based on the percentage difference between their proposed price and the $100 reference price on a sliding scale between 100% below and 100% above the reference price. For example, if the applicant’s proposed price is 0% of the reference price, they will receive 15 points; if an applicant’s price is equal to the reference price, they will receive 7.5 points; if an applicant’s price is 200% or more of the reference price, they will receive 0 points.” Providers charging $200 or more for fiber projects, or $140 or more for non-fiber projects, therefore receive zero points for affordability. Given that only a provider offering to deliver 1/1 Gbps service for a price of $0 per month can earn the full 15 points of hypothetical credit, Wyoming policymakers evidently designed their affordability scoring matrix such that full credit cannot be attained by any provider.
Providers must commit to maintaining their prices for eight years with no inflation adjustment. Wyoming’s $100 cap for 1/1 Gbps coverage will deter significantly more industry participation than Montana’s $157 cap, and likely drive investment to its northern neighbor.
On the positive side, however, in 2018, Wyoming enacted S.B. 100, which created a statewide broadband funding program and prohibited taxpayer funded GONs from expanding into locations already served by existing broadband providers. As of 2021, only one GON operated in the state.
TERRITORIES
American Samoa
Public Comment Concluded December 3, 2023
American Samoa will receive $37.56 million in BEAD funding with an average cost to taxpayers per unserved location of $21,068, or $15,468 above the $5,600 national median cost per location – higher than every state except Delaware and Rhode Island. While 1,783 locations remain “unserved” for lack of access to 25/3 Mbps service, most residents qualify as “underserved” because, given the islands’ remote location, only 20.27 percent enjoy access to 100/20 Mbps service through fixed broadband providers.
The American Samoa Department of Commerce’s initial proposal on pp. 14, 16, and 35-37, describes how applicants may earn 15 out of 100 points for providing “the most affordable total price for a 1Gbps download / 1Gbps upload plan” for “priority” end-to-end fiber optic projects, and 35 points out of 100 (scored separately) for providing the most affordable total price for a 100/20 Mbps plan for non-FTTP projects. This methodology categorizes American Samoa with the 10 states that have adopted similar relative-price affordability metrics rather than objective, predictable affordability benchmarks. This approach, while preferable to rate-setting for encouraging investment, provides less predictive clarity than those affordability strategies adopted in the 12 states that use either the FCC Urban Rate Survey benchmark rates or a geographic price-parity approach.
District of Columbia
Public Comment Concluded December 19, 2023
The District of Columbia will receive $100.7 million in BEAD funding with an average cost to taxpayers per unserved location of $547,254, or $541,654 above the national median cost per location. This cost-per-location exceeds that of the closest state, Delaware, by a margin of $494,746. The D.C. Office of the Chief Technology Officer initial proposal, on pp. 10, 12, and 36-39, describes how providers’ applications may earn 25 points out of 100 for meeting the Low-Cost Broadband Service Option requirement to provide 100/20 Mbps service for no more than $30 per month. It states, “More expensive packages receive a percentage of points reflective of their percent distance from $30 per month.” The office will not use a 1/1 Gbps speed threshold to assess plans’ affordability. Washington, D.C. does not operate a government-run broadband network.
Guam
Public Comment Concluded December 11, 2023
Guam will receive $156.8 million in BEAD funding with an average cost to taxpayers per unserved location of $4,547. While many locations remain unserved, 87.25 percent of locations in the island territory already enjoy access to 100/20 Mbps service through fixed broadband providers. The Guam Office of Infrastructure Policy and Development’s initial proposal, on pp. 25-26, 61-64 and 70-73, describes how providers may earn the full six points of credit for delivering a “Middle Class Plan Option” of 100/20 Mbps service for no more than $75 per month. Recognizing the infeasibility of serving a remote island with FTTP, the office specifies that middle class plan proposals “that leverage high-speed fixed wireless technologies… within this price bracket will be considered positively.” Providers may earn an additional six points for “Low-Cost Plan Availability” by providing a $50 per month plan for 100/20 Mbps service to “economically disadvantaged demographics,” with “an emphasis on high-speed fixed wireless services where applicable, …. The inclusion of a low-cost tier demonstrates the provider’s commitment to widespread affordability.”
Providers may earn an additional three points by refraining from charging any additional fees beyond the monthly rate and two further points by making a commitment to long-term, multi-year price stability. While Guam qualifies as a rate regulator due to its imposition of specific price caps for applicants to receive full credit, it also, separately, includes a relative pricing score that awards a further three points to providers who “offer more features or better service at the same or lower cost compared to the current market rates for comparable services.”
Northern Mariana Islands
Public Comment Concluded December 3, 2023
The Commonwealth of the Northern Mariana Islands will receive $80.8 million in BEAD funding with an average cost to taxpayers per unserved location of $7,820, or $2,220 above the national median cost per location. The initial proposal submitted by the Office of the Governor of the Commonwealth of the Northern Mariana Islands attributes 15 percent of providers’ score to meeting the following affordability criteria. Page 20 reads, “Up to 15 points will be awarded based on the monthly price of a 1Gbps symmetrical service plan. Application will receive a maximum 15 points for committing to a price of $250/month. They will receive 7.5 points for $500/month and no points for $1000+/month.” . The Commonwealth also requires a Low-Cost Service Option but does not prescribe specific rates. .
Puerto Rico
Public Comment Concluded December 10, 2023
Puerto Rico will receive $334.6 million in BEAD funding with an average cost to taxpayers per unserved location of $5,408. The Puerto Rico Office of Management and Budget’s (OGP) initial proposal describes, on pp. 46, 94-96, 107, and 109, how meeting the Commonwealth’s affordability requirements will earn providers’ applications up to 60 points out of 400 points total for charging at least 15 percent less than the Commonwealth’s benchmark rate. This rate, however, has not yet been determined. Once OGP chooses this rate, “Bidders will be assigned points in this category based on the following criteria: 0 points for coming in at the Benchmark Rate or higher. 20 Points for a 5% discount, 40 Points for a 10% discount, and 60 Points for a 15% discount. The ‘benchmark’ rate will be set at a level to encourage proposals that are below current available commercial rates for similar services.”
U.S. Virgin Islands
Public Comment Concluded December 16, 2023
The U.S. Virgin Islands will receive $127.1 million in BEAD funding with an average cost to taxpayers per unserved location of $48,659, or $43,059 above the $5,600 national median cost per location. Of more than 57,100 addresses in the territory, only 557 remain unserved, fewer than any other state or territory, because 98.68 percent of addresses in the island territory already enjoy access to 100/20 Mbps service through fixed broadband providers, and 96.28 percent have access to 250/25 Mbps speeds. Providers may earn full credit on their Low-Cost Broadband Service Option assessment by providing 100/20 Mbps service for $30 or less per month to low-income households.
The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.
