Biden Administration’s Harmful Broadband Price Controls (Opinion)

The recent move by the Federal Communications Commission to begin the process of reinstating Title II rules on internet providers is just the latest instance of the Biden administration saying one thing yet doing another in terms of broadband price controls.

FCC Chairwoman Jessica Rosenworcel emphasized that the commission does not plan to regulate rates, echoing her previous remarks that “no how, no way” is the order a “stalking horse for rate regulation.” The reality is that the notice of proposed rulemaking for the Safeguarding and Securing an Open Internet order is less clear. That document states that “we believe that Commission ex ante rate regulation is unnecessary because the tailored approach we adopt here will enable the Commission to promote broadband deployment and competition, and because we will be able to rely on sections 201 and 202 to address issues on an ex post basis.”

That type of double-speak is also occurring in other agencies within the Biden administration. National Telecommunications and Information Administration (NTIA) Administrator Alan Davidson said in questions following his confirmation hearing that the Infrastructure Investment and Jobs Act (IIJA) did not give his agency the ability to implement price controls through the Broadband Equity, Access and Deployment (BEAD) Program.

Davidson told Sen. Roger Wicker (R-Miss.), “I agree that the IIJA statute does not allow NTIA to engage in rate regulation in the BEAD program,” he said. “In addition, history has shown us that rate regulation is not the most effective policy for ensuring affordable services.”

Department of Commerce (DOC) Secretary Gina Raimondo echoed those comments, when she told Sen. John Thune (R-SD) in a Senate Commerce Committee hearing that “we are not rate regulating, we are not price setting, and we are not requiring states to do that.”

But actions by NITA and the DOC run contrary to those words. One of the biggest examples of this double-speak was the decision by NTIA to require a “middle class affordability plan” from states for BEAD, an addition not authorized by Congress. Davidson has said that states have flexibility in implementing BEAD plans pursuant to the notice of funding order, but this hasn’t exactly been the case in practice.

For example, despite Virginia requesting flexibility not to regulate the pricing of gigabit broadband plans, NTIA expressly told Virginia that they must regulate pricing. Chandler Vaughn, broadband policy analyst at the Virginia Department of Housing and Community Development, said during a Q&A session about the state’s BEAD plan that “we were pointed back to the NOFO and politely told that that was the way we are to score affordability criteria…how close you are to $100 on that price point.”

In its filing on the FCC’s notice of public rule-making regarding digital discrimination, NTIA explicitly calls for rate regulation, noting that “we urge the Commission to include pricing practices as a possible source of the digital discrimination that Congress directed the Commission to prevent with these rules.”

The Taxpayers Protection Alliance joined a coalition that sent a letter to Raimondo noting these issues of price controls and urging her “to take the necessary steps to undo rate regulation, including by making clear to state they are prohibiting from rate regulating and rejecting any BEAD plans that include price setting of any kind.”

Given the sheer amount of taxpayer funds now being allocated toward the broadband expansion effort (north of $100 billion), it’s unfortunate that the Biden administration is harming efforts to close the digital divide in a time when the broadband industry is facing challenges like inflation and worker shortages. The NTIA needs to implement the plan approved by Congress rather than try to add their own controls that will only lower participation in the BEAD program.