Danger Of Forcing Low Rates

Some State Broadband Offices are taking a stab at social engineering by trying to force BEAD grant winners to offer low broadband rates. I understand the sentiment behind this because everybody in the industry involved with digital equity issues hears stories about homes that can’t afford broadband even when it is available. I know this feels like a broadband office is doing something good, but there are a number of reasons why this is a terrible idea. The first is simple since Congress specifically prohibited the National Telecommunications and Information Administration and States from regulating rates in the BEAD grants. The more important reason why rate regulation is dangerous with BEAD is that many rural business plans are highly stressed and will have a hard time just breaking even with normal rates. I know that broadband offices want to do social good, and I applaud them for the sentiment. High rates are a problem. But it’s irresponsible to put the full burden on internet service providers to solve the digital divide with low rates. It’s irresponsible to force low rates in rural areas where costs are high while the providers serving metropolitan areas can charge high rates with impunity.