BEAD's "Middle Class Affordability" Creates Uncertainty

There are many aspects of the Broadband Equity, Access, and Deployment Program (BEAD) - the $42.6 Billion federal investment in broadband adopted last year - that states need to address when creating their own plans to provide grants to entities to accomplish the goals of the program. Since the lion's share of BEAD will be for deployment (building networks), elements such as Buy American, Davis-Bacon wage requirements, and letters of credit have drawn much attention and pushback, especially from small providers who are concerned about the possible red tape involved in participating in BEAD.

Another element of the BEAD rules that has not received as much attention but that could have a huge impact on the viability of some potential projects is the middle-class affordability mandate. As part of their plans, states are required to include proposals for "a middle-class affordability plan to ensure that all consumers have access to affordable high-speed Internet."

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BEAD rules give states wide latitude on HOW to address middle-class affordability in their boundaries. But much uncertainty remains in the months before BEAD is finally expected to hit the streets with funding.

This week, ACA Connects - the trade association that represents smaller, independent cable operators, outlined the concerns of their members in a letter to NTIA chief Alan Davidson. IN the letter ACA Connects CEO Grant Spellmeyer outlined some of the groups concerns, as well as suggestions on how to define both the terms "middle-class" and "affordable".

One well-recognized source that States and Territories might use is the Pew Research Center (Pew) analysis of middle-class broadband affordability.  Pew defines “middle class” by reference to the middle quintile of income – between 40th to 60th percentile ($45,300 – $76,200) – and “affordability” in terms of the Federal Communications Commission’s (FCC’s) assessment that broadband service is affordable if it consumes less than 2% of household income.  Under this methodology, “median middle-class broadband affordability ranged regionally from $107.64 in the Northeast to $84.79 in the South.”

It will be interesting to see how each state addresses this topic as their plans begin to roll out.