Legal analysts are questioning the recent assertion by the head of the National Telecommunications and Information Administration (NTIA).

NTIA administrator Arielle Roth said last week that the agency she oversees will withhold federal broadband deployment funds from states that have laws enforcing net neutrality or that have enacted affordable broadband legislation similar to New York’s Affordable Broadband Act.

As the assistant secretary overseeing the $42.5 billion Broadband Equity, Access, and Deployment (BEAD) program, Roth’s legal reasoning is striking.

All the more so given that the New York Affordable Broadband Act that requires Internet service providers in the Empire State to offer a low-cost broadband service plan to income-eligible households has been upheld as Constitutional – a case in which the Supreme Court twice declined to intervene and overturn.

Yet, last week in speaking before the conservative Hudson Institute, Roth offered remarks that have legal observers scratching their heads in bewilderment. During her speech, Roth said:

“Consistent with the law, which explicitly prohibits regulating the rates charged for broadband service, NTIA is making clear that states cannot impose rate regulation on the BEAD program. To protect the BEAD investment, we are clarifying that BEAD providers must be protected throughout their service area in a state, while the provider is still within its BEAD period of performance. Specifically, any state receiving BEAD funds must exempt BEAD providers throughout their state footprint from broadband-specific economic regulations, such as price regulation and net neutrality.”

The stakes are high for broadband affordability advocates across the nation. 

The Maine Connectivity Authority (MCA) has chosen Sertex Broadband Solutions to help build and manage a massive portion of the state’s 536-mile Maine Online Optical Statewide Enabling Network (MOOSE Net) middle mile fiber network.

According to the MCA, Sertex will engineer and construct a 450-mile segment of MOOSE NET on the back of a $30 million grant.

The effort is expected to dramatically improve broadband connectivity for 11,000 homes and businesses as well as 200 community anchor institutions, including rural Maine schools, libraries, and healthcare facilities.

The decision comes after the MCA, Maine’s quasi-governmental public agency in charge of broadband expansion and digital equity, issued a request for proposal (RFP) back in late 2024 looking for partners.

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“Maine's low population density and rural geography make it difficult to attract the same investment that other states have seen over the past two decades, “ MCA President Andrew Butcher said. “We are excited to work with Sertex with their proven track record of delivering a network of this scale, and one that is so critical for our State. MOOSE Net will ensure that Maine has the broadband infrastructure that communities and businesses need to thrive and grow.”

In partnership with the Maine Department of Transportation and The University of Maine System, MCA secured a $30 million competitive grant from the National Telecommunications Information Administration's (NTIA) Enabling Middle Mile Broadband Infrastructure Program. The MCA middle mile proposal was one of 32 selected from a pool of more than 260 applications submitted to the NTIA.

Update Below - New Information

NTIA, the federal office administering the largest single investment to expand Internet access across the nation, appears to once again be changing the BEAD program in ways that would only force states to further reduce investment in rural areas.

Commerce Secretary Howard Lutnick, who oversees the NTIA office, has already introduced delays to the $42.5 billion Internet access expansion program, creating a year-long slow-down at a time when many states could be already connecting homes.

Now, even as the administration claims to be expediting the process, NTIA seems to have added yet another time-consuming wrinkle: a super secret “Best and Final Offer” round imposed on states after submitting final proposals.

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A quick reminder of where we are: states were forced to redo all their work in recent weeks to follow new rules aimed at cutting costs by making the program demonstrably worse for hundreds of thousands of families.

Rather than spend money to help get these families access to comparably affordable fiber networks, states now have to push billions toward low-Earth orbit satellite services which offer them far worse connectivity at much higher prices to each subscriber. And yet, NTIA called this process of reducing investment in rural America the “Benefit of the Bargain” round.

The mystery of who and what killed the California Affordable Home Internet Act is coming into view.

As a California lawmaker hinted when the bill was abruptly withdrawn in June, the evidence seems to be pointing to the new leadership now directing the National Telecommunications and Information Administration (NTIA) – the agency administering the $42.5 billion federal BEAD program to expand Internet access.

In a recently released FAQ published by the NTIA this week, a corroborating clue has emerged.

And what may be the smoking gun is a bullet buried on page 48, under section 3.29, after the question: "May an Eligible Entity (states) require a specific rate for the low-cost service option (LCSO) when required by state law?”

NTIA's answer:

“No. The IIJA prohibits NTIA or the Assistant Secretary from engaging in rate regulation. Because the Assistant Secretary must approve the LCSO in the Final Proposal, the rate contained may not be the result of rate regulation. The RPN (Restructuring Policy Notice) addressed this fundamental flaw in the BEAD NOFO. The RPN eliminated BEAD NOFO requirements dictating price and other terms for the required low-cost service option.”

“Per the RPN, states may not apply state laws to reimpose LCSO requirements removed by the RPN. More specifically, the RPN ‘prohibits Eligible Entities from explicitly or implicitly setting the LCSO rate a subgrantee must offer’ (BEAD Restructuring Policy Notice, p.7). Violation would result in rejection of the Final (BEAD) Proposal (emphasis added).”

Recent Trump administration changes to a massive federal broadband grant program are lowering standards for broadband access, shifting the focus away from affordability and equity, and potentially redirecting billions of dollars away from future-proof fiber networks toward slower, more expensive satellite options that don’t seem likely to fix U.S. broadband woes.

But states, worried about losing an historic round of broadband grants, may be too intimidated to be up front about the potential downside of changes the Trump administration calls “the benefit of the bargain.”  

That’s the early story coming out of states like Tennessee, Colorado, and Texas, where state leaders are being forced to dramatically revamp billions of dollars in Broadband, Equity, Access, and Deployment (BEAD) grant planning.

In all three states the changes have introduced new delays and lowered last mile quality control standards. But an early look at the revamped bidding process in all three states shows that billions of dollars are likely being redirected away from locally-owned fiber networks to billionaire-owned low-Earth-orbit (LEO) satellite broadband options insufficient to the task.

In the wake of the Trump administration’s re-writing the rules around how federal funds can be spent to expand high-speed Internet access, state broadband offices are in the midst of revamping their broadband deployment grant programs to comply with a “technology-neutral” framework recently imposed on the $42.5 billion federal BEAD (Broadband Equity, Access, and Deployment) program.

Though most states hoped to maximize federal grant funding to build fiber networks, the new guidance released by NTIA in June requires states to ignore the aim of Congress enacted under the bipartisan infrastructure law.

The new NTIA rules call for states to de-prioritize fiber and give equal weight to Low Earth Orbit (LEO) satellite technologies – something many observers see as a gift to Starlink and a way for the President’s biggest campaign contributor to hoover up additional subsidies.

As states wrestle with how to re-do their scoring rubrics used to determine grant awards, today four leading broadband deployment scholars working with the X-Lab released an analysis that may help state broadband offices evaluate “the capacities and saturation limits of the Starlink satellite infrastructure.”

The overarching goal is to help states determine where – and if – Starlink can meet federal requirements for broadband, which is defined as delivering minimum connection speeds of at least 100 Megabits per second (Mbps) download and 20 Mbps upload.