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Supporting free-market solutions in broadband rate setting

In a time when government regulations increasingly encroach upon various sectors of the economy, Mountain States Policy Center stands firm in its commitment to free-market principles. Recently, MSPC joined a coalition led by the Center for Individual Freedom to voice strong opposition against the Biden Administration's attempts to regulate broadband internet rates. This move not only defies Congressional intent but also jeopardizes the efficacy and growth of the broadband sector.

The issue at hand centers around the Infrastructure Investment and Jobs Act, which explicitly prohibits the regulation of broadband rates. Despite this clear directive, the National Telecommunications and Information Administration has been implementing price-setting measures through the Broadband Equity, Access, and Deployment (BEAD) program. Such actions contradict sworn statements from NTIA officials, including Administrator Alan Davidson and Secretary of Commerce Gina Raimondo, both of whom have acknowledged the legal prohibition against rate regulation.

In a letter addressed to Secretary Raimondo, MSPC along with over 30 other national and state free-market organizations, expressed deep concern over these regulatory overreaches. The letter underscores that by imposing specific price points or formulas to set rates, the NTIA is effectively engaging in rate regulation, thereby violating the IIJA’s provisions. This not only undermines the law but also disrupts the regulatory framework intended to foster innovation and expansion in the broadband market.

From our perspective, allowing the free market to dictate broadband rates is crucial for several reasons:

  1. Encouraging Competition and Innovation: Free-market principles encourage competition, driving companies to innovate and offer better services at competitive prices. Heavy regulation, on the other hand, can stifle innovation by imposing constraints that may not align with market dynamics.

  2. Ensuring Provider Viability: Imposing price controls can lead to financial strain on providers, particularly smaller and newer entrants, making it difficult for them to sustain operations and invest in infrastructure improvements. This could ultimately harm consumers by reducing the availability and quality of broadband services.

  3. Bridging the Digital Divide: The primary goal of the BEAD program is to close the digital divide by expanding internet access to underserved and unserved areas. However, the imposition of rate regulations could deter well-qualified providers from participating in the program, leaving these communities without the necessary resources and expertise to achieve meaningful connectivity improvements.

The coalition’s letter concludes with a clear call to action: the NTIA must cease any form of rate regulation and approve BEAD plans that do not include price-setting measures. This approach will ensure that providers remain viable and capable of delivering the needed services to bridge the digital divide effectively.

We remain steadfast in our belief that the free market, not federal mandates, should dictate broadband rates. By advocating for a regulatory environment that respects Congressional intent and fosters competition, we aim to ensure that broadband services remain innovative, affordable, and accessible to all Americans. As debates over broadband regulation continue, MSPC will persist in championing policies that uphold free-market principles and promote the long-term health of the broadband industry.

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