The federal Broadband Equity, Access, and Deployment (BEAD) Program provides $42.45 billion to help states expand the availability of affordable high-speed internet — now an essential tool for education, employment and more.
The National Telecommunications and Information Administration (NTIA), the federal agency that administers BEAD, does not set a benchmark for such affordability, leaving state leaders to determine what “reasonable prices” means when funds are used to expand internet access, “high-quality broadband services are available to all middle-class families … at reasonable prices.”
Like so many challenges faced by education leaders, Pew Charitable Trusts noted in a recent brief that no single solution or standard can apply across all states. The brief demonstrates how what qualifies as affordable broadband for middle-class families could vary widely.
Rather, states will need to take a customized approach to their BEAD-funded broadband access projects to meet the needs of middle-class families across diverse U.S. communities.
“As states look toward allocating BEAD funds, policymakers will need to consider local and regional variation in broadband affordability and adoption for middle-class families,” researchers wrote. “Understanding what middle-class affordability means — and developing customized, data-driven solutions — for each state and community will be vital to ensuring that BEAD-funded networks make affordable internet access a reality for the millions of Americans nationwide who still lack connectivity.”
While no single standard for broadband affordability exists, the Federal Communications Commission (FCC) in 2016 began using a benchmark of 2 percent of monthly household income.
Assuming middle-class household incomes range from $40,000 to $150,000 nationally, the 2 percent benchmark generates a national median affordability standard of $93.21. “This standard is higher than the average plan price reported by some outside organizations, such as New America, which found in 2020 that among 290 internet service plans, the average nonpromotional price was $83.41 a month,” researchers wrote. “However, it is lower than the FCC’s reasonable comparability benchmark for 2023, which indicated that an unlimited data plan offering 100 megabits per second (Mbps) for downloads and 20 Mbps for uploads should cost $105.03.”
Using that benchmark, Pew researchers demonstrated the extent to which broadband affordability varies across counties, states and regions.
For instance, the median middle-class broadband affordability ranged regionally from $107.64 in the Northeast to $84.79 in the South. Rhode Island had the highest median affordability at $150.73 a month, while Mississippi had the lowest at $68.53.
At the county level, the variation in affordability becomes most stark even within states, according to the brief. The median affordability price for Texas is $92.80, but in Dimmit County in South Texas, the affordable baseline was $41.67, and in Rockwall County, located in the Dallas-Fort Worth metroplex, affordability was $185.99.
Researchers estimated that using the 2 percent benchmark would leave as much as 30 percent of middle-class families without access to an affordable home broadband subscription. “State officials should consider a wide range of potential middle-class incomes when developing this policy,” they wrote.
Moving forward, researchers call on states and fellow analysts to update data collection on consumer demand to reflect broadband’s emergence as a necessity, rather than a luxury good, and expand affordability research to include middle-income households and collaborate to “address the legacy of flawed data collection at the federal level that has made it difficult to confirm how cost and quality inform customer perceptions of value.”
