The Infrastructure Investment and Jobs Act (IIJA) included $42.45 billion for broadband funding across the country.  Each state was guaranteed to receive at least $100 million.  The money was made available through the National Technology and Information Administration’s (NTIA) Broadband Equity Access and Deployment (BEAD) program.  Citizens Against Government Waste (CAGW) has been critical of the BEAD guidance provided by NTIA.  As states begin to receive funding and set up the process by which the money will be disbursed, CAGW has been keeping track of how this is being done.

In an October 26, 2023 letter, the Council for Citizens Against Government Waste (CCAGW) urged Montana Governor Greg Gianforte and the Montana Department of Administration to amend the ConnectMT Initial Proposal Volume II Draft for Montana’s BEAD funding application.  The current proposal to spend the state’s $649 million in BEAD funding includes provisions that would impede broadband investment, innovation, and competition in Montana, and make it more difficult to bridge the digital divide.  The letter addresses rate-regulation for low and middle-income plans and a 1 Gigabit-per-second symmetrical speed threshold for funding eligibility.

The ConnectMT proposal claims not to set rates for broadband providers utilizing BEAD funding, but its inclusion of a point-based competitive grant process that awards more points to applicants who propose to charge the preferred rate amounts to a back-door form of rate-setting.  Yellowstone County public officials agreed that these provisions would stymie investment, innovation, and competition in Montana’s broadband market, and make it more difficult for providers to continue subsidizing service for their low-income customers.  Rate regulation in any form will reduce the quantity and quality of service and leave many households without broadband. 

These tiered rate regulation provisions governing both low- and middle-income plans violate the statutory requirements set in the IIJA, which explicitly prohibits rate setting.  The ConnectMT proposal's affordability provisions draw from the non-binding BEAD guidance, which has no statutory basis and does not carry the force of law.  In an October 24, 2023, Senate Commerce, Science, and Transportation Committee hearing, Secretary of Commerce Gina Raimondo stated that the IIJA does not permit NTIA’s guidance to require states to engage in back-door rate setting.  Montana policymakers should follow the law rather than the guidance so they can work with providers to expand broadband access effectively and efficiently to unserved communities.

The ConnectMT proposal also imposes a 1 Gbps symmetrical speed threshold for middle-income plans, implicitly preferencing expensive, hard-wired fiber-optic infrastructure and limiting the funding available for less-costly cable and wireless alternatives which are capable of providing up to 100/20 Mbps service and which may be better suited for deployment in the rural and mountainous regions of Montana.  State policymakers should abandon this bias for fiber-to-the-premises and instead pursue a technology and vendor neutral approach to ensure that households that wish to be connected have internet access available and ready to serve them.

With changes to the ConnectMT draft proposal that would eliminate these investment-killing provisions, Montana’s broadband market can continue to include the technologies and price points that will enable all Montanans to have access to affordable, high-speed broadband.