Ted Cruz wants to overhaul $42B broadband program, nix low-cost requirement

Emboldened by Donald Trump's election win, Republicans are seeking big changes to a $42.45 billion broadband deployment program. Their plan could delay distribution of government funding and remove or relax a requirement that ISPs accepting subsidies must offer low-cost Internet plans.

US Senator Ted Cruz (R-Texas) today issued a press release titled, "Sen. Cruz Warns Biden-Harris NTIA: Big Changes Ahead for Multi-Billion-Dollar Broadband Boondoggle." Cruz, who will soon be chair of the Senate Commerce Committee, is angry about how the National Telecommunications and Information Administration has implemented the Broadband Equity, Access, and Deployment (BEAD) program that was created by Congress in November 2021.

The NTIA announced this week that it has approved the funding plans submitted by all 50 states, the District of Columbia, and five US territories, which are slated to receive federal money and dole it out to broadband providers for network expansions. Texas was the last state to gain approval in what the NTIA called "a major milestone on the road to connecting everyone in America to affordable, reliable high-speed Internet service."

Republicans including Cruz and incoming Federal Communications Commission Chairman Brendan Carr have criticized the NTIA for not distributing the money faster. But Cruz's promise of a revamp creates uncertainty about the distribution of funds. Cruz sent a letter yesterday to NTIA Administrator Alan Davidson in which he asked the agency to halt the program rollout until Trump takes over. Cruz also accused the NTIA of "technology bias" because the agency decided that fiber networks should be prioritized over other types of technology.

Cruz: Stop what you’re doing

"It is incumbent on you to bear these upcoming changes in mind during this transition term," Cruz wrote. "I therefore urge the NTIA to pause unlawful, extraneous BEAD activities and avoid locking states into in [sic] any final actions until you provide a detailed, transparent response to my original inquiry and take immediate, measurable steps to address these issues."

An NTIA spokesperson told Ars today that the agency received Cruz's letter and is reviewing it. The NTIA's update on the BEAD program earlier this week said the state approvals show that "all 56 states and territories are taking the next steps to request access to their allocated BEAD funding and select the providers who will build and upgrade the high-speed Internet networks of the future."

Cruz's letter alleged that the agency "repeatedly ignored the text of the Infrastructure Investment and Jobs Act" when designing the BEAD program. "This past August, I sent you an inquiry regarding NTIA's decision to hoard nearly $1 billion in BEAD funding to build a central planning bureaucracy that proceeded to impose extraneous mandates on the states and prevent the expeditious delivery of Internet access to unserved communities," Cruz wrote. "Instead of working to reverse course on the botched BEAD program, your agency responded by doubling down on its extralegal requirements and evading congressional inquiries."

Cruz said he "will monitor this matter" as Commerce Committee chairman. "Fortunately, as President-elect Trump has already signaled, substantial changes are on the horizon for this program," Cruz wrote. "With anticipated new leadership at both NTIA and in Congress, the BEAD program will soon be 'unburdened by what has been' and states will no longer be subject to the unlawful and onerous bureaucratic obstacles imposed by the Biden-Harris NTIA."

GOP mad about low-cost plan rule

As we wrote in July, Republicans are angry at the NTIA over its enforcement of the requirement that subsidized ISPs offer a low-cost plan. The NTIA countered that it followed the law written by Congress. The US law that ordered NTIA to stand up the program requires that Internet providers receiving federal funds offer at least one "low-cost broadband service option for eligible subscribers."

The law also says the NTIA may not "regulate the rates charged for broadband service," and Republicans claim the NTIA is violating this restriction. A July 23 letter sent by over 30 broadband industry trade groups also alleged that the administration is illegally regulating broadband prices. ISPs pointed to NTIA guidance that "strongly encouraged" states to set a fixed rate of $30 per month for the low-cost service option.

"The statute requires that there be a low-cost service option," Davidson reportedly said at a congressional hearing in May. "We do not believe the states are regulating rates here. We believe that this is a condition to get a federal grant. Nobody's requiring a service provider to follow these rates, people do not have to participate in the program."

With Republicans gaining full control of Congress, they could amend the law to require changes. The Trump administration could also make changes on its own after new leadership at the NTIA is in place.

Cruz's letter referenced plans to eliminate the "rate regulation" and other requirements set by the Biden administration. That includes what Cruz called "extreme technology bias" in reference to the NTIA's preference for fiber broadband projects instead of other kinds of networks like cable, wireless, or satellite.

Cruz wrote:

Congress will review the BEAD program early next year, with specific attention to NTIA's extreme technology bias in defining "priority broadband projects" and "reliable broadband service"; imposition of statutorily-prohibited rate regulation; unionized workforce and DEI labor requirements; climate change assessments; excessive per-location costs; and other central planning mandates. In turn, states will be able to expand connectivity on terms that meet the real needs of their communities, without irrelevant requirements that tie up resources, create confusion, and slow deployment.

Cruz alleges “race-based discrimination”

While the FCC is not administering the BEAD program, Carr took aim at it today in a post on X. "VP Harris led the $42 billion program for expanding Internet infrastructure into a thicket of red tape and saddled it with progressive policy goals that have nothing to do with quickly connecting Americans," Carr wrote.

Cruz separately sent another letter to the NTIA yesterday criticizing its plan for distributing $1.25 billion from the Digital Equity Competitive Grant Program. Cruz claimed that the NTIA's consideration of race when issuing grants violates the Fifth Amendment, writing that the "federal government is forbidden from engaging in impermissible race-based discrimination under the equal protection component of the Fifth Amendment's Due Process Clause."

The nonprofit Benton Institute for Broadband & Society urged the NTIA to stay the course. In a press release, the Benton Institute said the NTIA is following the law:

The primary problem that Senator Cruz identifies in his letter is that the NTIA's notice of funding opportunity incorporates "covered populations" language which includes "individuals who are members of a racial or ethnic minority group." But it was Congress, in its wisdom, that defined the covered populations the Digital Equity Act programs are designed to address—including "individuals who are members of a racial or ethnic minority group." In fact, the law goes further to define covered populations to include low-income people, seniors, veterans, people with disabilities, and rural Americans (among others) and outlines the critical steps that NTIA must follow to advance digital literacy and improve internet adoption.

It's the law—and NTIA is merely following the law as Congress intended.