Maryland Broadband Policy Should Help Low-Income Consumers, Not Regulate Rates

The proposed “Maryland Broadband Opportunity and Fairness Act” would regulate the broadband prices charged to low-income households in the name of affordability. But this legislation would ultimately hurt the very families it purports to help. Instead, Maryland should provide consumer-focused affordability support that enables low-income households to get and stay connected.

The centerpiece of the Maryland bill, empowering the state to set maximum broadband prices for low-income households, will have unintended consequences. Pushing down prices by law seems like a simple solution, but it would necessarily reduce the return-on-investment for providing and expanding broadband for low-income Marylanders. Making low-income families a bad investment may get lower prices in the short term, but it comes at the cost of leaving them behind in the long term.

Moreover, prices are only one side of the affordability equation. A very high price might still be affordable for rich Marylanders while even a very low price might be out of reach for the lowest income households. The proposed legislation doesn’t define what “low-cost” means, but inevitably, any price will be too high for the lowest income households to afford, and those are the households most in need of affordability support.

In short, the Maryland bill would be an anti-consumer double whammy: it would both turn low-income households into bad broadband investments and leave affordability challenges unsolved for those who need help most.

The bill’s exceptions also highlight its poor fit for ensuring universal broadband affordability. It would exempt small ISPs from providing low-cost service, but that’s nonsensical if legislators really believe in regulating rates is the right way to help low-income Marylanders. Why are customers of small ISPs any less deserving of affordable broadband? It’s consumers who face affordability challenges, so as long as the bill sidelines them in favor of ISP rate regulation, it will inevitably miss the mark.

There’s a better broadband affordability policy that addresses both shortcomings: consumer focused vouchers that give low-income households the ability to pay for market-rate service. Maryland could give low-income households up to $30 per month to spend on broadband of their choice. This approach puts consumers in the driver’s seat by attracting ISP investment, rather than discouraging it, while also making ISPs compete to provide a service consumers find worth their voucher. To fund this program, Maryland could appropriate new funds or use some of the roughly $190 million in leftover funds from the federal Broadband Equity Access and Deployment program.

Maryland can enact broadband affordability policies that help families most in need of support without leaving them behind in the long run. Maryland should abandon broadband rate regulation and empower low-income families to attain the benefits of high-quality broadband.