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Priorities Podcast
New Mexico's timely broadband subsidy program
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New Mexico's timely broadband subsidy program by …
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- [00:02]
A
Welcome to State Scoop's Priorities podcast. I'm Keely Quindlen, a reporter with State Scoop. This week I interviewed Christopher Mitchell, the Director of Community Broadband Networks at the Institute for Local Self Reliance, to discuss New Mexico's recent effort to create a state run stand in for the Affordable connectivity program, the FCC's now expired federal broadband subsidy program. We talk about the New Mexico program and what it entails, affordability versus access, and whether state programs like this are just a stop gap until federal policy returns or if we are entering a new era in which states play a larger role in broadband affordability. But first, here's what's happening in state and local government technology news this week a federal child welfare initiative aimed at increasing foster home capacity is beginning to take shape. Oklahoma, Missouri, Louisiana and Tennessee have joined the A Home for Every Child initiative, which aims to update IT systems and connect more families with government services. The National Telecommunications and Information Administration has announced it will delay the release of guidance on how states can spend the remaining non deployment funds that were allocated through the 42.45 billion broadband equity access and Deployment Program, or B. Ariel Roth, the NTIA's administrator, said the agency will first sort through an extraordinary level of interest and feedback. Organizers at the center for Internet Security have told state and local governments that they should expect a wave of low level cyber acting activity following attacks by the US And Israel on Iran. These, they said, will likely include distributed denial of service attacks and website defacements. The Federal Affordable connectivity program, or ACP, ended in 2024 and the reason it was not renewed is because Congress did not approve additional funding to continue the subsidy after its original appropriation ran out despite bipartisan proposals to extend it. New Mexico, with its rural geography and Wild west expanses, has faced a number number of unique challenges to expanding Internet access, but it also faces widespread affordability issues as many households have lower incomes and especially in those rural areas, Internet service is more expensive relative to what people can afford, making monthly broadband costs a significant barrier to adoption. I discuss all of that with the ILSR's Christopher Mitchell. But for listeners who may not have followed the recent back and forth on broadband policy that closely, we start with dissecting the role the ACP played in broadband affordability and what happened when it disappeared.
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B
Well, I think I could start with where probably everyone agrees, which is Internet access is super essential for families. Unfortunately, millions of Americans and millions of families, millions of people within those families aren't able to access the Internet. And the number one reason that most people believe that's limiting that access is too costly, it costs too much. And in many places the cost for a good Internet connection is going to be on the order of 70, 80 or 90 doll a month. And there are some programs that are temporary or you might get a deal, but in the long term, Internet access is pretty pricey. So the Affordable Connectivity Program basically created a subsidy fund that guaranteed ISPs would get $30 a month for qualifying subscribers. And that's important because one of the challenges of serving low income subscribers is just that they may not have the ability to pay every month. And so a guaranteed payment of $30 a month actually does more than you might think. To help ISPs offer the high quality service to lower income families, I want
- [03:45]
A
to turn to what we're talking about here today is that New Mexico recently announced that it's created what's being described as the first state broadband affordability program. Right. As a kind of stand in for what the ACP left behind. What exactly does this entail and can you walk us through how it works? Who qualifies, how much support do households receive under this program and how do people access subsidy?
- [04:11]
B
I think some of that is still being worked out, but the legislature moved rapidly to create this program in New Mexico. And I would just pause to note New Mexico has been really good on Internet access. It has a higher challenge than most states. It has more people that are in higher cost areas than many states. But it's been aggressive in trying to deal with this. And so it isn't too much of a surprise that New Mexico has led this affordability program. But it mirrors the ACP, the Affordable Connectivity Program, in that families will get $30 a month. They're estimating that when this program is fully operational, it'll cost the state about $45 million and it will support about 173,000 families. However, it's not an appropriation from the state. It's being the program is run through a Universal Service Fund program. Many states have a program like this and are tacking on an additional fee to the bills of many of the people that pay for telecommunications cost across the state. I think It'll cost about $2 a month to most families who are already paying like 50 cents a month. So there will be a price increase, but then that will allow a whole heck of a lot of families to get, you know, $30 a month Internet access and just once again to hit on something that often isn't talked about is that I think this will be terrific. For the smaller ISPs, where they'll have a guaranteed revenue source to serve people they to serve. But it's a pretty big challenge to. To meet their needs.
- [05:44]
A
Absolutely. And I want to talk about, like, New Mexico specifically. Right. You kind of drilled down on that point that there's a lot of folks across New Mexico. It's, you know, very rural in some parts of the state that, you know, struggle with access just by way of infrastructure. Right. But we've also got that compounded with affordability issues as well. So can you talk a little bit about the unique challenge in New Mexico as far as this, like, dichotomy of affordability versus access?
- [06:11]
B
Yes. So New Mexico has a lot of people that live outside Albuquerque and Santa Fe, Las Cruces, the major population centers. And those homes cost a lot to connect because they're often farther out, away from their neighbors. And so you can imagine that in a city, if you build fiber for like a linear mile, which is to say you have a mile of fiber, you're going to connect, I don't know, 50, 100 households, you know, in New Mexico, you might connect one in a lot of parts of the state. And so that's a lot of cost and not a lot of revenue coming in. It also has a lot of pueblos, which are Native Indian tribes, and several of them are actually building their own ISPs right now. We've worked with some of them and in some of the work that we do at the Institute for Local Self Reliance and also in the tribal broadband boot camps. And so we've gotten kind of a window into that where there's a high cost, not only of connecting people that live on the reservation, but then also making that connection from the reservation back to Albuquerque or Santa Fe, where you can get on the wider Internet. Now, fortunately, a lot of that work has already been done. There's still some gaps to be filled, but New Mexico has done a good job of that. So New Mexico is basically a western state. And, you know, you wouldn't believe it unless you really look at the map, but Iowa is comparatively dense to almost everything that is west of it. You know, Iowa is a rural state, but there's a lot of people packed into those rural counties in New Mexico, like many western states, you have very few people that are in those counties. And so connecting them is quite difficult. You know, I'll say that for some of them, starlink is probably the best answer. Where you're extremely remote, where the cost of connecting a home might be A hundred thousand dollars. That is probably excessive cost. I say probably in my mind is definitely. But other people might argue and, but you know, for other homes that are 12,000, $15,000 to connect, you can imagine if you, even if you get a significant subsidy, serving that home is challenging because if something goes wrong, you have to send a technician out there. They might be driving an hour out of the office to go out there and they're only going to be able to deal with two people per day and you have to pay that technician's salary and healthcare and the equipment costs and the wear and tear on the vehicle. So just operating in those conditions is also more expensive.
- [08:31]
A
Yeah, totally. I think when we talk about broadband across the country, Right. It's really important to like focus down to these like state, local, tribal levels because the makeup, you know, as you've mentioned, is like so important to all of these cost considerations. And I want to go back to, you know, what you mentioned as far as this being a USF funded program, you know, ultimately. Right. That comes from Telcom surcharges. But what are the pros and challenges maybe of modeling a broadband subsidy program off of this fund as opposed to maybe, you know, like you mentioned, like congressional appropriations, for example.
- [09:08]
B
We think it'll be more stable to have a program like this because if there's a downturn in the economy, the state won't have to be deciding between programs, you know, like social programs that are feeding people and creating this subsidy program or maintaining the subsidy program. This program will just run, you know, sort of by itself. And the cost, I think, is quite reasonable, $2 a month. The danger would come from these programs if there's kind of like increasing constantly where people might not pay attention and the cost would balloon. But I don't think we're anticipating that in this circumstance. And so we really like programs that are for essential services to not be threatened when there's a downturn in part because that's when these families might need those services the most. And so, you know, we, and so it actually can really help to make sure that people are able to maintain Internet access in the event of a downturn because this program is, is contained, is a reasonable cost to everyone living in New Mexico and doesn't depend on the politics of the state. You know, the other thing I'll mention is just that we've seen in, in the United states Congress in D.C. that there's a lot of popularity for the Affordable Connectivity Program, but politics didn't allow them to continue that program. And so this is a program that will continue to exist hopefully outside of politics and just be focused on people's essential services of Internet access in this case.
- [10:37]
A
Yeah, absolutely. And you know, you mentioned a few questions back that there are, you know, a handful of other states that have similar programs. Right. Such as like requiring Internet service providers to offer a low cost option. How does New Mexico's model compare to say some of these, which, you know, is directed towards the ISP instead.
- [11:00]
B
Right. The main program that we think about is in New York where prior to the pandemic, New York, the state of New York had imposed a requirement that Internet service providers would have to offer a $15 a month plan. And there's some complication. They could do a $20 faster, but essentially a $15 a month plan for qualified users and they would have to advertise it and they'd have to make sure people were aware of it and things like that. The courts took some time to review it and ultimately every court that reviewed it said that this was constitutional, there was no problem with it. And so New York implemented it a few years ago. Other states have been, I don't think any other states have yet passed it. California came close and then was kind of scared off by the federal government saying under Donald Trump saying, we don't want you to do this and we'll punish you if you do so. So New York is the main one and I would say that the results are promising, but yet not terrific. Yet the state, from our talking to people there, there's a lot of people who aren't aware of the program. I think some of the Internet service providers aren't doing a great job advertising it. There is an exemption which is very important for me at the Institute for Local Self Reliance, we think there should be a mandate for low cost service from the largest companies because the impact on their finances is negligible. A study in California found that it would basically not touch the revenues of like AT&T or Comcast. And so whereas a small provider, if you have 2,000 subscribers or 5,000, even 10,000 subscribers, if suddenly 10% of your of your subscribers are qualifying for this lower rate, it could significantly hurt your ability to do business because you're not able to cross subsidize across the wealthier households and things like that. And so one of the things I like about the New Mexico program is that it is very friendly to smaller Internet service providers who we hope will gain scale and be able to over time, you know, have more aggressive programs to help Low income families. But as they are building that scale, as they're getting up the learning curve, they're not stuck trying to make the business work, you know, by serving low income families. The thing that we want to avoid, we really don't want to have a situation in which a government program discourages people from building a network past low income neighborhoods. Right. And so we want to make sure that we're careful about encouraging people to serve those areas with high quality networks and then be able to also make sure that people there are able to subscribe to those services.
- [13:39]
A
Yeah, yeah, totally. As far as like, you know, the impact of these programs go on digital inclusion and digital equity. You know, one of the main talking points, especially under, you know, former President Joe Biden's administration that we were hearing about the effort to expand access, right. Was to bolster access to services like telehealth and remote work and distance learning. Right from the event we have Covid 2.0 or something. From your perspective, where are the major benefits for like maybe folks in New Mexico or the biggest, like social or economic impact?
- [14:15]
B
I think the most important impact will be incredibly difficult to measure and that is education, where you'll have a lot of families able to make sure that their, their kids, but also adults in the home are able to take advantage of this amazing Internet. You know, the Internet, we think immediately of Netflix and entertainment stuff, but the Internet allows us to do a lot of things. And as the parent of a 10 year old, you know, just being able to answer questions and go out and learn about things is remarkable. Rather than saying we'll keep that in mind for on Wednesday when we go to the library. Right. Which is how it worked in my day. So we can, we can encourage that right away. We don't know what the impact of that will be in 10 years. You could do a study, but it's very hard to figure out what is the impact of this program. I think that alone would justify $45 million of program per year. But then you add in telehealth, where you have any number of families, right. I mean, there's a lot of veterans that served in the military or served the country in other ways who are in New Mexico, who may be locked out of because of their economic circumstances, they may not be able to afford connections serving them. Making sure that they can be well connected is important. Making sure they can access the VA and those benefits, making sure that Medicare recipients and Medicaid recipients are able to use telehealth to avoid having to potentially Be readmitted. That's where you save a lot of money because people don't want to go back to the hospital, you know, like. And so if people can stay on top of their care more through remote visits, and this is especially true for people living outside of the population centers to make sure they have decent Internet connections to be able to stay on top of their medical care means that for when the public is covering that care, whether that person has served in the military or whether they're, you know, an elderly person or whether they just have bad economic circumstances, we want them to be as healthy as possible. And making sure they have Internet in the home is a really important step in that direction.
- [16:18]
A
Yeah, absolutely. As far as like other states potentially replicating this, right? Like, say we've got a state or local leader who's listening to this and they're like, oh my gosh, that would be so great in our state, you know, I think we have the right conditions. What would you say to them as like, like lessons learned or like, you should do this, but maybe don't do that? Like, what would your recommendations be?
- [16:40]
B
You know, Yes, I would definitely recommend that there be a program like this to ensure that there is a reasonable assessment. Everybody who pays telecommunications costs, and I'm not going to get into like the intrastate versus interstate and all that. I'm, I'm not a lawyer and I struggle with some of that stuff. But there should be a reasonable fee attached to telecommunications bills that then is used to subsidize these high quality services. This program should be something that gives the Internet service companies a sense that, that they will get paid, that there's a fairly easy process for doing that. Because if you're, I mean, we've worked with the Pueblo of Ha Famous in New Mexico and they don't have a lot of capacity to like hire a lawyer and figure out how to do this accounting stuff. You know, they want to keep it pretty easy. The ACP was, was fairly good at that. And once you got the hang of it, then it was a predictable income stream. That's important for making sure that you have participation from the Internet service providers. But one of the things that I think is important is to understand that this is not a cure all. It's. It will be a problem if we just figure out how to throw money at Internet service providers without resolving the lack of competition that we see in the market. I think that for a lot of families, 70, 80, 90amonth for Internet service, even if you can afford it, that is a lot. It is more than people often pay in other countries. And we should be figuring out how to use public policy to drive those costs down. Even as we recognize that pure market competition is not going to be enough for the bottom 10% or 15% of families. So I think it's important that this be a part of a larger strategy to not just subsidize the low income families, but make sure that the Internet access market, and we have decided nationally that it's a market, we need multiple providers, that we have to have policies that actually encourage people to have real choices so that we have competition in a dynamic market.
- [18:41]
A
Yeah. And then kind of expanding or I guess looking forward on that larger strategy that you just noted. Do you think state programs like this are a stopgap until we've got some sort of return of guiding federal policy or a federal program? Or are we entering a new era where in which states are really driving this effort and are setting out these goals for themselves?
- [19:03]
B
I don't know that we can predict when the federal government will take this seriously. I started 19 years ago in telecommunications and, and at that time people were talking about how at some point we needed to reform the Universal Service Program, the federal program. And you know, it hasn't happened and people are saying, well, now it's really important that we reform it. But, and I'm not going to say that I would put a lot of money on it not being touched in the next four or five years, but that's probably the safest bet is that Congress is not going to take this seriously. I feel like local politics is stepping up to solve more and more problems. I don't know that that's necessarily a bad thing, but I do think there's a Vacuum in Washington D.C. both of a lack of leadership, but also of these big monopolies and the power that they have there to set the agenda. You know, I think we need to reform telecommunications laws, but I'm deeply concerned about doing it in an era when the biggest cable and telephone companies have so much power, when both parties, but particularly the Republicans, are so, you know, wed to their ide is where I'd say most Republicans and too many Democrats see the world through how Comcast or AT&T and Verizon see the world. And they don't see it through the eyes of a family that's trying to figure out how to make ends meet, to make sure their children have a real shot at education, to make sure that the family has an opportunity to like take advantage of the Internet or even to like, you know, the people that aren't on the Internet, where there's still millions of people for whom they don't have devices, they don't have a sense of how to use the Internet safely, and there are fraudsters targeting them constantly. These are all problems that will not be solved unless some level of community, whether that is local government, in some cases church groups. I mean, there's community groups that try to help out. But it's hard to imagine the federal government stepping up right now with with the exception of, of course, the federal government did just pass the Digital Equity Act. The Trump administration canceled it in using a process that seems to me unlikely to be found to be constitutional. And so that money may come back and the federal government may be able to in a few years, when those court cases work their way through, we might see more of an investment from the federal government. But it's hard to imagine this group of people in D.C. prioritizing telecommunications and then coming to a good compromise. So I feel like the states really need to take more responsibility and local governments also have to, both internally, but also working with others throughout the state to find something that will work for high density and low density areas.
- [21:47]
A
That was Christopher Mitchell with the ilsr. We are sending our many thanks to him and his organization for participating in that conversation. You can subscribe to the priorities podcast@priorities podcast.com and wherever you get your podcast while you're there, be sure to leave a review or a rating on the podcast page. That small extra step helps more people like you find the show. This podcast is a production of Scoop News group in Washington, D.C. production work is done by Adam Butler and Carlin Fisher. And until next week, I'm Keely Quinlan. Thanks for listening.