As Federal Priorities Shift, States Boost Broadband Affordability
States are pursuing 2 distinct strategies to bring high-speed internet within reach
With uses from smart appliances to precision farming, the internet is increasingly woven into daily life—yet millions of Americans still lack access to high-speed service. While creating more network connections is key to expanding broadband availability, cost also remains a significant barrier: Pew Research Center has consistently found that households with lower incomes subscribe to home broadband service at lower rates than households with higher incomes do. While federal broadband programs have sought to address both infrastructure and affordability, shifting federal priorities have resulted in fewer resources to help bring service within economic reach.
Some state legislatures have started to address access gaps by working with their state broadband offices and industry partners to create broadband affordability programs. Initiatives enacted so far generally follow one of two approaches: requiring low-cost offerings or modifying user fee systems. While the two strategies have different advantages depending on state market conditions and policy preferences, both increase support for consumers and help to address federal uncertainty.
A changing federal landscape
In recent years, two key federal programs aimed at improving broadband availability and affordability have either expired or been dramatically altered. The Affordable Connectivity Program (ACP) and the Broadband Equity, Access, and Deployment (BEAD) program both were established as part of the 2021 Infrastructure Investment and Jobs Act to address immediate and longer-term challenges to closing the digital divide. The ACP provided qualifying low-income households with a monthly subsidy for broadband subscriptions. Initial reports showed that the ACP was effective in increasing and sustaining subscription rates, but the program was ultimately a temporary response and expired in 2024 despite efforts to extend its funding.
The BEAD program awards grants to states to help pay the construction costs associated with broadband expansion, primarily in rural parts of the country, where those costs are particularly high. The BEAD program originally included provisions to promote affordability for BEAD-funded networks, but the National Telecommunications and Information Administration altered the parameters of the program in June 2025. BEAD-funded providers still must offer low-cost plans, but at prices they set themselves, and states no longer may establish the terms of those plans.
The Federal Communications Commission (FCC) has a long-standing telecommunications subsidy program—the Universal Service Fund—which is paid for by mandatory telephone service fees. Under the fund’s Lifeline subsidy program for low-income households, eligible recipients of the standard benefit currently receive up to $9.25 per month. But on average, a broadband subscription plan costs $98.49 per month. The standard benefit amount has not increased since 2012, and reforming the contribution base requires congressional action—efforts that so far have stalled.
“We are at a point where we’re now sort of back to pre-COVID investments in household affordability for broadband,” said Olivia Wein, a senior attorney at the National Consumer Law Center, adding that the “incredibly modest” monthly subsidy “is not enough to do its job.”
As federal priorities evolve, state legislatures are taking the lead on broadband affordability. The two main approaches employed to date affect state budgets differently by shifting costs to different payers.
Requiring low-cost offerings
Some states have required that internet service providers offer low-cost options for basic service. Connecticut lawmakers in 2025 created the Net Equality Program, which, beginning Oct. 1, 2026, requires internet providers that do business with state agencies to offer eligible households a plan that costs no more than $40 per month and that provides download speeds of at least 100 megabits per second (Mbps), consistent with the download speed standard set by the FCC in 2024. Similarly, New York’s Affordable Broadband Act—enacted in 2021 and in effect since January 2025—requires large providers to offer qualifying households one of two tiers of service: $15 per month for download speeds of at least 25 Mbps, or $20 per month for speeds of at least 200 Mbps. The law applies to fixed broadband networks in the state, although internet providers serving no more than 20,000 households may be exempted.
For consumers, affordability programs like these may be easier to access than state subsidies that require households to enroll. “The strength of that is that you don’t have to apply for a program; you, as a consumer, just go out in the marketplace and can choose to pick it or not,” said Wein. “That reduces the administrative burden on a household to fill out a form or to apply and then to continually recertify.”
For states, low-cost plan mandates don’t require new revenue or subsidies. Providers absorb the cost of the discounted plans as part of operating in the state or doing business with it. But in states where population centers are smaller and more dispersed, state-mandated pricing might not make sense.
Jeffrey Lopez, director of New Mexico’s Office of Broadband Access and Expansion, said he is concerned that such mandates could limit the financial viability of small and rural providers. “In New Mexico, if you regulate a low-cost option that’s $30 or lower, that is going to put a lot of [internet service providers] out of the market,” he said. “There are rural providers that cannot support that.”
Modifying user fee systems
Many states operate a state-level complement to the FCC’s Lifeline program, funding the supplement through a surcharge on telecommunications carriers that providers often pass on to consumers. Federal and state Lifeline programs were originally established to help low-income households pay their phone bills, but as the federal government did in 2016, some states are now expanding their programs’ eligible uses to include broadband subscriptions.
Two states—Oregon and New Mexico—are turning to user fees to fund new or expanded affordability programs.
In 2025, Oregon reformed its Lifeline program and enabled the state regulator to raise the monthly internet stipend. The Public Utility Commission then increased the benefit to a total of $24.25 per month for qualifying subscribers, or $49.25 for those on Tribal lands, when combined with federal Lifeline subsidies. The benefit increase is expected to account for $490,660 of the bill’s $2 million 2025-27 biennium cost.
A year later, New Mexico created a new Low-Income Telecommunications Assistance Program aimed at replacing the expired ACP and set to begin enrollment in late 2026. It also taps state user fees and will offer direct subsidies for broadband subscriptions capped at $30 per month for eligible households and $70 per month for those on Tribal lands. New Mexico’s Legislature has authorized the use of up to $10 million in existing funds from the state’s Rural Universal Service Fund to help the Public Regulation Commission implement the new subsidies and has also granted authority to draw up to $45 million a year from the fund after the first year.
Relying on an existing program and fees on providers, rather than on new allocations from the state’s general fund, “definitely made the debate easier in many ways,” said Lopez. “Legislators weren’t looking to make cuts elsewhere or deprioritize other initiatives.” This method also offers the benefit of funding stability. “You can sort of predict the size of funding coming in and manage it,” Wein said, “as opposed to being always ready to deal with a loss of funding.”
A downside of this approach is that enrollment and recertification in public assistance programs can create administrative burdens for consumers. Funding assistance programs with user fees and surcharges also means that costs for consumers may increase over time.
However, permanent, securely funded programs like those in Oregon and New Mexico also help households stay connected to their internet service plans. That stability can be an important consideration for internet providers, especially those expanding in new markets or operating in high-cost, low-density areas, noted Mitch Hibbard, chief strategy and external affairs officer at the Peñasco Valley Telephone Cooperative in New Mexico. If a broadband affordability program is “perpetually funded,” he said, “that’s going to give us some more stability too because we’re not going to lose the customer due to their inability to pay the monthly bill.”
Final thoughts
Affordability policy is one way that some states are beginning to resolve gaps left by shifting federal priorities and uncertainty. While the approaches in Connecticut and New York lean on providers, those in Oregon and New Mexico repurpose user fees. Any successful policy will factor in the needs, market conditions, and potential budget implications of a particular state.
Hibbard advised policymakers to consult a range of internet providers and consumer stakeholders as they consider options to address affordability. “Whoever’s going to lead the charge on this needs to get with their local providers,” he said, “even the smallest of the small [providers] that an area depends on.”
Sarah Ali is a senior associate and Lexi West is an officer with The Pew Charitable Trusts’ broadband access initiative.
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