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Connecting All Missourians to Affordable Broadband

Submitted on September 20, 2024
Benton Institute for Broadband & Society

Friday, September 20, 2024

Weekly Digest

Connecting All Missourians to Affordable Broadband

 You’re reading the Benton Institute for Broadband & Society’s Weekly Digest, a recap of the biggest (or most overlooked) broadband stories of the week. The digest is delivered via e-mail each Friday.

Round-Up for the Week of September 16-20, 2025

Grace Tepper
Tepper

 

In the creation of its Initial Proposals Volume 1 and  Volume 2 for Broadband Equity, Access and Deployment (BEAD) Program funding, the Missouri Office of Broadband and Development (OBD) laid out three goals:

  1. Infrastructure and Availability: Missouri will connect all Missourians to high-quality, affordable broadband irrespective of their location within Missouri.
  2. Sustainability: Missouri will build the ecosystem necessary to sustain those connections and ensure that connectivity in Missouri continues to improve beyond the lifetime of current broadband programming.
  3. Adoption and Impact: Missouri will reduce digital inequities and ensure all Missourians are able to take full advantage of the opportunities afforded to them by broadband expansion.

In its first goal, OBD recognizes the need for high-quality, affordable broadband for all residents in the state. According to the U.S. Census Bureau, there are over 687,000 Missouri households (28% of all households) with income less than $35,000 per year.​ Missouri's Digital Opportunity Plan further reports that cost is the primary reason why Missourians do not have broadband Internet access; OBD's digital equity survey finds that just under half of all respondents indicated that the Internet was too expensive (46%). Four out of ten respondents spent $75 or more per month on internet services (44%), but fewer low-income households paid this much (36%). Rural low-access households had the largest share of respondents paying $75 or more a month (59%), due to the need to purchase more costly satellite subscriptions for internet access.

Affordability is also reflected in the device ownership rates in Missouri, beyond the affordability of service itself. While 96 percent of survey respondents in Missouri reported having a smartphone, and 88 percent reported having a laptop or desktop computer, low-income households – defined here as households with less than $35,000 in income – and those with employment challenges had lower personal computer ownership levels (78% and 75%, respectively). Four in ten smartphone-only respondents had a household income below $35,000 (42%), compared to all Missouri households classified as low-income (28%).

The three least likely groups to buy internet services were households that were low-income (78%), lived in rural low-access areas – defined here as zip codes where less than half of served locations have at least 25/3 Mbps service – (82%), or were smartphone-only users (52%). Of those who did not purchase internet services, some smartphone-only and low-income households chose not to purchase services likely due to their financial situation (18% and 10%, respectively).

Low-income households were much less likely to work from home at least one day a week (26%) or to use the internet for online training (34%), compared to the survey average (48% and 44%, respectively). Two out of three respondents used the Internet to access government or health services, and slightly less than half used it for educational needs (48%). The use of these three services was between five to seven percentage points lower than the averages for all respondents.

​On average, low-income households were 10 percentage points more likely to have an interest in training or assistance than other survey respondents. Respondents were more likely to go to local government—including libraries and schools for assistance (35%) than other respondents (27%). Personal information security (81%), computer viruses (69%), and website tracking (66%) were the top three concerns for this population. Respondents were four to five percentage points more concerned than the average respondent with misleading information or surveillance.

Below, we take a look at how Missouri's BEAD Initial Proposals plan to ensure low-cost broadband service for all Missourians.

Missouri's Low-Cost Broadband Service Option for BEAD-Supported Networks

The Infrastructure Investment and Jobs Act and the BEAD Notice of Funding Opportunity (NOFO) require Missouri to define a low-cost option or options available to end users of BEAD networks that are eligible to participate in the Affordable Connectivity Program. This definition must “provide the exact cost of the low-cost broadband service option, or the state/territory derived formula based on objective economic data to be used.” This obligation continues over the life of the asset.

The household broadband survey conducted by the University of Missouri as part of the BEAD planning process asked Missourians without internet service to characterize their monthly willingness to pay within bands of possible prices. Seventeen percent of Missourians indicated in this category indicated a willingness to pay less than $10; the median respondent fell within the $25-$40 band. A $ 30-a-month standard would mean that the median ACP-eligible household in Missouri would pay roughly one percent of its income for broadband in the absence of ACP renewal. A threshold of two percent of monthly household income is sometimes used as a measure of broadband affordability; $30 represents less than 2 percent of the monthly income of four-fifths of ACP-eligible Missouri households.

Waivers

OBD understands that prescriptive pricing requirements pose a challenge for the business case of projects in expensive areas. A low-cost plan, at any price, will only be valuable to the extent viable BEAD projects are actually built. For this reason, OBD will allow BEAD program participants to request a waiver to charge above $30 for an otherwise compliant low-cost plan, provided that the cost of the plan, including waivers, may not exceed $70. This $70 figure broadly reflects OBD’s experience with its American Rescue Plan Act (ARPA)-funded broadband grants, where providers were asked to propose a low-cost broadband option as part of their submission. Only two awardees exceeded a $70 price, suggesting that (a) $70 is consistent with broadband expansion to extremely expensive areas and (b) the $70 ceiling would still exercise some restraint on the upper ranges of broadband costs.

Waivers will be evaluated based on submissions from BEAD applicants requesting a waiver and contextual information about the application area where the waiver is requested. OBD will require the BEAD applicant requesting a waiver to submit evidence including:

  • The projected revenue associated with the project assuming a $30 low-cost plan, including underlying assumptions, such as the number of eligible individuals who will subscribe to the low-cost plan at $30;
  • The projected revenue associated with the project assuming a low-cost plan set at the waiver price, including underlying assumptions, such as the number of eligible individuals who will subscribe to the low-cost plan at that higher price; and
  • The projected per-subscriber and overall costs of establishing and maintaining service for the application area.

A waiver may be granted, denied, or granted at a price lower than the initial request based on OBD’s evaluation of whether the waiver is necessary to secure a financially sustainable project for the area. Among other contextual factors, OBD may consider whether another, otherwise generally comparable project was submitted without a low-cost waiver for the application area in question.

The Low-Cost Service Option

Missouri's low-cost service option:

  • Costs $30 per month or less, inclusive of all taxes, fees, and charges with no additional non-recurring costs or fees to the consumer or no more than the subsidy available through ACP or successor programs, should that subsidy increase to greater than $30 a month OR costs greater than $30 per month but no more than a price approved by OBD that will be no more than $70 per month, provided OBD approves a waiver in the manner described above;
  • The price may be adjusted upward annually with notification to OBD by no more than the change in the Consumer Price Index (CPI), measured as by the annual average change in CPI published by the Bureau of Labor Statistics (BLS) for the most recently completed calendar year, starting after the award agreement between OBD and the applicant is signed (e.g., had an applicant signed an agreement for a BEAD award in 2023 they could have adjusted their low-cost plan upward by 4.1 percent after BLS published the annual average change in CPI in 2023 in January of 2024);
  • Allows the end user to apply the Affordable Connectivity Benefit subsidy to the service price;
  • Provides the greater of (a) typical download speeds of at least 100 Megabits per second (Mbps) and typical upload speeds of at least 20 Mbps, or the fastest speeds the infrastructure is capable of if less than 100 Mbps/20 Mbps or (b) the performance benchmark for fixed terrestrial broadband service established by the Federal Communications Commission pursuant to Section 706(b) of the Communications Act of 1934, as amended;
  • Provides typical latency measurements of no more than 100 milliseconds; 
  • Is not subject to data caps, surcharges, or usage-based throttling, and is subject only to the same acceptable use policies to which subscribers to all other broadband internet access service plans offered to home subscribers by the participating subgrantee must adhere; and
  • In the event the provider later offers a low-cost plan with higher speeds downstream and/or upstream, permits Eligible Subscribers that are subscribed to a low-cost broadband service option to upgrade to the new low-cost offering at no cost;

Subgrantees are required to participate in the Affordable Connectivity Program or any successor program, and Eligible Subscribers who are eligible for a broadband service subsidy can apply the subsidy to the proposed service option.

Subgrantees will also be required to post the terms of the low-cost option and any other pricing commitments made as part of the BEAD program and include the low-cost option alongside other pricing options in a transparent manner. Subgrantees should understand that OBD will also document and publicize pricing commitments associated with BEAD-funded networks.

Middle-Class Affordability Plans

Beyond the low-cost plan for eligible participants, OBD’s general mechanism for making affordable broadband available to middle-class families in BEAD-funded networks is the heavyweight assigned to the NTIA-mandated affordability metric (cost of 1 Gbps/1Gbps or 100/20 Mbps service) incorporated into the scoring of competitive BEAD proposals. This scoring incentivizes providers to offer lower prices while allowing trade-offs with other considerations, including the viability of the business case of the network in high-cost areas.

OBD will require providers to submit non-promotional pricing information for all packages offered on BEAD networks, not just 1 Gbps/1 Gbps plans. OBD will further promote affordability and accountability within the BEAD program by documenting pricing information and commitments associated with particular awards and awarded locations and providing tools members of the public can use to identify the commitments relevant to their addresses.

OBD further anticipates promoting affordability through its state implementation of the Digital Equity Act, including the State Digital Equity Capacity Grant Program, and any funds remaining for non-deployment uses after a project is identified for every BEAD-eligible location.

Affordability Scoring

Applicants will be required to disclose the non-promotional prices they will offer locations on BEAD-funded networks through the BEAD period of performance, inclusive of the cost of installation, equipment rental, and any other charges required to receive service. If different technologies will be deployed to different BEAD-eligible locations, pricing must be disclosed for all the technologies used, including the cost of 100/20 Mbps service for locations served by licensed fixed wireless and the cost of 1/1 Gbps service for locations served by fiber.

The BEAD NOFO requires that points be awarded in this category to the more affordable 1 Gbps/1 Gbps plan for Priority Broadband projects (that is, all-fiber networks) and 100/20 Mbps service for non-Priority Broadband projects (that is, using technologies other than fiber). The proposed formula allows for a mixture of fiber and non-fiber technologies in areas above the extremely high cost-per-location threshold by adjusting the scoring based on the proportion of technology used and the difference between the price of the reference service for the technology and the FCC Urban Rate Survey benchmark price for 1 Gbps/1Gbps service for fiber and 100/20 Mbps for the other technology. The FCC Urban Rate Survey benchmark price does not represent a hard ceiling on the price that can be charged for these plans, but applicants who charge at or above that level will receive 0 points on this metric.

This price commitment used to calculate this score for both competitive and non-competitive areas will apply for eight years following the completion of the project. Over the course of the period, this price may rise annually by no more than the annual increase in the Consumer Price Index, as calculated by the Bureau of Labor Statistics up to a maximum of three percent, beginning with an adjustment in the first new calendar year after the awarded proposal was submitted to OBD.

Realizing Missouri's Full Digital Potential

The Missouri Office of Broadband Development is primarily concerned with enabling citizens to utilize the full capacity of the Internet in order to enhance economic outcomes. As such, OBD strives every day to realize the vision of a Missouri where every citizen, regardless of their financial, geographic or demographic background, has access to the complete set of digital skills, technology, and resources necessary to realize their full potential within the digital economy.

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The Benton Institute for Broadband & Society is a non-profit organization dedicated to ensuring that all people in the U.S. have access to competitive, High-Performance Broadband regardless of where they live or who they are. We believe communication policy - rooted in the values of access, equity, and diversity - has the power to deliver new opportunities and strengthen communities.

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