State broadband officials and rural providers told a New Mexico Senate committee on Aug. 14 that the state should consider a permanent affordability subsidy to replace the federal Affordable Connectivity Program (ACP), which Congress allowed to lapse in April 2024.

Jeff Lopez, director of the New Mexico Office of Broadband Access and Expansion, told the Senate Technology and Telecommunications Committee that ACP, enacted under the Infrastructure Investment and Jobs Act, provided a $30 monthly subsidy for most households and $75 for tribal households and that the program was widely used in New Mexico. "The funds expired in April," Lopez said, adding that the state’s infrastructure effort (BEAD) will address unserved and underserved households but does not guarantee ongoing operation subsidies.

Why it matters: when ACP funding ended, tens of thousands of households lost predictable monthly support that many used to pay for mobile or fixed broadband. Lopez said in the program’s last funded month 184,131 New Mexico households participated — roughly 42.7 percent of an estimated 431,000 eligible households — representing about $5.6 million in monthly payments to providers in April and roughly $67 million annualized.

Lopez outlined the federal context: long‑standing Lifeline support ($9.25 per month, $25 for tribal lands) remains but is far lower than ACP and is undersubscribed (about 56,000 Lifeline participants out of 334,000 eligible in New Mexico, a 17 percent take rate). He also said the state’s BEAD infrastructure program is advancing and that he will return in October with more details and implementation plans.

Representatives from Smith Bagley Inc., a rural mobile operator doing business as Cellular 1, described how ACP supported mobile usage in remote communities. "At our peak, we had 13,000 customers on the ACP program. At that time, the average usage of those customers was over 20 gigabits each," Judd Hinkle, Smith Bagley’s CEO, said. Hinkle and Guy Turley, the company’s chief operating officer, urged the committee to preserve mobile affordability and to design a state program that is administrable for small carriers.

Smith Bagley proposed a state subsidy administered to eligible telecommunications carriers (ETCs) that would top up Lifeline or function similarly to ACP. The company estimated a program targeted to existing Lifeline customers could cost about $12 million a year if set at about $15 per month for non‑tribal households and $25 per month for tribal households; that level, the company said, could support a "livable broadband" offering of roughly 20 GB per month for mobile customers. Smith Bagley recommended limiting early participation to ETCs because ETCs already undergo federal vetting and audits.

Lopez and committee members emphasized tradeoffs and next steps. Lopez said the Office of Broadband did not present a formal recommendation at the hearing but supported the concept of a state affordability program and flagged uncertainties: the federal Digital Equity Act grant had been canceled for the state that year and ACP lapse exposed the need for predictable operating subsidies if capital‑build programs (BEAD) are to be sustainable.

Committee members asked about price variability across New Mexico and oversight of provider rates; Lopez said there is no statewide broadband price regulation and that rates vary by competition and technology. Lawmakers also discussed BEAD’s role in funding infrastructure and noted that a state affordability program could be reevaluated if Congress restores ACP or if federal universal‑service reform proceeds.

Next steps: providers and the Office of Broadband suggested convening a broader stakeholder group to refine a program design and estimates; Lopez said he would return with BEAD updates in October. The committee did not take formal action on a state subsidy at the hearing.

Taper: The hearing highlighted that infrastructure funding and affordability are distinct challenges: state and federal capital can build networks, but low‑income households and smaller providers need predictable operating subsidies to keep service affordable and sustainable.