Paul Winfree, president and CEO of the Economic Policy Innovation Center, an economic policy think tank, testified that the ACP monthly subsidies have led to increased costs for everyday consumers, as Internet service providers simply raise their rates to capture as much of the subsidy as possible. “Deregulation and competition have reduced [broadband] prices,” Winfree told the subcommittee, arguing for a more free market approach. “We have also learned that policies that subsidize demand, such as the Affordable Connectivity Program, tend to increase prices.”
But Jon Tester, a Democratic Senator from Montana, pushed back on this theory, saying broadband is not like groceries or other consumer goods where more supply brings down prices. “It is so damn expensive to lay broadband,” Tester remarked. “It’s just a different marketplace that somehow holds the consumer at a disadvantage.”
https://www.govtech.com/network/feds-discuss-acp-but-no-path-forward-emerges-from-hearing
Some distinguishing terminology needed here. Broadband is indeed marketed as a commodity service and sold by the bandwidth tier, even including federally mandated "nutrition labels." That's what's driving the calls for extending subsidies to low income households.
What Sen. Tester is referring to is the capital and operating costs of advanced telecommunications infrastructure to deliver broadband services. All service providers need to cover those costs. Investor owned providers also need to price in profits and income taxes. Those are passed on to end users and can make service for lower income households difficult to balance tight household budgets. The ACP is essentially a means tested couponing program that supports the higher cost of investor owned delivery infrastructure.
Publicly owned infrastructure doesn't need profits nor is it subject to income taxation, providing a lower the cost bridge solution rather than raising the affordability river in the form of household subsidies.
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