New BEAD – Much Ado About Nothing

In my opinion, the BEAD grant program has been a rolling disaster since it was introduced. We saw how a good grant program works when the Capital Project Fund program operated by Treasury quickly dispersed infrastructure money and put it to use. Both programs were authorized around the same time, yet most of the projects funded by CPF are completed, or will be soon since a few projects got an extension until next June.

By contrast, BEAD construction has barely started. There are numerous reasons for BEAD delays, with the most recent delay when NTIA lost a year when it switched to the Benefit of the Bargain rules that drastically halved the funding awarded for infrastructure.

One of the original elements of the BEAD legislation was that money that wasn’t spent on infrastructure would be rolled into what the legislation termed non-deployment funds, which were intended to support broadband functions that supplemented and aided broadband. Many states expected to spend most or all of their BEAD funding on infrastructure, but after the Benefit of the Bargain, there is now over $21 billion of non-deployment. NTIA has been promising for the last year that it would issue guidance to states on when and how that funding can be used. NTIA held listening sessions earlier this year and asked for public input about how to best use the non-deployment funds.

To the surprise of nobody who has been following the BEAD trainwreck, NTIA pulled a fast one with the non-deployment funds. Rather than giving guidance on the $21 billion of non-deployment funds, NTIA has instead determined that some tiny portion of the non-deployment funds can now be used to build more infrastructure. That sounds really good on paper, because who’s not in favor of building more infrastructure?

As you might expect, because this is BEAD, the new grant process is complicated. First, NTIA is developing a list of eligible locations for the new funding. Some of these will come from ISPs that have already refused to accept the first round of BEAD. But it’s hard to think NTIA will find many other meaningful unserved locations. The agency has already claimed victory several times over the last year, saying that BEAD has basically solved the rural broadband gap – so NTIA doesn’t believe there are any pockets of locations that were missed by the original BEAD.

Once the list of locations is published, there is a tight time frame for states to deal with the new BEAD round. States will have 30 days to validate the locations. Next, each state would have to hold another quick map challenge process. As a reminder, the map change process was probably the most dysfunctional part of the original BEAD process – anybody who took part in the map challenges knows it was a disaster, end to end. After the map challenge, states have to submit their final locations to NTIA for approval, after which the states can hold a 90-day supplemental bidding round. I’m sure that NTIA will want to review tentative awards before they are made. States will then have to contract with grant recipients for the new awards. That likely means modifying existing BEAD lines of credit, and who knows what else. It’s hard to see this entire process playing out in less than a year, particularly since there are several steps that include an NTIA review and approval. It’s hard to see any of this new BEAD money being freed to ISPs until sometime into 2028.

All of this is a very convenient delaying tactic for NTIA, since it takes NTIA off the hook for providing guidance for the bulk of the non-deployment funds until the new infrastructure spending has been completely resolved through signing contracts with grant winners.

There is another little twist to consider in that infrastructure awards will be made at the average cost per location from the first round of BEAD. By definition, since all states have made awards for satellite broadband, the new BEAD average award will be lower than what was originally awarded for fiber. Add to this the fact that inflation has made it more expensive to deploy any terrestrial broadband technology, and I doubt that many fiber ISPs will be willing to take new awards a year from now at lower levels than the Benefit of the Bargain grants.

I titled this blog Much Ado About Nothing, because that’s what I expect out of it. I have a hard time seeing any meaningful numbers of locations getting infrastructure in the process, meaning only a small fraction of the non-deployment funds will be used in this process.

I’m hoping this will be my last blog on BEAD, because the process has grown too obtuse to keep writing about. This seems like a scheme for NTIA to delay any discussion about using the $21 billion of non-deployment savings for several more years. I expect most ISPs to ignore this new process, but states are going to be obligated to try to make the awards to somebody. Wouldn’t it be ironic if this ends up making new grants to the satellite providers at a much higher amount per location than what they accepted with the original BEAD? My inner conspiracy voice wonders if that’s the real intention of the new rules.

A New Broadband Competitor

In 2025, Edgebeam Wireless was formed to take advantage of the unused spectrum of TV stations. The business is a partnership between the E.W. Scripps Company, Gray Media, Nexstar Media Group, and Sinclair. You may recall that a few years ago the FCC held an incentive auction to lure TV stations to sell their spectrum, and many station owners decided to do so. However, many TV stations, including these companies retained the spectrum because they perceived that the value in using the spectrum was greater than the value of selling it.

EdgeBeam is currently actively expanding the business. In April 2026, the company acquired Sinclair’s Broadspan distribution platform (including its software suite and core engineering team). In mid-April 2026, EdgeBeam onboarded Soracom as its first cellular partner to allow the business to bundle mobile and broadband services.

Edgebeam is using ATSC 3.0 technology. ATSC 3.0 is a technology upgrade for broadcast TV stations that overlays a broadband signal on top of an over-the-air TV transmission signal. When this technology was first introduced, stations talked about using it to provide reliable 4K video through the air, allow for video-on-demand, provide immersive high-quality audio, and greatly improve the broadcast emergency alert system. TV stations also envisioned a whole array of digital features that are standard with streaming services, like program guides, actor bios, and any other kind of added information a station wants to send to customers.

Edgebeam is going far beyond the vision of better television and wants to use the bandwidth to provide services to commercial and industrial users. The company has one big advantage since its owners have stations in most urban markets, giving the company access to a huge number of potential connections.

The company is targeting the following markets:

  • Automotive connectivity and the ability to push large updates to cars for maps, infotainment, precision navigation, and safety enhancements.
  • Providing a new connection for public safety networks, which have been shown to get quickly overwhelmed during emergencies.
  • Digital signage to support video billboards.
  • IoT and content delivery networks (CDNs) where Edgebeam would offload large local data files in edge networks.
  • Improving the accuracy of GPS by being terrestrially-based instead of satellite-based.
  • Automatic updates to firmware for ASC 3.0-enabled devices.

The company has already landed a large customer in the Digital Mapping Group. DMG is using the Edgebeam bandwidth to provide local precision mapping within a centimeter for construction and utility projects.

The real benefit of ASC 3.0 technology is that Edgebeam can send data to any device that has a built-in ASC 3.0-capable chip. The technology is already being deployed in smart TVs, giving the chipmaker the economy of scale needed to keep costs low. This is a more cost-effective way than enabling devices for 5G. Edgebeam is also using licensed spectrum that isn’t being used for other purposes.

The bandwidth isn’t large, and a single ASC 3.0 signal can realistically deliver speeds of 25 – 50 Mbps. However, when coupled with the H.265 video codec, the bandwidth can be used to deliver large files like 4K video. Since most of the planned uses of Edgebeam plan to transmit data in the background, that’s sufficient bandwidth for a slew of use cases. The company is clearly a new competitor to 5G. Interestingly, most of the Edgebeam markets are the same benefits cell carriers claimed for 5G – and largely didn’t fulfill. If Edgebeam is successful, it is going to make it that much harder to justify big outlays for 6G.

Let’s Refurbish More Computers

One of my favorite groups in today’s broadband ecosystem are the folks who refurbish used computers, laptops, and cellphones so that they can be reused again. The folks who do this fill an important and needed niche in the industry. Refurbishers come in many flavors. There are both large and small non-profits that do this work. Commercial firms who do this range from neighborhood computer shops that refurbish a few devices as a sideline to larger companies that refurbish large volumes of devices.

Refurbishers don’t all have the same business model. Some non-profits do this to donate devices to those who need them. Others sell used devices for low prices. Some only fix devices, while others offer a range of services. One of my local favorites is Through the Trees, a non-profit that not only offers affordable devices for those who need them but also operates a help desk and training programs to help people learn how to best use the devices.

Refurbishers play some important roles. Getting free or reduced-cost computers into the hands of those who need them is a hugely important goal. It’s easy for people to recognize that not having a device to use the Internet is a huge barrier for folks who can’t afford to buy a computer or tablet. I know one refurbisher who first got started by providing computers to kids in homeless families.

I could write many pages on how getting a computer can change a family’s life. Getting a device means getting access to all of the online things most of us take for granted. Numerous studies have shown that students with a computer in the house gain far more digital skills than those who only use computers at school. A computer in the home can mean online banking, telemedicine, schooling and training, and taking part in the everyday digital world that most of us take for granted and don’t even notice.

Refurbishers also help the environment. I’ve seen estimates that the world generates over 60 million metric tons of total electronic waste each year. It’s estimated that we throw away over 40 million computers every year, most of which eventually end up in a landfill. Only 15% to 20% of e-waste is recycled to some degree, and what we discard ends up putting heavy metals and toxic waste like lead, mercury, and cadmium into our landfills.

Refurbishing only a small percentage of devices would make a big difference by reducing waste and by helping those who need a device. I saw an estimate that 88% of homes do nothing with used devices, and they pile up in some corner of their home.

When I’ve suggested to people that they give their computer to a refurbisher, their number one fear is that somebody will access the data they have on the computer. I would hope over time that fear lessens as we keep more and more of our data in the cloud. But there is no reason to worry about your data if you use a reputable refurbisher.

The National Institute of Standards and Technology (NIST) created a standard guideline that defines how to scrub or sanitize hard drives before safe reuse. The NIST SP 800-88 (Guidelines for Media Sanitization) defines three key steps for proper media sanitization. Refurbishers take these standards seriously since they would otherwise face financial risks and wouldn’t be able to be insured.

  • First is destruction. NIST defines three methods of cleaning data from a device based on the data’s sensitivity and the potential risk of recovery. “Clear” means overwriting or erasing data using approved software. “Purge” means using a magnetic device or cryptographic erasure to remove data. “Destroy” means physically damaging a device through shredding, crushing, or melting so that data recovery is impossible.
  • Next is verification. This means testing the cleaned device to make sure that data is no longer accessible.
  • Finally is certification, meaning a refurbisher must provide a certificate of destruction that details the sanitization process and the details of who and how the data was scrubbed.

If you aren’t giving your old computers today to a refurbisher, you need to give this some thought. There is somebody living near you who could get some life-changing good out of your old machine.

Good Enough Broadband

Throughout this year, I’ve been hearing the phrase “good enough broadband” to describe consumers willing to take slower, less robust broadband connections in order to save money. This is most commonly used when referring to FWA broadband, but I’ve seen big ISP executives using the phrase when talking about customers who leave fiber for any slower technology.

This is not a new phenomenon. I recall statistics from five years ago that showed that up to 25% of customers in cities still bought DSL delivered over copper. At best, urban DSL had download speeds of 100 Mbps, but the majority of DSL was a lot slower than that, with most urban customers seeing download speeds between 25 Mbps and 50 Mbps. Cable companies always tried to win over the DSL customers, but cable was always a lot more expensive than DSL.

As big urban telcos decided to get rid of copper, they raised DSL rates to between $55 and $65 per month, eliminating much of the savings for sticking with copper. We have no way of knowing where FWA has gained customers, because the big cable and fiber companies deny that customers are leaving them for FWA. But at the end of the second quarter, the three big cellular carriers grew to reach 16.5 million FWA customers, and according to Ookla, 70% of these customers are in cities and suburbs, where customers have access to cable and/or fiber.

Those FWA customers have to be coming from somewhere. It seems likely to me that FWA has gained a lot of its growth from customers fleeing the increasing cost of DSL. For the last two years, customers have been able to bundle FWA home broadband with an existing cellular product for as low as $35 per month, making it far more attractive than DSL (and every other broadband product).

One aspect of thinking of broadband as good enough is to look at how customers use broadband. Not all broadband customers need big bandwidth. Households who use broadband mostly to stream and to do basic things like shopping or banking on the web are likely fairly satisfied with slower broadband. Households with only basic broadband needs don’t feel like they are settling for something inferior, and in fact, they probably think that people spending more for broadband are wasting their money.

Unfortunately, there are a lot of homes that feel like they are trading down if they opt for cheaper broadband. The big limitation of all technologies other than fiber is slower upload speeds. Cable company upload speeds have gotten a lot better, but technologies like DSL and DWA struggle to achieve the FCC’s definition of broadband of 20 Mbps upload.

I’ve heard a lot of ISPs with relatively slow broadband say that their 20 Mbps upload speeds are all that people need. But the reality is this isn’t so for many consumers. First, technologies like FWA don’t have the steady, constant upload speeds like fiber, and the speed can vary a lot from second to second and can kick people off video calls or connections to the office or school. The real quality test of a broadband connection is not the speed that can be achieved in a speed test, but whether somebody can maintain an online session for an hour or more.

One thing that I think is certain is that we are going to continue to see more homes downsize broadband as household budgets continue to tighten. A lot of customers will sadly decide that slower broadband is better than no broadband.

Related to this is a recent blog I wrote about households that drop broadband when they can’t afford the bill, but who come back when they scrape together enough cash. Let’s face it, tightening household finances means more churn and uncertainty for ISPs.

LoRa – The Quiet Radio Technology

LoRa is a radio technology in common use that most people have never hear about. The LoRa Alliance recently reported that there are 150 million global devices connected by LoRa technology. LoRa is shorthand for Long Range and is a radio technology that sends small bits of data over long distances using little battery power. In the U.S., the LoRa technology uses unlicensed spectrum between 902 and 928 MHz.

There is a good chance that you are close to a device using the technology. Here are some of the common uses for LoRa:

  • Smart metering for water, gas, and electric meters.
  • Smart parking to indicate if parking spots are empty or occupied.
  • Smart city applications like reading sensors for air quality, weather, gunshot detectors, or full trash cans.
  • Disaster warning such as flood water level sensors or air quality smoke sensors that indicate a fire.
  • Industrial monitoring for a wide variety of sensors to monitor things like machine vibrations, structural cracks, or changes in temperature
  • Tracking large assets like forklifts
  • The open-source app Meshtastic is being used to text locally without using the telco grid, which is particularly useful for hikers and others traveling where there is no cell service.
  • Panic buttons for health or safety alerts.

LoRa is a relatively new technology. The idea was developed in France by Nicolas Sornin and Olivier Seller, who were looking for a cheap way to read utility meters. They worked with partners and launched the French company Cycleo in 2010, aimed at reading wireless utility meters. The company was purchased by the semiconductor company Semtech in 2012, which provided the capital to scale the technology globally. In 2015, Semtech and other interested users of the technology formed the LoRa Alliance to create and maintain open standards, to promote interoperability, and to promote the technology worldwide.  The technology took off in 2017 as carriers began shutting down legacy 2G networks.

Even though this is a low-power technology, the typical LoRa transmission is reliable for nine or ten miles. Engineers have been able to transmit a signal as far as 132 miles terrestrially using only 25 mW of power. The record for satellite-to-earth transmission is 517 miles.

LoRa uses chirp spread spectrum (CSS). This is a radio modulation technique that has been used for many years in maritime sonar, aviation, and satellite communications. CSS uses a technique to sweep upward and downward within a set frequency range over time. Each chirp can only transmit a tiny amount of data, and the technology limits the amount of data that can be sent over a given time. This makes this a great technology for transmitting simple things like the usage readings from an electric meter, or whether there is a car in a parking space.

The LoRa Alliance now has more than 340 member organizations, with 45 joining so in 2026. The Alliance has certified around 700 devices. There are some interesting large users of the technology:

  • ZENNER Connect operates more than 11.6 million sensors and over 174,000 gateways across 15 countries.
  • Netmore reports 11.2 million active devices on its network.
  • The Things Industries reports 6 million devices.
  • Veolia currently has more than 4 million active smart meters in France.
  • CENTEGIX reports more than 800,000 people wearing its CrisisAlert wearable panic button badge daily.

Broadband for Rural Public Safety

Today’s blog talks about the problems encountered by first responders in rural areas related to poor broadband and cellular coverage. The blog was prompted by an excellent report, Beyond Connectivity Among Rural First Responders in Pennsylvania, authored by Christopher Ali, Abigail Simmerman, and DongWood Jeong of The Pennsylvania State University. The report was sponsored by the Center for Rural Pennsylvania, a legislative agency of the Pennsylvania General Assembly. The findings are not going to surprise anybody who works with public safety in rural areas.

The report is based on the findings from focus groups and interviews with law enforcement officers, firefighters, EMTs, 911 center representatives, local officials, and other key stakeholders. The in-depth discussions identified multiple problems that hinder public safety work in rural areas:

  • The lack of rural cellular coverage means there are rural dead zones where first responders and the public can’t reliably communicate with each other. This means the public often has trouble connecting to 911. It means that first responders struggle with dropped calls and often can’t find the person who needs help. The report cites examples where first responders sometimes have to go door-to-door looking for somebody with a landline in order to communicate locally – which will be an increasing problem as copper networks are being torn down.
  • Many jurisdictions have public safety radio networks for first responders to communicate with their home hub. First responders in Pennsylvania complained that there is a major inconsistency between the types of networks being deployed, and that they often find themselves working in an area that uses different radios and frequencies than the radios they are equipped with. They also say that in the mountains that cover Pennsylvania, there are many places where those radio networks don’t reach.
  • There were complaints about the astronomical cost of devices. Both cellphones and public safety radios have gotten increasingly expensive. In rural areas, first responders might have to carry multiple cellphones to connect to different carriers.
  • There is an overall perception among first responders that they are underfunded and don’t have the resources needed to do a good job in rural areas.

The report goes on to address policy issues that might be addressed by the General Assembly if they want to improve public safety performance in rural areas.

  • The rural coverage issues can only be fully addressed with more towers. The report suggests this would be a good use for BEAD non-deployment funds, although it’s looking increasingly unlikely that funding will never be allocated to states.
  • The report suggests the legislature could create rules to address the multiple radio frequencies and technologies being used. They note that Pennsylvania has adopted the P25 radio standard to promote interoperability, but that many local jurisdictions have not adopted the standard.
  • The report also recommends a program to update and replace outdated radio technologies. Many local jurisdictions are sticking with older radio systems due to budget constraints on buying new ones.
  • The report suggests an overall budget increase to provide the money needed to keep up with the ever-increasing cost of radios.
  • The report suggests more funding to fully implement NextGen 911. It notes that the state only adopted this standard in 2025 and there has already been intermittent outages.
  • Finally, the report recommends creating more awareness among state leadership on the conditions encountered in rural public safety.

This is a long 75-page report that goes into a lot of detail, and that is a good read for anybody living in or concerned about rural America. The problems highlighted in Pennsylvania are not unique and are found in varying degrees in rural areas across the country.

Let’s Support Small Broadband Grants

When we think of federal infrastructure grants, it’s natural to think of the big-dollar grant programs. Those programs often make big awards to fund big infrastructure projects. The program with the biggest awards was RDOF. These weren’t technically grants, but a long-term subsidy for somebody promising to build broadband infrastructure, but most winners have treated RDOF as grant funding. Some of the RDOF awards are huge. LTD Broadband won $1.3 billion in the reverse auction, which was eventually voided. Charter won $1.2 billion, and Windstream won $522 million.

Other grant programs also have relatively big awards. USDA ReConnect 4 awarded $700 million in grants to 89 projects, meaning an average award of $7.9 million. BEAD has tentatively awarded $21 billion in grants to over 500 entities, with an average award of over $40 million. Many BEAD awards are a lot smaller than that, but there were also giant winners like Comcast, which won $1.7 billion across multiple states.

There are at least two federal agencies that have been awarding smaller grants that are broadband-related. The Delta Regional Authority (DRA) makes grants aimed at economic development in 255 counties and parishes in parts of Alabama, Arkansas, Illinois, Kentucky, Louisiana, Mississippi, Missouri, and Tennessee. A similar agency is the Appalachian Regional Commission (ARC), which plays a similar role across 423 counties in Appalachia across thirteen states. These agencies are required by law to make most of their awards in economically distressed counties.

Both agencies place most of their attention on projects such as water and sewer systems, transportation issues like roads and bridges, business development that promotes economic development, and workforce training. But both agencies have made grants that are clearly related to broadband. The awards at these agencies for broadband-related issues are generally small, ranging from $25,000 to $200,000.

At that size, these grants aren’t building big infrastructure projects. Instead, the grants are aimed at local needs that are too small to be funded by other programs. For example, the agencies funded outdoor WiFi during the pandemic when communities were struggling with a lack of broadband access. They fund feasibility studies, some of which have been used to attract funding from the bigger grant programs. The grants tackle projects like connecting libraries to fiber.

There are also state grant programs that make small awards, such as the program in some states that fund part of the construction cost to reach residents with long drops. In the last few years, there has also been a number of grant programs from non-profits that have made technical assistance grants related to broadband for communities.

I suspect that many of the people in the broadband industry aren’t even aware of these smaller grant programs. The point of this blog is to stress how important these small grants are. Communities that get these grants understand that there are usually no other sources of this type of funding. The small grant programs typically address a specific problem in a community that would be hard to fund in any other way.

I’ve noticed this year that a lot of the non-profit and state grants have either disappeared or are being funded at a much lower level. One has to wonder how long agencies like DRA and ARC will be allowed to make small broadband infrastructure grants since the FCC and NTIA seem poised to announce that the national broadband gap has been solved.

Unfortunately, nothing could be further from the truth. Most communities, even those that might have fiber to most residents, still have parts of the market that have been left behind by fiber overbuilders or the big grant programs. Many smaller towns and villages that have not attracted fiber have a long list of needs. I hope that small broadband grants will continue to be funded, because I see the need for such grants everywhere. Grants don’t have to be gigantic and complicated to be effective.

Why Some ISPs Fail

I saw several articles that described the collapse of Maverix Broadband in Colorado. It’s been reported that the company has received over $9 million in the past from Capital Project Fund grants, along with three awards from the State High Cost Support program. The company was poised to receive $103 million in BEAD grants. The state was alerted about financial irregularities by a whistleblower, but by the time the state could react, the company filed for bankruptcy. I know absolutely nothing about Maverix, and the article isn’t about their failure, other than an observation that the company seems to have been deep in a hole well before the collapse. We’ll eventually find out if their problems were operational or something more nefarious.

The blog today talks about why ISPs fail or get into early trouble and struggle. I’ve seen a number of ISPs that have underperformed in their early years, or even failed like Maverix. This blog talks about some of the common mistakes I’ve seen that have led to big problems for ISPs.

Biting Off More than Can be Chewed. One of the biggest causes of problems is ISPs that try to grow too big too fast. It’s difficult to launch one or two markets for a new ISP and do it well. It starts becoming impossible for a new ISP to tackle a dozen markets at the same time. This is an issue that can even plague hundred-year-old telcos. While they are good at their business, what they are not good at is the nimbleness needed to grow fast.

Takes Longer to Get to Market than Expected. I don’t think I’ve ever reviewed a business plan for a new ISP that wasn’t too optimistic about the time it takes to launch a new market. I’ve seen ISPs who plan to have their first customers within six months of the start of construction. That’s achievable if you’re adding a neighborhood to an existing ISP but is usually unrealistic in an entirely new market. There are always issues that take longer than expected, and it’s not always the same issues. In some markets it might be permitting. It might be pole attachment or getting fiber located. It could be supply chain issues. It might be waiting for software vendors to have a time slot to configure the OSS/BSS. A common problem is not being able to hire the needed people and getting them up to speed.

Miss Important Steps. This is related to the previous problem. I’ve helped many ISPs launch or open new markets in my career, and one of the best tools for getting through a launch is a Gantt chart, which is a detailed interactive list of all of the tasks that have to be completed to launch. The typical Gantt chart for launching a new fiber market might have 1,500 to 2,000 tasks. What a Gantt chart demonstrates is that failing to do some of the smallest tasks on time can slip the date for everything that is dependent on that task. Some of the big time slippages I’ve seen come from missing what sound like small routine tasks. I recall a project that had a big delay when nobody took the action item to find a contractor to build the concrete pads for huts. By the time this was realized, they couldn’t find a contractor, and the entire project was set back two months from this one oversight. My point is that even small details can get you.

Everything Costs More than Anticipated. I would guess that at least half of new market launches end up costing more than anticipated, sometimes a lot more. This could be a factor of lousy estimating, or of not anticipating the impact of delays. But when projects start running short on cash, they start making other mistakes by taking shortcuts.

Sales Slower Than Anticipated. I have seen numerous market projections for new ISPs that assume they will reach full market penetration in two years, with half of those new customers coming in the first year. Unless the ISP has fully pre-sold the market, the rate of customer acquisition is usually considerably longer than they hoped, adding more pressure on finances.

Early Outages. I’ve seen several ISPs struggle because they had major network outages soon after they launched. This is often due to not taking the time to thoroughly test the new network to make sure everything is working right. I know a few ISPs that got a quick reputation for being unreliable in a market and struggled for years. Today’s world of social media can be brutal.

Keep the Public on Your Side. The industry is full of stories of ISPs that antagonized the public through shoddy construction processes, and particularly for not doing remediation to fix public problems as soon as they arise. A community can turn quickly on an ISP that doesn’t make quality an important issue.

SpaceX Wants to End Rural Subsidies

SpaceX has now told the FCC multiple times that the agency should begin the process of phasing down and eliminating all rural high-cost subsidies from the Universal Service Fund. The company filed comments asking for the end of subsidies in FCC Docket 26-96, which is looking at reforming the High-cost fund for an all IP Future, and in Docket 10-90 that was looking at Universal Service Fund reform. In both filings, SpaceX says that its proliferation of low-orbit satellites means that rural subsidies are obsolete and are no longer needed. The company characterizes anybody who disagrees with it as a “subsidy-dependent incumbent”. SpaceX goes on to argue that the money currently spent on rural subsidies should be redirected to programs that lower the cost of broadband for low-income families.

It’s an interesting policy question that raises more questions about satellite broadband than it does about the rural companies that are receiving broadband subsidies. For example, the CAF II subsidy is being provided by a number of rural ISPs who use the subsidy to justify building and maintaining rural fiber, similar to what was done with the FCC RDOF.

I think the SpaceX request raises multiple policy questions. First, is satellite really providing broadband? Earlier this decade the FCC declared that Starlink was not providing broadband when the agency canceled the $885 million award Starlink had won in the RDOF reverse auction. At the beginning of this year, Ookla said that only 45% of Starlink customers were meeting the FCC’s definition of broadband at 100/20 Mbps. But Starlink’s speeds have been slowly improving, and will be boosted over the next five years as the company replaces the current V2 satellites with the new V3 satellites that provide 10 times more download capacity and 22 times more upload capacity.

As I have argued many times, the FCC’s 100/20 Mbps standard is no longer a reasonable definition of broadband. Recent data from OpenVault showed that 43% of U.S. households now subscribe to speeds faster than 500 Mbps download and 70% of homes subscribe to speeds of 200 Mbps or faster. It’s hard to look at these statistics and think that 100 Mbps is still an adequate definition of a good download speed. However, the real issue for satellite broadband is the upload speed. A large percentage of the homes cited by Ookla as having fast download also get far faster upload speeds than 20 Mbps. Fiber overbuilders are mostly providing symmetrical data speeds, meaning gigabit upload speeds. Cable companies across the country are upgrading the upload path and are delivering speeds of 50-100 Mbps at a minimum, and in some networks, gigabit upload speeds. The whole country learned during the pandemic that 20 Mbps upload is not adequate to support more than one user at a time – something the FCC has steadily ignored.

Another issue raised by the SpaceX request is whether Starlink provides a good substitute for voice service. Much of rural America lives in areas with little or no cellular service. The companies that receive high-cost subsidies all must pledge to offer voice service so that rural residents have access to 911. SpaceX argues that anybody with a satellite broadband connection can buy VoIP. That’s a true statement, but it raises two more policy questions of availability and affordability.

The companies receiving high-cost funding agree to service every home and business in their footprint. It’s pretty clear that Starlink can’t make that claim. While the company won’t disclose the number of homes it can serve in any given geography, there are examples, like last year’s Burning Man, where Starlink got overwhelmed by too many customers in a rural area.

I think the most important factor is affordability. Starlink’s price of $130 per month is a lot higher than other rural broadband options. Companies that receive high-cost support sell broadband for a lot less than $130, but more importantly, will sell voice-only to customers who don’t want broadband. It’s not reasonable that a rural household that can only afford voice and not broadband should have to spend $130 per month for satellite service.

In my mind, Starlink has to offer a different set of products if they want to declare that they can match the benefits that companies that receive high-cost funding bring to customers.

  • Starlink needs faster upload speeds, which it probably will eventually get as it phases in the V3 satellites.
  • Starlink would have to be able to serve everybody in a geographic area if it wants to see the subsidies end in a given area. I can envision a regulatory test similar to the one that cable companies have used to get regulators to declare a market to be competitive. High-cost subsidies should only stop in an area where every customer in the area could be served by a satellite instead.
  • Finally, Starlink would have to be a lot cheaper. If SpaceX wants to see the rural high-cost subsidies ended, it should offer lower broadband prices in those markets, including a really low-cost connection for voice only.

Growth of Mobile-Dependent Households

Roberto Gallardo, an Associate professor at Purdue University, has released an interesting policy paper, An Evolving Digital Divide: Measuring and Understanding Mobile-Dependent Households (MDH). The paper summarizes Gallardo’s research, using U.S. Census data, to compare households that rely on cellular for broadband connectivity in homes before and after the pandemic.

The paper cites several interesting statistics. Data from the U.S. Census American Community Survey (ACS) shows that the percentage of homes with no Internet access decreased from 17.6% in 2017 to 6.5% in 2025, meaning that 12.5 million homes gained broadband over that period. However, over the same period, the percentage of homes that only access the Internet with a smartphone increased from 7.5% in 2017 to 11.5% in 2024, an increase of six million households. The study also looked at device ownership. The percentage of homes that only have mobile devices (no laptops or desktops) in 2017 was 9% of 2017 and increased to 15.2% by 2024, an increase of 9 million homes. These statistics show that, while home broadband usage has increased dramatically by 12.5 million homes from 2017 to 2024, a lot of that gain was from the growth of mobile-dependent homes.

Over the years, I recall seeing articles in the popular press that speculated about these trends and concluded that people are increasingly happy with mobile broadband and don’t need a big-screen broadband option. Gallardo cites other studies that come to a different conclusion. He cites a study by Napoli and Obar in 2014 that coined the term “mobile Internet underclass” to describe the inferior nature of broadband access through a cellphone using the small screen and data plans with small data caps. That study concluded that treating mobile access as equivalent to fixed broadband risks rendering the growing mobile-only population invisible. He also cites a study by Quaglione, Matteucci, Furia, Marra, and Pozzi in 2020 that says that mobile broadband is a good complement to having home broadband, but is not a substitute for home broadband.

Gallardo goes on to undertake a deep data dive into the Census data for 2019 and 2024. He looked to see if he could discern any differences in mobile-dependent households that are related to metrics like metropolitan versus rural, race, those between 18 and 34, those over 65, households employed in blue-collar occupations, household incomes, home ownership, and homes with no Internet access available.

Some of the most interesting findings from the data related to mobile-only households include:

  • Metropolitan areas saw a significant increase in the percentage of MDH households.
  • There was no statistical change for those between 18 and 34.
  • There was a decrease in the percentage of MDH households over 65
  • There was an increase in the percentage of MDH for homes with no broadband availability.
  • There was a drop in the percentage of MDH in blue-collar households.
  • There was a higher percentage of MDH in low-income households.

Gallardo’s research didn’t look at the causes of the shifts, but it’s not hard to speculate about the reason behind some of the statistics. The increase in mobile-dependent homes in urban areas and in low-income homes is likely mostly linked to affordability. The decrease in mobile-dependent homes in those over 65 and blue-collar workers might be due to increased home broadband availability,

Gallardo reaches some interesting conclusions based upon the statistics. First, infrastructure alone does not solve the digital divide issues that push homes to use mobile broadband instead of home broadband. He concludes that if the goal is to improve access to broadband, then infrastructure construction should be paired with demand-side intervention programs like providing devices, digital literacy training, and affordability programs. At least for now, much of the digital equity funding is in limbo, and we saw Congress allow the ACP program to die on the vine. Gallardo says, “Without affordability support, the path of least resistance for many households is a mobile plan.”