Broadband Shorts March 2026

The following are a few topics I found interesting but which are two short to need a full blog.

Acquisitions Changing the Broadband Landscape. We’ve recently seen the closing of a number of major mergers and sales that are changing the broadband landscape.

  • On January 20, the sale of Frontier to Verizon closed. This $20 billion blockbuster sale brought 2.2 million fiber subscribers and eight million passings. Long-time followers of the industry are somewhat amused to see Verizon buy back millions of passings it sold to Frontier in the past.
  • On February 2, AT&T closed the sale of over 1 million fiber customers from Lumen, which brought four million fiber passings. This included customers in major markets like Denver, Seattle, Salt Lake City, Las Vegas, Minneapolis-St. Paul, Orlando, and Phoenix.
  • On March 10, the sale of Starry to Verizon closed. While bringing only 100,000 customers, the acquisition also brings Starry’s proprietary technology that uses 28/39 GHz millimeter wave spectrum to deliver wireless broadband, mostly to MDUs. The speculation is that Verizon will use the technology to expand to MDUs outside of its fiber footprint.
  • The huge merger between Charter and Cox Communications is still pending. The merger recently got approved by the FCC and still needs approval from several states. Cox would bring around 6 million broadband customers and 12 million passing to Charter, making the combined company the largest ISP in the country.
  • GFiber just announced a merger with Astound Broadband that would spin GFiber from Google Alphabet.

Action in the NDIA Suit. The U.S. Department of Justice sought to dismiss the lawsuit filed by the National Digital Inclusion Alliance (NDIA) that challenged the administration’s refusal to disperse the grant funding approved by Congress from the Digital Equity Act. These grants were aimed at tackling digital inclusion efforts that included bringing broadband devices to those that need them, training people how to use computers and broadband, and training for broadband-related jobs. The NDIA suit was first filed in early October 2025. I note the DOJ motion since the agency has had a low success rate in defending executive actions that killed various other federal grants. I think there is still a chance that this funding will eventually be awarded as intended.

AI Fueling Surge in Deepfake Spam. Hiya, a service that provides apps to block spam calls, released its State of the Call 2026 report, which says that AI is fueling an increase in spam calls. A survey of over 12,000 consumers across the  U.S., UK, Canada, France, Germany, and Spain showed a rise of deepfake calls, which use AI to mimic voices that are familiar to those being called. One in four Americans said they received a deepfake voice call in the last year. Americans said by nearly 2-to-1 that spammers are winning the battle over the FCC, which is trying to squelch spam calls.

AT&T Partnership with Amazon. AT&T, Amazon Web Services (AWS), and Amazon Leo announced a broadband collaboration this week that integrates AT&T into the AI and cloud capabilities of AWS. AT&T will become the preferred vendor to provide connectivity to AWS data centers. Amazon LEO has an existing arrangement with Verizon to bring fiber to ground stations, and it will be interesting over time to see if that business shifts to AT&T.

AT&T will partner with Amazon Leo to provide satellite broadband connectivity to some AT&T broadband customers. This is an interesting solution that could help AT&T more easily walk away from rural copper networks. AT&T also wants to bring satellite backup broadband to AT&T business customers.

Light Spectrum Licensing

There is an interesting spectrum battle going on between cell carriers and satellite companies. The heart of the contention is spectrum in the Upper Microwave Flexible Use Service (UMFUS) bands, specifically the 24 GHz (GigaHertz), 28 GHz, upper 37 GHz, 39 GHz, 47 GHz, and 50 GHz bands. These frequency bands are generally referred to as millimeter wave spectrum.

Satellite companies use some of this spectrum today via a shared arrangement with cellular companies that have purchased some of this spectrum in FCC auctions. Satellite companies are seeking greater use of this spectrum to communicate between satellites and ground stations, which is a growing concern as the number of different satellite providers and the overall number of satellites in the sky increases. Satellite companies want access to more shared spectrum using a process the FCC calls ‘light licensing’, which is a process to register new ground stations with relatively little paperwork.

The big cellular carriers don’t want any expanded use of light licensing. Like many spectrum disputes, at the heart of the issue is money. AT&T, T-Mobile, and Verizon each spent roughly $2 billion in millimeter wave spectrum auctions, and these companies would like to require satellite companies to come to them to negotiate individual site licenses for the spectrum, presumably as a way to recover some of their investment in the spectrum.

To some degree, at least so far, the millimeter wave spectrum has been a bust for cell companies. Millimeter wave spectrum comprises very short waves that can deliver immense amounts of data. You might remember the ads on TV in 2019 when Verizon touted gigabit speeds on the new Samsung Galaxy S10 smartphone. It was impossible that year to watch a sporting event without seeing these ads multiple times.

At the time, Verizon had deployed millimeter wave spectrum in a few downtown areas of a handful of cities in the hope that faster speeds would lure customers to buy a more expensive subscription to get access to faster cellphone speeds. The trial was largely a bust since it turned out that millimeter wave spectrum is blocked by everything in the outdoor cellular environment, even the body of a cellular customer. But the real issue was that the public had little appetite to pay for faster cellular speeds and still doesn’t today. Cellphones don’t run apps that need superfast downloads, and existing 4G networks at the time easily delivered video streams.

Cellular carriers argue that letting satellite companies use the spectrum for more ground stations diminishes their licenses. Satellite companies counter by pointing out that there are almost no outdoor uses of the spectrum today, and most applications are being used to wirelessly move a lot of data indoors.

This will change to some extent now that Verizon has purchased Starry, which is the only carrier to make extensive use of millimeter wave spectrum outdoors. It seems likely that Verizon plans to expand the Starry model and technology, which is only used today in a few markets.

This fight is a good example of the spectrum battles we are going to see over the next few years that tend to pit large, important constituencies against each other. I expect a lot of loud spectrum battles as the FCC tries to find 800 MHz of mid-range cellular spectrum for auction – almost all spectrum in this range is already used by somebody other than the cell carriers.

The FCC is forced to choose, in this case, between cell carriers and satellite companies. My bet is that the satellite companies will be allowed to use more spectrum under the light licensing rules. This is partly because they currently seem to have a favored status at this FCC, but also because the cell carriers have never utilized the millimeter spectrum in any meaningful way. This also might be a precursor to a future where the FCC decides that multiple parties can more easily share spectrum.

Fixing Federal Permitting

The House of Representatives recently approved H.R. 5419, a bill introduced by Representative Tom Kean of New Jersey. Titled the Enhancing Administrative Reviews of Broadband Deployment Act, the bill would attempt to improve the process of getting permits for broadband on federal land. The bill has been referred to the Senate Committee on Energy and Natural Resources.

Specifically, the bill would direct the Department of the Interior and the Department of Agriculture to conduct a comprehensive review of administrative barriers involved in reviewing applications to use federal rights-of-way. The two agencies would have a year to report their findings of the review to Congress, along with a plan on how the agencies can provide the needed staffing to review rights-of-way applications in a timely manner. The bill correctly recognizes that applications to build broadband on federal lands can be incredibly slow, to the point of creating hurdles that can stop broadband projects.

Looking back through old blogs, I see at least two other attempts by past administrations to improve access to federal lands for broadband.

In 2012, President Obama signed Executive Order 13616 that tried to make it easier to build fiber on federal lands. In a process that sounds similar to the one contemplated by the new legislation, the EO established a Broadband Deployment on Federal Property Working Group that was given a year to create a report to describe how to streamline applications for broadband on federal lands. The GAO was tasked with creating a standard set of forms and fees to apply for building broadband on federal lands. Finally, the EO ordered that all federal agencies implement a Dig Once policy that required placing conduit as part of any road projects on federal land.

In 2018, President Trump signed Executive Order 13821 that directed all federal agencies to seek to reduce barriers to capital investment, remove obstacles to broadband services, and more efficiently employ government resources related to broadband. The EO directed the General Services Administration to evaluate the effectiveness of the GSA Common Form Application used to get permission to locate broadband facilities on Federal land. Finally, the EO specifically directed the General Services Administration to complete the creation of a common form and master contract for placing wireless facilities on federal lands.

This repeating cycle of relooking at the same issues makes me wonder if this will ever be solved. And even if this legislation finally solves the issue, it will be far too late for BEAD implementation. BEAD grants are finally starting to be awarded this year, and those grants will have a four-year shot clock. For now, NTIA says that it does not expect to extend any grants beyond the four-year window.

This is not to belittle the legislation. Perhaps Congress can make progress on the issue when executive orders have failed. It just seems like the timeline contemplated by the legislation won’t provide solutions in time to make meaningful changes for broadband projects that will likely be underway this year. I hate to be pessimistic, but I have to wonder if the legislation or any executive orders will filter down to the dozens of agencies in charge of rights-of-way in various parts of the federal government.

Where’s the Growth?

I work for a few ISPs that are lucky enough to be working in counties that are seeing explosive population and new housing growth. Growth has always been uneven across the country, and I decided to take a look at the parts of the country with the fastest growth.

One of the best ways to understand housing growth is to look at permits to build new homes. Historically, 99% of permits to build new single-family homes results in a new home. About 80% of permits for multifamily homes turn into a condominium or apartment.

According to the Census Bureau’s Building Permit Survey, the top five states for permits for single-family homes in 2025, as measured in permits per 100,000 residents, were South Carolina (56), North Carolina (48), Florida (45), Idaho (45), and Delaware (43). At the bottom of the list were New York (4), Connecticut (5), Illinois (6), Rhode Island (6), and Massachusetts (6).

The states with the most permits for multi-family homes, as measured by permits per 100,000 residents, were Washington DC (60), South Dakota (33), Colorado (28), Florida (27), Arizona (27), and Idaho (26). The states at the bottom of this list were Mississippi (2), Rhode Island (3), Michigan (4), Alaska (4), and New Mexico (5).

Since my state of North Carolina had the second-fastest growth in single family-home permits per 100,000 residents, I thought I’d look deeper at the statistics in the state by county. As you might imagine, in most states, there is a wide variance between the counties with the fastest housing growth and the slowest. The following statistics for North Carolina are for total housing permits per 100,000 residents for 2023. The counties with the fastest new housing permits per 100,000 were Brunswick (254), Iredell (115), Warren (110), Pender (100), and Franklin (97). There were 8 counties with fewer than 10 new permits per 100,000 population, all in the eastern part of the state.

North Carolina has less variance in counties from top to bottom than most states, and there is healthy growth happening across most of the state. Other states that have growth in most parts of the state include Washington, Arizona, Florida, Utah, Virginia, and New Hampshire.

None of these statistics says anything about 2026, because the housing industry is infamous for seeing cycles of big booms and busts. The biggest booms since 1970 have been in 1972, 1977, 1984, 2005, and 2021. Some of the worst years for new housing were 1975, 1981, 1990, and 2009.

The housing industry had high hopes that 2026 could be a high-growth year since mortgage interest rates at the end of 2025. Realtors report pent-up demand for people who would like to move or buy a new home. But other factors like the tariffs that affect lumber prices, stagnant new job growth, labor shortages in parts of the country, and overall inflation could also result in a bad year for new housing.

One of the biggest mysteries in the housing industry is understanding the relationship between new housing growth and population growth. The two issues clearly are related, but which comes first? Does building new homes attract new residents, or do developers react to people who were coming anyway?

ISPs that find themselves in the middle of housing booms should count themselves as lucky. It’s something that can disappear almost as quickly as it appeared, but taking advantage of growth is one of the easiest business plans.

The Human Touch

Fierce Network recently had an interesting article about Consumer Cellular. This is a cellular MVNO that you might not have heard of. For those not familiar with the term, an MVNO is a cellular company that buys wholesale minutes and data from one of the large cellular carriers and markets the cellular product under its own brand name. Consumer Cellular operates on the AT&T network.

The company was founded over thirty years ago, aligns with AARP, and has always marketed to older cellular customers. Consumer Cellular stresses affordable cell plans, and its average revenue per customer is around $30 per month. The most interesting thing about the company is that it is growing while many other MNVOs are shrinking. The company has grown to over 4.4 million customers and is still seeing continued customer growth.

Consumer Cellular credits its success to the fact that it doesn’t use AI chatbots to answer online customer inquiries, as is being done with most other cellular companies. Consumer Cellular answers all customer calls with a live person.

The company is also rapidly expanding retail stores at a time when some of the bigger companies have been closing retail stores. Consumer Cellular opened its first retail store in Florida in 2022 and now has over 70 locations. The company has plans to expand to between 200 and 300 stores. The company sees big benefits from the retail stores. Customers who enroll at the stores have lower churn. The company says that people who visit a store also tend to buy higher-end phones and subscribe to larger monthly plans after they can see the options in person compared to online.

Most ISPs can’t duplicate Consumer Cellular’s success. The company is unique because of its older demographic. Consumer Cellular has embraced something that many smaller ISPs have known for years. Small ISPs universally tell me that one of the key secrets to success is that they know their customers. Smaller ISPs have thrived on having customer service calls answered live and having knowledgeable technicians. I know ISPs competing against big cable companies who say their live and responsive customer service is one of their primary advantages when competing against a big cable company.

However, this is changing, even for many smaller ISPs. Not all customers want to talk to a person. Consumer Cellular is unique because of its older demographic, but ISPs serve customers of all ages. Many customers would rather communicate using chat, text, social media, or email. I see many of my clients expanding the ways that customers can communicate with them. The ultimate customer service platform would give each customer the choice of how to communicate. But that can be expensive for ISPs that don’t have a lot of customers.

At least one big ISP went to the opposite extreme. For a long time, Starlink had no live customer service reps, and customers were expected to interface through an AI chatbot. The web is full of reviews from Starlink customers who got frustrated because they couldn’t talk to a person and walked away from the company. However, the company now has some live customer service reps based in Latin America that can be reached after customers start with a chatbot. Starlink has an unusual customer service challenge since it operates worldwide across a huge range of languages.

Some of the biggest ISPs are already experimenting with AI bots on customer service websites, meaning customers are chatting with a computer instead of a person. If they are not already being approached, I expect smaller ISPs will be seeing salespeople offering to integrate AI into their processes. I would caution smaller companies about taking this plunge. There is a lot of rumbling from large companies that AI customer service isn’t acting the way they were hoping for. The AI industry is still young, and there is likely going to be a shakeout at some point where a lot of the companies offering services using somebody else’s AI platform could disappear overnight. Small ISPs should think hard before giving up their local advantage and letting computers talk to their customers.

What Happened to Accelerated BEAD?

The BEAD road has been a long one. BEAD was first created by Congress in November 2021, meaning we’re now more than four years into the program. There are now a handful of BEAD projects under construction in a few states, but in most places, the BEAD grant program is still mired in the paperwork process that precedes releasing funds to ISPs.

To contrast BEAD with other large broadband programs, two large federal grant programs were approved by Congress in March 2021 as part of the American Rescue Plan Act of 2021 (ARPA). I estimate that the Coronavirus State and Local Recovery Fund (SLFRF) funded at least $9 billion in fiber projects. The Capital Project Funds (CPF) funded at least $11.5 billion in fiber projects. These programs were initiated only nine months before BEAD, yet the construction for awards for both programs must be completed by the end of this year.

That is blazingly faster than the BEAD timeline. BEAD proponents will rattle off a list of reasons why BEAD has taken so long, and I’ve even talked to some people who think the long BEAD timeline was intentional. A few States like Louisiana now have BEAD construction underway. But on the whole, there are still a lot of states that haven’t yet pulled the trigger.

In case you haven’t seen it, NTIA has a website that tracks the last major hurdles for each state to final federal approval. This website shows

  • Three states – California, Illinois, and Oklahoma – are still waiting for approval from NTIA for their Final Proposal that describes the BEAD grants they want to award.
  • 15 states and territories have NTIA final approval but are still waiting for NIST (National Institute of Standards and Technology) to approve the paperwork. NIST’s role is to make sure the grant paperwork is complete and meets the requirements of the original BEAD legislation.
  • 15 more states and territories have made it through NTIA and NIST approval, but still have not signed a contract with NTIA on the use of the BEAD funding. There is no way to know how much of this delay might be the typical delay from state and NTIA lawyers haggling over contracts versus states that are having disputes over contract requirements.
  • 23 states and territories have made it through all of these steps and are free to begin negotiating contracts with grant winners. I’ve heard from ISPs in some states that getting through the contract issue requires a lot of final paperwork and effort, but this seems to differ by state.

You might recall that before the election in 2024, Louisiana had made it through the BEAD process and was ready to start making grant awards. There were three or four other states that were very close behind.

When the new administration came in, one of the first things we heard from Howard Lutnick, the Secretary of Commerce, was that the BEAD process would be accelerated to put the grant funds to use. He was highly critical of the prior administration that hadn’t yet connected any households to broadband by the end of 2024. Everybody in the industry was hoping that NTIA was going to speed up the process.

However, the BEAD process went into a deep freeze while the NTIA decided what it wanted to do with the program. It took until June 6 last year before NTIA announced new Benefit of the Bargain rules. By then, almost all of the states had conducted BEAD grant application rounds and had identified potential winners. The Benefit of the Bargain required states to start over. It set a cap on the BEAD grant awards in every state, and many original potential winners dropped out of the grant process. We’re now back close to the same place the program would have been a year ago, with a number of states having BEAD winners. It’s pretty easy to argue that NTIA added nearly an additional year to the BEAD process. NTIA will say it was worth it since a lot less funding is being awarded. I’d bet the folks who will wait an extra year to see construction, or those who are now getting satellite instead of fiber, aren’t big fans of the extra delays.

FCC Alert on Cybersecurity Risks

The FCC recently took the unusual step of warning telecom companies about an increased risk of ransomware attacks. The FCC is warning telecom companies to regularly patch their systems, enable multifactor authentication, and segment their networks to avoid falling victim to ransomware attacks. The alert cited data that shows a fourfold increase in attacks on telecom companies from 2022 to 2025.

In the alert, the FCC said it has become aware over the past year of increased ransomware incidents involving small-to-medium-sized communications companies. These attacks have disrupted service, exposed company and customer information, and have locked ISPs and carriers out of critical files.

The FCC alert talks about how ransomware works and offers advice on how to protect against the problem. The FCC also offers advice on how to respond to a ransomware scammer, including advice for contacting the FCC and the FBI.

The most interesting recommendation was to monitor the cybersecurity practices of your critical vendors, which I take to mean vendors who supply network electronics or software systems. The FCC warns that a significant number of telecom intrusions have come from weaknesses in systems supplied by vendors. I’m not really sure how a small ISP is supposed to monitor this, because every major vendor you work with is going to swear that they have safe practices.

The FCC alert includes all of the standard cybersecurity practices related to regularly backing up data and training employees to avoid phishing and other bad practices. They also say that every ISP ought to have an incident response plan of how to deal with cybersecurity problems and to test it regularly.

An appendix to the FCC alert lists some best practices that are being recommended by the FCC’s Communications Security, Reliability, and Interoperability Council. This is a group formed that includes the FCC,  large ISPs, and carriers. This list recommends taking additional steps like requiring validation of software patches before using them.

This Council also strongly recommends using the least-privilege principle (PoLP) for network access. This is a process that limits access to critical software systems only to those who need access. It also involves granting minimum access rights so that users can only access the parts of a system they need while blocking access elsewhere. It can mean granting people temporary access only for the duration of a needed task. Finally, this means granting access by job function, and not by user identity.

I’s obviously impossible to fully protect a company from external attacks, as was witnessed when the Salt Typhoon hackers gained access to a number of giant corporations and government agencies that supposedly have world-class cybersecurity. But it’s worth reviewing your practices and systems, because of the downside of being unlucky enough to be a victim of one of these attacks.

The FCC’s Spectrum Challenge

The FCC has been tasked by Congress to find and auction 800 megahertz of mid-range spectrum. This was a key element of the One Big Beautiful Bill that planned to use the proceeds from spectrum auctions to offset other costs created by the bill. The bill specifically requires the FCC to auction 100 megahertz of spectrum in the upper C-Band, located at 3.98 – 4.2 GHz.

The new requirement to auction that spectrum has resulted in a strong response from the aviation industry and the Federal Aviation Administration (FAA). This new controversy is a perfect example of the challenges the FCC is going to face as it tries to free up 800 megahertz of spectrum. Proposing to change any mid-range spectrum is going to rile up controversy and opposition from those who care about a given spectrum band.

In this case, the FAA’s concern is about interference. Apparently, they don’t want to take any chance of interference from cellular companies that would negatively affect airline altimeters. I think anybody who flies is on the FAA’s side – if they are concerned, I am concerned.

The FAA released new altimeter standards in 2023 that required changes to altimeters to be able to ignore any interference from the lower C-Band spectrum located at 3.7-3.98 GHz. Even though there is a gap between the lower C-band and the 4.2-4.4 GHz band that is used for altimeters, the FCC was worried about interference.

The FAA immediately reacted when Congress directed the FCC to auction off the 3.98 – 4.2 GHz band that sits directly adjacent to the altimeter spectrum. The FAA recognizes the reality that there are radios that don’t do a great job of fitting precisely in the spectrum band they are supposed to use.

The FAA warns that existing altimeters, including those that were retrofitted to meet the 2023 changes, are not going to be able to filter out interference from the upper C-Band spectrum. The FAA tracks reports of interference, and by the summer of 2025, it had received 659 reports of potential C-band interference. After analyzing the reports, the FAA identified 118 events that were directly attributable to lower C-band interference, and this was for spectrum that is not directly adjacent to the altimeter spectrum bands.

The FCC has a major dilemma since Congress specifically ordered the upper C-band spectrum to be auctioned. I’m not sure how the agency can resolve this other than by getting Congress to change the directive. The FCC could spend a lot of money to move altimeters to a different spectrum band, but there aren’t any convenient bands that meet the criteria. This would likely require the FCC to fund new altimeters.

Other wireless users are already starting to lobby to leave certain bands of spectrum alone as the FCC searches for 800 MHz of mid-range spectrum. Rural WISPs and others are already heavily lobbying for the FCC to leave CBRS spectrum alone, which is currently being used for rural broadband. The really big fight is going to come if the FCC wants to take any portion of the unlicensed 6 GHz spectrum that is being used for WiFi 7. The military had originally said it would go along with some changes in the mid-range spectrum bands, but already seems to be retracting from that commitment.

I don’t envy the FCC’s job of auctioning the spectrum as directed by Congress. I predict big lobbying battles and probably big lawsuits before much spectrum actually makes it to an auction.

The AI Boom and Broadband

I’ve written several blogs recently about the impact of AI on broadband. For example, it’s becoming clear that a lot of AI applications will require better upload broadband speeds. ISPs that haven’t yet upgraded upload speeds will likely find themselves at a competitive disadvantage, similar to what happened to cable companies during the pandemic, when it became clear that upload speeds were inadequate to support multiple folks working and schooling from home. I also wrote a blog that discussed the big increase in web traffic that has sprung up from AI web crawlers that constantly search the web for new content.

There are other, more subtle, impacts from the AI boom. One of the unexpected issues is the sudden shortage of electricians in regions where AI data centers are being constructed. Electricians are needed during the massive effort to wire a new data center used for AI. What was unexpected is that data centers permanently employ multiple electricians to maintain the cooling systems and other ongoing needs at an AI data center. Data centers are offering attractive salaries and benefits and luring electricians who would otherwise have been busy building new houses or maintaining existing ones.

I’ve been reading stories about parts of the country where there is a sudden shortage of electricians. This can impact any ISP or other business that wants to build or upgrade a building. Folks might be surprised to know that ISPs use electricians regularly when they add new equipment or build new outdoor huts, cabinets, and repeater sites.

A more subtle impact of an electrician shortage is that it makes it harder to train new electricians. Most new electricians begin their career by being an apprentice to a licensed electrician, and if those electricians are taking full-time jobs at data centers, they are no longer working with new apprentices. Admittedly, a shortage of electricians is mostly a local issue, but it can be a real concern to ISPs who are trying to quickly expand networks.

Of more consequence is the impact that rapid data center expansion is having on the global market for memory chips. The memory market is under huge stress. While this market has historically seen boom-and-bust cycles, this time is different.

AI servers require far more memory per system than consumer devices, so the AI build-out is snagging a disproportionate share of global chip capacity and creating shortages, as suppliers prioritize orders for hyperscalers and vendors specializing in AI servers. This sudden market shift means fewer memory chips for consumer devices. For now, that is triggering higher prices for smartphones, computers, automobiles, and other consumer electronics.

But industry experts say this is not a cyclical shortage caused by a temporary mismatch in supply and demand. This is instead a permanent reallocation of the world’s silicon wafer capacity. For decades, the companies that made DRAM and NAND Flash for smartphones and PCs were the primary drivers for chip production. Today, the huge demand from hyperscalers like Microsoft, Google, Meta, and Amazon has flipped the market. In the last year, we’ve seen companies like Samsung Electronics, SK Hynix, and Micron Technology leave the consumer chip market. These manufacturers, and others, have pivoted to making higher-margin enterprise-grade components. Every wafer allocated to Nvidia is no longer available for a smartphone or consumer laptop.

Manufacturers of consumer electronics live on thin margins. This includes vendors like TCL, Transsion, Realme, Xiaomi, Lenovo, Oppo, Vivo, Honor, and Huawei. There are already rumors of these companies discontinuing lines of electronics that they don’t think are marketable at higher prices. Anything they continue to make will be sold at a much higher price since memory is 15% to 20% of the bill of materials for most electronics. Worst are the stories leaking out from these vendors that they are being asked to pre-pay for multiple years of chips to even be included in the supply chain.

Telecom companies need a lot of memory devices. The electronics used in networks are packed with chips. A more subtle impact over time will be the many broadband customers who find themselves unable to afford a new computer or tablet. This is also going to puta huge crimp on firms who have been refurbishing computers to support low-income homes. We’re just starting to see the impact of this change today, and chip experts say the full impact won’t be felt by the end of this year.

Onshoring Customer Service

In one of the oddest actions I ever remember seeing at the FCC, the agency plans to vote on rules later this month that will curtail the use of overseas customer service by companies regulated by the FCC. I describe this as odd because it’s not clear to me that the FCC has the authority to tell ISPs, cellular carriers, and cable companies how to operate their day-to-day business. The FCC press release refers to  customer service, but I assume this also applies to overseas technical support.

The FCC is considering the following changes:

  • Onshoring Incentives. The FCC will encourage carriers to return call-center jobs to the U.S.
  • English Proficiency Standards. They are considering a requirement that foreign-based customer service agents must be proficient in American Standard English.
  • Location Disclosure. Companies must disclose to customers if an agent is located overseas.
  • Right to Transfer. Customers must be given an option to transfer to a U.S.-based agent.
  • Call Volume Caps. The FCC wants to limit the percentage of calls that can be handled by foreign agents.

The FCC says its proposed action is for security purposes since foreign call centers present a higher risk of not protecting customers’ personal data. The FCC insinuates that overseas call centers have been linked to the rise of robocalls and fraud, which may be true, but I’ve never heard of this before. The FCC says the changes are also intended to create U.S. job growth.

A quick review of the biggest carriers shows that Charter already uses 100% U.S.-based customer service agents. The FCC made the company agree to onshore customer service for its merger with Cox, but that was something the company had already promised when it first announced the Cox merger. Verizon mostly uses U.S. agents but has some limited overseas customer service. The big companies that will impacted the most are Comcast, AT&T, and T-Mobile, each of which uses a lot of overseas customer service agents. I’ll be curious to find out how smaller ISPs send this work overseas.

There is little doubt that this will be popular with many in the public. It’s not hard to find complaints on the web of customers who don’t like talking to somebody overseas. However, there are also a lot of online complaints about big companies like Charter, which uses U.S.-based customer service. I’ve always wondered how much people dislike overseas agents compared to the degree that they don’t like talking to any agents who use prepared scripts to answer questions.

One of the first things that came to mind when I read this is that it might provide an incentive for the big carriers that use overseas agents to transition to AI customer service. That would eliminate overseas workers, but it might also eliminate U.S. jobs. My gut feeling is that we are still not close to a day when a company can safely hand customer service completely to AI, but that doesn’t mean that some companies won’t try it. I suspect the public will hate talking to AI even more than talking to a live person, here or overseas.

The biggest question that will have to be answered is whether the FCC has the authority to order this. I can’t think of any section of the FCC code that would give the agency the authority to mandate the manner in which ISPs and carriers conduct day-to-day business. It will be interesting to see if anybody challenges them on this.

I also find it curious that this doesn’t feel like the light-touch regulation that was promised by the current FCC Chairman. This seems like new regulations that will add a lot to the cost of regulatory compliance. As I said at the beginning of the blog, it’s an odd idea on many fronts.