Customer Reactions to Outages

On January 14th of this year, Verizon had a major cellular network outage that lasted up to ten hours and that impacted more than 1.5 million wireless customers. Not all Verizon customers lost service, but the impact was felt across the country. Recon Analytics conducted a survey of 1,702 small, medium, and large Verizon business customers to understand their reaction to the outage. I can’t recall having ever seen a public survey of this type related to a single event. The results tell a sobering story for all ISPs and carriers.

The biggest impact was felt by the large businesses, and 44% of them said they were impacted by the outage. That makes sense they tend to operate in multiple locations, across multiple states, with a lot of employees that can be impacted by a day-long outage. 33% of medium-sized businesses were impacted, and 21% of small businesses. On the flip side, only 3% of large businesses were not aware of the outage, while 7% of midsize and 12% of small businesses hadn’t heard about the outage.

For all sizes of businesses, about two-thirds said the outage didn’t change their opinion of Verizon. That’s a scary statistic for anybody who sells to businesses, because it means one-third changed their opinion. About 5-6 % of all these customers said they were much more negative about Verizon, with 32-35% said they were somewhat more negative.

When asked if they were more likely after the outage to shop around for an alternative to Verizon, small businesses were the most forgiving, with 28% saying they were more likely to shop around, while 50% of midsize companies, and 59% of large businesses said they were likely to look for alternatives. Anybody who has worked is sales and marketing knows that there is a big difference between somebody who will consider changing service and somebody who will definitely change service.

But still, the survey results have to be worrisome for Verizon. The Verizon business sales team had been pushing the story for years that the reason to Verizon is because the service is reliable. An outage that lasted throughout a workday is the opposite of reliable.

While this survey concerned a long cellular outage, it’s something ISPs should also be aware of. Not only business customers, but also residential customers now believe that cellphone and broadband coverage should always be on, and never off. My friend Travis, who owned US Broadband, tells the story of how he had a ten minute outage in the middle of the night in Minneapolis, after years with no outages, and his negative Google reviews went through the roof.

It’s virtually impossible to never have a network outage, at least in some portion of a network. The Verizon outage of ten hours was particularly negative for the public, especially after the company eventually said the cause of the outage was some unspecified software issue. We don’t expect big companies to have software problems they can’t resolve quickly.

This outage raises the issue of what ISPs and carriers should do after an outage. First is probably having an internet definition of what constitutes an important outage – is it an outage that lasts ten minutes, an hour, or half a day? Should an ISP pretend short outages didn’t happen, or should they fully explain outages to every customer who was impacted?

Indoor Cellular Coverage

In an experience that is probably familiar to everybody, in the last few months I’ve found myself unable to get a cell signal in places I routinely visit. At the pharmacy, the only cell coverage I could find was directly next to the front windows. I went to my doctor and found I couldn’t get any reception while biding my time in a waiting room. There was no signal in the back half of the grocery store.

I know my experience is not unique, and I regularly see other people grumbling in these locations about the lack of cell signal. It seems extraordinary in today’s world, where people want nearly ubiquitous cellular coverage, to find so many places with poor or no cell coverage indoors.

My first reaction to this was surprise, since my cellphone data speeds are easily ten times faster than they were a decade ago. The fact that I can’t receive indoor cellular coverage is a reminder that cell reception is due a lot more to the power of the signal rather than the speeds being delivered.

There are several reasons why indoor cell coverage is getting worse. One big reason is that cell carriers have been migrating to higher frequencies. Years ago, cellular networks widely used frequencies like 700 MHz and 900 MHz, which were able to easily penetrate buildings. The higher frequencies used today do a much worse job of penetrating buildings. A second reason is that the building materials used in newer or upgraded buildings deflect a lot of the cell signal. Modern insulation materials are generally less friendly to cell signals. Ookla recently documented that low-E glass, which is used to reflect heat in many new buildings, reflects cell signals along with reflecting heat. The bottom line is that you aren’t imagining it if you notice that indoor cell coverage isn’t as good as it was in the past.

There are several possible fixes for this, but they aren’t cheap and aren’t widely deployed. One is for businesses to invest in a cellular repeater to put on the roof to aim downward to provide better cell coverage inside the building. Cell carriers have been pushing this technology for years, and many hotels, convention centers, and office buildings are willing to pay for the capital costs and recurring fees to provide better cell indoor coverage. But groceries, hardware stores, doctors’ offices, and pharmacies aren’t willing to make this kind of investment.

Another alternative is to provide free public WiFi inside large buildings. Many businesses where customers spend significant time do this today. A large percentage of the restaurants I visit have WiFi for customers, but most require a customer to find the password and log in, something I’m rarely willing to do during a quick trip to the grocery or pharmacy. Very few stores offer WiFi that doesn’t require a password.

There has been talk for years of implementing Hotspot 2.0, a technology that allows a subscriber to automatically connect to any WiFi router that is part of a larger Hotspot 2.0 network. Every year we hear of a few smaller cities or ISPs that put together this kind of network. However, the idea has never gotten enough traction to bring it to larger markets. I’m sure the issue is figuring out a way to monetize the effort to cover the costs of implementing it.

Another new concept for improving indoor coverage is to allow access to a neutral 5G host. This would involve a third-party infrastructure provider to build, own, and operate shared cellular infrastructure for buildings that can be used by any cellular carrier. The neutral 5G host would likely want some up-front money from building owners, but would expect to also charge the cell carriers for the extra reach provided to their networks.

One interesting technology solution is the use of small cellular repeaters that would work in conjunction with a neutral host. Ericsson markets a repeater called the Radio Dot, shown at the top of this blog. Repeaters can be distributed throughout a building to make sure the cell signal reaches all needed spaces, much like is done with WiFi extenders.

Relaxed Environmental Study Rules?

One of the most frustrating aspects of grant-funded projects for the public is that it takes years from the announcement that their neighborhood is covered by a grant until they see the new infrastructure. One of the reasons for these delays has been environmental studies that are mandatory when projects are funded by federal funds.

Environmental studies were first mandated for federal projects by the National Environmental Policy Act (NEPA) of 1969. This law required environmental studies for what was classified as a major federal action, which means any construction using federal funds, any construction built on federal land, or construction that requires a federal approval or permit. The type of proposed construction would trigger either an Environmental Assessment (EA) or an Environmental Impact Study (EIS). NEPA defined different kinds of activities that would require different types of assessment, with the two most common being impacts on the environment or on historic preservation.

On April 9, the Council on Environmental Quality issued a memorandum to all federal departments that suggests new guidelines for how to implement the NEPA laws. The issues covered in the memo haven’t been mandated by Congress, and don’t carry the force of law. However, it’s likely that most federal agencies will follow the new guidance.

The new guidance establishes what it calls categorical exclusions from the NEPA rules that would soften or eliminate the need for an environmental study if a project is not likely to “significantly affect the quality of the human environment”. It lists three types of categorical exclusions that can be considered:

  • The first categorial exclusion would apply if construction is to occur in an area that was already covered by a previously completed environmental review that did not trigger a full environmental study. Agencies would need to examine the previous environmental review to see if this warrants an exclusion today.
  • A federal agency can also look at other similar exclusions for environmental studies that have been granted in the past by the agency. If a new project is similar in nature to past cases where an environmental study wasn’t required, the agency can determine that a new review isn’t needed.
  • Finally, the agency can rely on the experience and expertise of its staff or outside experts who are familiar with the proposed project to determine if a review is needed.

What does all of this mean in practical application for broadband projects? This might eliminate the need to conduct environmental studies for construction done in the public rights-of-way of roads. The vast majority of fiber construction occurs by burying fiber on the shoulder of roads, which have been excavated in the past during road construction, or hanging fiber on poles that are in the public rights-of-way. It’s always seemed absurd to industry folks that there are any environmental issues from construction close by existing roads, since those areas have probably seen construction multiple times in the past.

The new guidelines would not change the requirements for a project that proposes to build fiber across wetlands or other areas that have never seen past construction. It probably doesn’t make it easier to build close to historic sites. But the new guidelines could eliminate the time and paperwork involved in conducting the environmental review for a majority of federal grant-funded projects. And that is not small thing. Construction can’t begin with grant dollars until environmental reviews are complete. The reviews can take from a few weeks to many months, and if a full environmental study is indicated, a project can be delayed by a year or two.

The FCC Opens the 900 MHz Band

The FCC voted in its recent open meeting to expand the use of 900 MHz spectrum. The order opens up the full 10 MHz available in the 900 MHz spectrum bands 896–901 and 935–940 MHz, for licensed broadband services. 900 MHz is an attractive band for users since the signals carry a long way and are good at penetrating buildings.

The licensed portion of the spectrum is not of interest to WISPs due to the small size of the channels, which won’t deliver the kinds of speeds expected by home broadband users. But the spectrum can easily support smartphone applications and is of interest to those wishing to deploy private 5G network.

This FCC change does impact the other bands of 900 MHz spectrum. For example, there are numerous uses allowed for the spectrum between 902 and 928 MHz, including ham radio, FM radio repeaters, alarm and security camera systems, video surveillance for law enforcement missions, and transmission of infrared scanner imagery during overflights of disaster areas. Some of these uses are restricted in Texas and New Mexico since this spectrum is also used to monitor the border.

The primary users of the expanded-use bands will be electric, gas, and water utilities that have been using the spectrum for automated meter reading and other network monitoring devices. The purpose of the FCC’s change is to provide more bandwidth and expanded capacity to utilities. The FCC order predicts that the changes to the spectrum usage will promote better smart metering, grid modernization, and network security and resilience. Under the former rules, transmissions in the band were restricted to 5 MHz licenses, which limited the ability for utilities to launch private 5G and LTE networks.

The new order provides different options for a current license holder to:

  • Continue to use the legacy configuration of 20 wideband channels and 200 narrowband channels.
  • Operate two paired 3 MHz channels and two segments of the remaining 4 MHz of spectrum to operate 159 narrowband channels.
  • Operate two paired 5 MHz channels to deploy more broadband use cases.

This change largely benefits Anterix. The company purchased a nationwide license for 6 MHz of the spectrum from Sprint in 2014. Anterix has been selling and leasing that spectrum to utilities to create private wireless networks. This new order gives the company the use of all 10 MHz of the spectrum.

One of the most interesting aspects of the new order is that it anticipates that the spectrum will be made available to others through voluntary negotiations and market-based transactions. The Anterix spectrum today is largely deployed on a county-by-county basis, and this order opens the door for entities other than utilities to license the spectrum to create local private 5G networks. This could be used by corporations or local governments looking for a private and secure wireless network outside of the public cellular networks.

I recently noted how the public cellular networks crashed in Western North Carolina after Hurricane Helene. While a number of cell sites sustained physical damage, many were still operational, but still failed since the backhaul fiber lines feeding the region were damaged or destroyed. While the lack of cell signal was a major inconvenience for the public, it was a crushing blow to first responders who found themselves unable to communicate. A private in-county 5G network for first responders using 900 MHz could have continued to work locally on the functional cell towers. This would have greatly benefited the search and rescue effort and the overall coordination of first responder resources.

It will take a while to see if this is a giveaway to Anterix or if this will really open up new opportunities for first responders and other local private wireless network providers.

The End of ReConnect?

USDA has proposed a budget for the next fiscal year, starting October 1, which contains drastic cuts for broadband. Overall, the agency is proposing to cut its overall discretionary funding by $4.9 billion, a 19% reduction. The cuts align with the proposed White House budget recommendations for the next fiscal year, that includes the following language:

USDA’s Rural Development programs are streamlined to focus on programs that have demonstrated efficient results and are an appropriate Federal role. . . No new USDA funding is needed for broadband expansion, as existing balances and other Federal resources are meeting planned growth. The Budget would also eliminate programs that are duplicative, too small to have macro-economic impact, costly to deliver, in limited demand, available through the private sector, or conceived as temporary. These include rural business programs, single family housing direct loans, self-help housing grants, telecommunications loans, and rural housing vouchers. Rural Development salaries and expenses are reduced commensurately.

Probably the biggest headline in the proposed USDA budget is that it completely eliminates the ReConnect grant program. The agency argues that ReConnect funding would be duplicative since  BEAD and other grant programs have eliminated the need for additional rural broadband infrastructure spending.

There is still $230 million remaining in the proposed budget for rural broadband, including $200 million in new broadband loans and $30 million in rural telehealth grants. The new budget claws back $40 million in unused funds still sitting unclaimed in the ReConnect pilot program.

This may not be the end of the ReConnect story, since Congress has the ultimate say in the budget. The program is still very popular with politicians. There have been several occasions in the past when Congress added funding for Reconnect during the reconciliation of the annual agriculture budget. As recently as November 2025, Senators Roger Marshall (R-Kansas) and Peter Welch (D-Vermont) introduced a bill that would provide $650 million annually through 2030 for ReConnect. But unless something like that bill happens this summer, the ReConnect program would be officially dead in October.

If ReConnect dies, there will be almost no remaining federal broadband grant programs. There is still $500 million available to NTIA for Tribal grants, but that’s the only remaining funding I am aware of. It would be a shame to see broadband grants disappear. Everybody who understands rural broadband knows that there will still be plenty of broadband gaps after BEAD grants are finally awarded. Some of these gaps will come from grant defaults. I’m hearing rumblings of BEAD defaults where ISPs will walk away from BEAD rather than sign the BEAD contracts. There will likely be more defaults of RDOF. There are a lot of projects funded by ARPA and the Capital Project Fund that won’t finish construction before the funding dries up at the end of this calendar year.

Defaulted grants aren’t the only places that won’t have good broadband. Jim Stegean, the president and CEO of CostQuest, which manages the FCC broadband maps, recently estimated there will be 2.1 million unserved or underserved locations left after BEAD. I think that number is conservatively small due to ISPs that claim 100/20 Mbps or faster in the FCC maps, but are delivering something slower. Not included in this estimate are the many urban MDUs that don’t have adequate broadband – something that was theoretically addressable by BEAD.

We’ll have to wait out the Congressional budget cycle, but unless somebody in Congress works hard to resurrect BEAD, the last broadband infrastructure grant program will soon be dead.

Broadband Shorts April 2026

The following are topics I found to be interesting but which didn’t justify an entire blog:

Update on the Telecom Act? Congressman Brett Guthrie (KY-02), Chairman of the House Committee on Energy and Commerce, and Congressman Richard Hudson (NC-09), Chairman of the Subcommittee on Communications and Technology, announced a hearing titled The Telecommunications Act of 1996: 30 Years Later. The stated purpose of the hearing is to examine the lessons learned from an examination of the Act. The hearing announcement suggests that Congress will see “how Congress can build on those lessons to modernize our laws to promote innovation, strengthen competition, and drive investment in modern communications networks.”

It’s obvious to anybody who follows telecom regulations that a lot of the changes made in the Act were quickly obsolete when broadband products became the predominant products of the telecom industry. Every reform effort has to start somewhere, and maybe this is the first step towards real discussions on updating telecom regulation. But in an industry dominated by regulatory capture from carriers, it seems highly unlikely that Congress has the appetite to take a fresh look at regulating the large carriers.

Will Starlink Bail on BEAD? A group of twenty House Democrats wrote a letter to Arielle Roth, head of NTIA, expressing concern that Starlink will walk away from the BEAD grants. The concerns come because of requests made by Starlink to state broadband offices for waivers of some of the ongoing reporting requirements that apply to all grant winners. For example, Starlink asked to be excused from conducting speed tests or providing ongoing financial reporting. NTIA has already told state broadband offices that states don’t have the authority to relax any BEAD reporting requirements. Perhaps the House members are worried that NTIA will issue a nationwide waiver for Starlink.

Arielle Roth said recently that states would have to reconsider the awards to Starlink if the company defaults. This has the industry wondering if defaults could result in an invitation for ISPs who want to build fiber or fixed wireless networks to rebid to serve such areas. In most states, there is still a lot of unspent grant funds that could be used for this purpose.

Copper Thefts by Organized Crime? AT&T published a blog that speculates that the magnitude of the theft of telephone copper wires is a lot higher than what might be attributed to random acts of crime. Rahdeese Alcutt, the lead investigator for AT&T Global Security, speculates that thefts in places like Southern California are likely coming from organized crime. The blog points out that it’s not just telephone copper wires being stolen, but anything made of copper, like material in railroads and transit systems, power utilities, HVAC systems, and city lighting systems. He says there are now days with hundreds of thefts of copper. Alcutt thinks this is an organized effort because it involves the use of heavy equipment and a well-coordinated effort to avoid law enforcement.

Fear of the Kessler Syndrome? LeoLabs, a company that monitors satellites in low-earth orbit reported that a Starlink satellite suffered an “anomaly” and broke apart into space debris. LeoLabs believes the likely cause was an “internal energetic source” and not due to a collision with another satellite. This is a concern because of the Kessler Syndrome, which predicts that there is some level of space debris that will result in a spreading cloud of debris that will destroy other satellites and result in a circling cloud of debris around the Earth that would be a barrier to space travel.

This risk increases as the number of satellites in orbit increases. The announced plans of current satellite companies could result in hundreds of thousands of satellites in low-earth orbit within a decade. The more satellites, the higher the chance of having catastrophic collisions. LeoLabs is not predicting that this anomaly will be a problem, but nobody knows what it might take to initiate the cloud of debris.

FCC Suspends Lifeline Providers. The FCC has always investigated fraud in the Universal Service Fund. The agency recently blocked seven individuals from ever participating in USF again after they were convicted of fraud. All of the convictions involved E-Rate reimbursement for broadband at schools and libraries. The fraud covered a range of bad behavior. A few individuals embezzled money that was legitimately paid to school systems. A few submitted fraudulent invoices to the E-Rate program or hired unsavory E-Rate partners.

Spectrum Relocation Costs

The FCC has been directed by Congress to free up 800 MHz of mid-range spectrum that will then be auctioned off to commercial users. One of the important steps to repurpose spectrum is that existing users of spectrum must be relocated to other spectrum bands before the auction winner can use the spectrum.

Two decades ago, Congress formalized some of the spectrum relocation process with the Commercial Spectrum Enhancement Act (CSEA), which created the Spectrum Relocation Fund (SRF). This fund was created to pay for the cost of federal agencies that have to change to using a different spectrum band if the spectrum they had been using is sold in an auction. By statute, any auction of federal spectrum must raise at least 110% of the estimated relocation costs for the federal incumbent, ensuring the move does not cost taxpayers. The SRF fund covers the cost of planning, research and development, and hardware upgrades needed to change to a different spectrum. The process of a federal agency having to relocate its spectrum use is handled by the NTIA.

Any commercial customers that are disadvantaged by a spectrum move must coordinate with the FCC to be compensated for changing to a different spectrum. The FCC also hopes to cover these costs through auction proceeds. A good example of this in action was the 2016 incentive auction, where almost 1,000 television stations moved to a new over-the-air channel to free up spectrum for cellular purposes. Anybody bidding on this spectrum understood that the price they needed to pay had to be high enough to compensate television stations that were being displaced.

There have been a number of spectrum auctions that were profitable for the FCC and that raised a lot of money over and above the relocation costs. But not all spectrum auctions have gone as planned. For example, the 2012 Spectrum Act required the FCC to auction the T-Band spectrum (470-512 MHz). This spectrum was widely used by first responders and public safety, and it was determined by the GAO, after a lot of complaints from public safety agencies, that the cost to relocate the existing users was going to exceed $5.9 billion, which was more than what the auction was expected to raise. Congress eventually repealed the requirement for the auction.

There are a few auctions where the actual relocation costs were higher than had been estimated. In the AWS spectrum (1710-1755 MHz) auction in 2013, the actual federal relocation costs were $474 million higher than anticipated.

There are other spectrum auctions where it has taken the incumbents a lot longer to vacate the spectrum than expected, making the spectrum unusable for the new buyer. A good example is the 2016 incentive auction, when it took some television stations a long time to make the transition to a new spectrum band.

The relocation issue is relevant today due to the upcoming efforts that will be required by the FCC to auction 800 MHz of spectrum, including 200 MHz this year. These auctions were ordered by the One Big Beautiful Bill with the expectations that the auctions would raise $60 billion for the U.S. Treasury. However, that revenue number ignored the impact of paying existing users of spectrum to relocate. It’s impossible to know what relocation might cost since the specific spectrum bands haven’t yet been identified. But most of the mid-range spectrum bands are already heavily used by military, government, and commercial users. It seems likely that the net gain from the auctions could be less than $60 billion expectation

California’s Middle Mile Fiber Network

California initiated its Middle-Mile Broadband Initiative (MMBI) in July 2021 with $3.25 billion in funding authorized by Senate Bill 156. On April 2, Governor Newsom announced that the first portion of the network would be activated and ready to provide wholesale broadband access.

MMBI is an extensive fiber network that stretches across the state, as shown on the map below. What’s not obvious on this map is how the network reaches throughout cities like Los Angeles to reach underserved and low-income neighborhoods.

The first live customer on the network is the Bishop Paiute Tribe located at the base of the Sierra Nevada Mountains in Inyo County. The Tribe is the recipients of a grant to build last-mile fiber funded by an NTIA Tribal grant. The connection to the MMBI network brings the backbone bandwidth to support the local network, and the fast speeds on the fiber network were immediately activated by the live connection to MMBI.

The bill authorized various parts of the state government to coordinate the construction of MMBI:

  • CENIC Middle Mile Broadband Initiative, LLC was authorized to be a third-party administrator to manage the development, construction, maintenance, and operation of the network.
  • The California Public Utilities Commission (CPUC) works with CENIC to determine the routes and access points on the network.
  • Caltrans will manage construction along state highways.
  • The Middle-Mile Advisory Committee (MMAC) was created to oversee the project and to advise on issues like the rates charged for connections on the network.

MMBI differs from state-owned networks in many states in that its goal is to provide affordable affordable backbone connectivity to ISPs, municipalities, Tribes, and others who want to provide last-mile broadband or cellular service. Many statewide fiber networks were built to provide broadband to government buildings and anchor institutions, but don’t allow middle-mile to be used for commercial purposes. I hope that States might look at what California has one and will open up their State fiber networks to provide affordable backhaul.

The network shown on the map above is the first phase. The state is open to proposals for joint construction with other entities to continue to expand the network to additional communities.

The $3.25 billion of spending, just within California, shows the inadequacy of the $1 billion middle-mile grant program authorized by Congress as part of the Infrastructure Investment and Jobs Act. Lack of affordable fiber middle-mile is still a glaring issue throughout rural America, and California is to be lauded for starting to solve this issue in the state.

Leftover Copper Customers

I read that T-Mobile was thinking about buying the fiber assets of UNITI, which includes the fiber assets of Windstream. Regardless of whether that sale happens or not, it made me wonder about what happens to the customers served by copper who don’t go with a sale. Copper customers would be those served with telephone copper who are buying traditional TDM telephone service, DSL, and T1s and related products.

The concept of buying only fiber customers from an ISP seems to be a new industry theme. Lumen sold its fiber customers to AT&T but retained the copper customers. We know Lumen’s stated plans when it sold fiber customers to AT&T. The company publicly said it would retain and care for its copper-based consumer services since they continue to provide a strong ongoing financial contribution to the company.

But will they really? I have to think that a lot of Lumen markets were a mixture of copper and fiber, and that a lot of the technicians and much of the support apparatus for caring for these customers will leave with the fiber customers. I could be wrong, but I find it hard to imagine that Lumen will provide a robust maintenance crew to take care of the copper customers. This seems even less likely for a smaller company like Windstream. Will the remaining company really want to keep the entire company structure needed to take care of copper customers? That’s not only technicians in trucks, but it means somebody to man the central offices, somebody to field customer service calls, somebody to take technical service calls and dispatch repairmen.

I have a hard time picturing a telco willing to retain all of these functions to care for a fraction of their previous customers and for a shrinking customer base. This would also mean having to keep technicians who understand copper. I already know that all big telcos have lost most of their experienced copper technicians to retirement. I have a hard time envisioning technicians willing to go to work for a telco that only owns copper – there would be no upward mobility to learn newer technologies, and the job is guaranteed to end when the copper is eventually decommissioned. Does anybody really want to be a Lumen copper technician?

It seems buyers of fiber customers don’t want the hassle of buying the copper networks and then having to go through the process of disposing of the copper and disconnecting customers. It’s fully understandable that a company like T-Mobile wouldn’t want to take on that burden with UNITI. The FCC recently changed the rules to make it easier to dispose of copper customers, and as part of that order, the FCC overrode any state regulations related to disposing of copper customers. But the FCC did not eliminate all regulatory rules related to owning a regulated telephone company, and I’m sure that one of the  motivations for a company like T-Mobile not to take copper customers is to avoid getting dragged into that regulatory world.

Windstream and Lumen got some recent help from the FCC when it said that companies with copper networks can ‘grandfather’ their TDM products, meaning they don’t have to sell services to any new customers. While the FCC order didn’t use the term, this means the end of the carrier of last resort responsibilities for telcos.

I would not be surprised to see Lumen or other companies stuck with a copper-only network take the path of milking any remaining revenues from those customers, but doing nothing to retain or maintain the customers. For example, if a copper customer has a technical issue, they might be dropped instead of trying to fix the problem. This kind of approach would keep revenues for a while while eliminating most of the cost of keeping and operating a copper network.

The FCC’s Ability to Levy Fines

Today’s blog takes a deeper dive into the upcoming case at the Supreme Court concerning appeals by AT&T and Verizon over fines levied by the FCC. The original appeals followed an FCC finding that all three major U.S. cellular carriers were liable for violating customer privacy by selling access to customer location data. This data showed every place that a customer visited during the day, something that should make every cell customer uncomfortable. The FCC fined AT&T $50 million, T-Mobile  $80 million, and Verizon $47 million, with smaller fines against a few other carriers. The case at the Supreme Court looks specifically at the FCC’s ability to levy fines against the carriers for violating consumer privacy rights.

AT&T and Verizon appealed the FCC fines. Both companies were emboldened by two recent Supreme Court rulings that weakened the FCC’s authority. The first was Loper Bright Enterprises v Raimondo, which said that courts don’t have to defer to expertise at federal agencies when deciding lawsuits. The second case was SEC v. Jaresky, which said that federal agencies should give defendants a chance to have a trial by jury in a federal court rather than levying fines.

As usually happens with cases that make it to the Supreme Court, lower courts issued conflicting opinions about the FCC fines. The 5th U.S. Circuit Court of Appeals overturned the fines levied against AT&T, while the 2nd U.S. Circuit Court of Appeals upheld the FCC’s fines against Verizon.

One of the more interesting things about both appeals was that the carriers did not deny their bad actions – they had clearly allowed access to customer location data. Both appeals relied on the Supreme Court ruling in SEC v. Jaresky and argued that the FCC should have offered the carriers the chance to take the cases to court and hold a jury trial as an alternative to the FCC fines.

It’s clear that the carriers are trying to weaken or break the FCC’s ability to levy fines and are willing to go through this process as a way to avoid future fines. I find it unbelievable that the carriers would have chosen to take this specific case to a jury if they had been given that option. It’s impossible to seat a jury of people who don’t use cellphones, and I would wager that a jury would be unhappy that a carrier would sell the data to track them 24/7. It’s easy to imagine that a jury would assess damages much larger than the FCC fines if these cases had instead gone straight to court.

It will be interesting to see what the carriers do if they win this case. Winning doesn’t take them off the hook for selling customer data, and the cases would likely be remanded back to the FCC to give the carriers the option for a jury trial. As silly as it sounds, I’m dubious that, even with a second chance, the carriers would choose the jury trial. Again, the real goal of the carriers in this case is to weaken the FCC’s options in future disputes.

It will be unfortunate if the Supreme Court sides with the carriers and hobbles the FCC’s ability to levy fines. The FCC typically fines regulated companies for two reasons, for failing to comply with FCC rules or for abusing the general public. The first type of fines is generally relatively small and the big fines are saved for companies engaged in abuse and fraud of the public. In a recent action, the FCC fined Telnyx LLC for allowing foreign scam robocalls into the U.S. telephone network.

Protecting the public is one of the major roles of a regulatory agency. A policy shift that makes it difficult or impossible to hold large corporations accountable for abuses against the public would be a terrible outcome.