Category Archives: Regulation – What is it Good For?

The Challenge of Adding Fiber to Poles

On February 5, the FCC issued a Memorandum and Order related to a pole attachment dispute between Comcast and Appalachian Power Company (APCO). The Order was issued under the authority of section 224 of the Telecommunications Act, which gives the FCC the authority to “regulate the rate, terms, and conditions for pole attachments to provide that such rates, terms , and conditions are just and reasonable”. This order highlights the nuances of regulations that can make it a challenge to build new fiber. This particular case provides a cautionary tale that shows why it can be so hard to get on poles when working with an uncooperative pole owner.

Before discussing the FCC decision, let me review existing FCC pole attachment rules and processes that an ISP must follow to get onto a pole. Just starting the process of getting on a pole requires a well-defined step-by-step paperwork-heavy process that obligates both the pole owner and the attacher to take steps within specified time frames.

  • The ISP must formally request access to a pole. Every pole owner has a unique set of forms needed to make such a request. The request must be detailed and specifically describe the changes that are wanted, and the attacher often includes drawings showing the desired connection.
  • The pole owner then conducts a survey to determine if there are any issues involved in meeting the request. Some pole owners invite the attacher to participate in a physical survey.
  • If the pole owner accepts the request, it must provide an estimate of the ‘make-ready’ costs needed to accommodate the request.
  • If the attacher accepts the estimate, it must pay the make-ready costs upfront, and the make-ready work proceeds.
  • Finally, if the pole owner finds that the actual cost was higher than the estimate, the attacher can request a detailed invoice showing all of the costs.

The dispute in this Order arose over poles that APCO said needed to be replaced in order to accommodate Comcast. Comcast claims that many of the poles had preexisting violations of safety and engineering standards, and because of that, Comcast wanted to pay nothing for APCO to replace the poles. APCO wanted Comcast to pay the full cost of replacing the poles, which would mean that Comcast would be paying to fix problems caused in the past by other attachers.  As an aside, Comcast would be required to pay the full cost to replace a pole that didn’t have any safety violations, as long as the only reason for having to replace a pole is that there isn’t enough room to add the new fiber.

Comcast filed a formal complaint with the West Virginia Public Service Commission in May 2025. The Commission ruled in favor of Comcast and said that APCO unlawfully assigned costs to Comcast and also delayed the pole attachment process. Rather than comply with that decision, APCO appealed the case in July to the FCC’s new Rapid Broadband Assessment Team (RBAT). This was the first FCC case processed under the new RBAT appeal system. The parties entered into mediation, but failed to reach an agreement.

In September, APCO issued new rules across its pole network that require any attacher to pay 100% of the cost for a poles replacement, even when a pole has preexisting violations.  At the end of November, Comcast filed a complaint with the FCC that resulted in this Order. The FCC sided with Comcast and said that its rules had been clear for twenty years that an attacher is only responsible for the incremental cost of moving to a new pole when an existing pole is in violation of safety or engineering standards.

You might read this and view it as a victory for Comcast, but it’s really not. This process delayed Comcast by nine months, and this is one of the faster regulatory resolutions of a pole dispute I can remember. This case shows the challenge that any attacher faces when a pole owner elects not to follow existing pole attachment regulations. In this case, APCO wanted to charge Comcast incorrectly at the time of the application. APCO then ignored an order from the State PUC and took the issue to FCC arbitration, where it failed to come to a mediated agreement. Finally, Comcast had to appeal to the FCC for a resolution.

Most ISPs don’t have the budget or the legal resources to fight an issue like this through this maze of steps. A smaller attacher with a similar situation would likely either have to agree to meet the conditions of the pole owner, and pay far too much for the attachment, or it might instead elect to bury fiber to bypass the poles, also at an increased cost.

Most attachers also worry about getting into formal disputes with pole owners who can retaliate by making it more difficult or costly for other desired attachments. The FCC and States can pass as many rules and regulations as they want, but the pole owner still has the ultimate power to make life costly and miserable for an attacher. I don’t know if any amount of regulations can fix that.

The Telecom Act Turns 30

February 8 is the thirtieth anniversary of the Telecommunications Act of 1996. The legislation brought sweeping changes to the industry and was the impetus for me to start my consulting company in 1997. This blog includes some of my thoughts about the impact of the Act.

The Act was both overdue and premature. It was overdue because market forces had been creating pressure for rule changes since the divestiture of AT&T into the Baby Bell companies in 1984. The divestiture brought long-distance competition, but it was clear that the public wanted broader competition for voice service instead of only being bombarded by companies offering cheaper long-distance rates. The Act held out the possibility of real competition for voice services to the majority of the country.

In my opinion, the Act never unleashed the competition for telephone services envisioned by the authors of the bill. The Act did create a giant flurry of competitive activity as CLECs immediately sprang into life to compete for voice services. Unfortunately, most of these new competitors ether resold telephone company products or relied on using unbundled network elements from telephone company networks to cobble together telephone services. I had an office near the DC Beltway, and in 1999, I probably had a dozen competitors visit my office trying to sell me an integrated T1 that combined voice and data that completely relied on the telco network. As might have been expected, the big telcos quickly adapted to the new rules and were highly successful in complicating the process for anybody trying to compete with them.

I say the Act was clearly premature because it did not anticipate the explosion of residential broadband that began only a few years after the ink was dry on the new law. The public interest in the Internet quickly swamped any public interest in voice competition. The bundled T1 product being sold to businesses became quickly obsolete when DSL and cable modems brought faster broadband for a much lower price. The introduction of cheap broadband was a major factor in the collapse of the giant voice CLECs, which crashed and burned in the big tech collapse that peaked in 2001.

Because the Act did not anticipate broadband, the launch of DSL and cable modems was almost totally unregulated because Congress didn’t have an appetite for tackling the complexities of an update to the Act so soon after the 1996 Act. The giant broadband providers quickly solidified behind the concept of light-touch regulation to stave off any attempt to regulate the new broadband industry.

The Act didn’t address two issues that still plague the telecom industry today. The first is market concentration. The Act hoped to create an environment that fostered widespread facility-based voice competition. The advent of broadband made the whole industry forget about voice competition. It became quickly clear that the largest telcos and cable companies were going to snag the vast majority of broadband customers in the country. Competition between telcos and cable companies started on an even footing in 2000, but as cable company technology advanced faster than DSL technology, the cable companies became virtual monopoly broadband providers in their markets, and used that strength to force customers to buy bundles of broadband, cable TV, and telephone. Only after several decades are we finally seeing fiber overbuilders and FWA cellular broadband bringing true competition to cable company monopolies.

The Act also did nothing to tackle the second issue that has plagued the broadband industry since the beginning – the uneven and inequitable distribution of broadband technology. Rural areas fell behind urban broadband almost immediately. We still haven’t brought broadband to a lot of low-income MDUs in cities. While the FCC was tasked by the Act to make sure that rural markets had the same opportunities as urban markets, the agency has never done more than pay lip service to that obligation.

Perhaps one of the biggest failures of the 1996 Act is that it implicitly assumed that specific services are closely linked to specific infrastructure. This led to the bizarre situation where voice over copper remained regulated while VoIP over other technologies was not. Cable TV over coax stayed regulated, while streaming video over other technologies was not.

You’ll probably be seeing a bunch of articles that look at different consequences of the 1996 Act. In my mind, the Act was a success in that it shook up the heavily regulated and staid incumbent telephone companies. But the Act was also a failure since it allowed telephone companies to easily do end runs around the rules create by the Act. Ultimately, the Act fell far short of the intent the goals for those who wrote it.

BEAD Non-deployment Complications

The NTIA should be getting close to approving all of the state BEAD initial grant proposals. Once that has been done, one of the last big steps will be for NTIA to announce how States can receive and use the BEAD non-deployment funds. When NTIA initiated the Benefit of the Bargain rules, the amounts of BEAD allocated to infrastructure plummeted, and the non-deployment funds mushroomed to over $20 billion, almost half of the original $42.45 billion BEAD funding.

NTIA will hold a listening session soon to hear ideas from State Broadband Office on how they would like to use the funding. Most States had specific proposals for using the funds, but States may not have specific plans for the increased amounts of non-deployment created by the Benefit of the Bargain changes.

The nondeployment process got complicated when the White House issued an executive order that said that NTIA “must provide that States with onerous AI laws … are ineligible for non-deployment funds, to the maximum extent allowed by Federal law.”

A number of State Attorneys General have expressed a willingness to sue NTIA should they be denied non-deployment in general, but also specifically if they are denied because they have state AI regulations. There is a great article, written by Lawfare, on the legal issues involved if this issue is taken to court. The article concludes that States have a great argument to question if NTIA or an executive order can overcome the intent of Congress when it passed the original BEAD rules.

One interesting observation in that article is that the White House is relying on a claim that State AI regulations may harm the development and deployment of AI. The argument is that AI applications drive demand for the Internet, so any State regulations that threaten the use of AI also threaten the value of BEAD-funded infrastructure. If that line of reasoning is deemed to be valid, it would imply that NTIA could withhold funding related to any other web applications that uses a lot of broadband.

The AI issue got more interesting when 22 states and the District of Columbia filed comments with the FCC in December that ask that the agency to not preempt any State AI regulations. While many of the States in the filing are blue, the filing included Arizona, Tennessee, and Utah.

The final interesting aspect of the issue is legislation introduced by two republican Senators, Roger Wicker (R-MS) and Shelley Moore Capito (R-WV), titled the SUCCESS for BEAD Act. The legislation is viewed as a way to negate the Executive Order and would require States to receive full funding and to distribute non-deployment funds through a competitive subgrant process. This would require grantees to provide a 25% match. The non-deployment funds could be used for six purposes: infrastructure improvement in rural areas, the enhancement of public safety and/or national security, network resiliency and cybersecurity protections, federal or military facilities, improving network latency, and the advancement of AI and related technologies.

Meanwhile, NTIA is still referring to non-deployment funds as savings, although there has been an acknowledgement that some of the funds should be distributed to States. I suspect that if NTIA does anything less than full distribution of all of the funds, we’ll see some combination of legislation and lawsuits to gain access to the funds.

Supreme Court Examines FCC’s Ability to Fine

The Supreme Court has accepted a case that will determine the FCC’s ability to levy fines against the companies it regulates. The lower court cases that brought the issue to the Supreme Court come from fines that the FCC levied against AT&T, T-Mobile, and Verizon after the companies sold customer location data. The FCC said that the carriers did not properly vet the companies that bought customer data, and that many of those companies widely resold the data.

The Fifth Circuit Court sided with AT&T and said that the FCC’s process was unconstitutional. The Second Circuit Court sided with the FCC when reviewing the Verizon fine. The DC Circuit also sided with the FCC when reviewing the fine against T-Mobile.  As often happens when lower courts issue conflicting rulings, the Supreme Court has agreed to review the findings of the lower courts.

The Circuit Court cases invoked a Supreme Court ruling in 2024 in the case of SEC v Jaresky. In that case, the defendant was accused of committing fraud and misrepresenting himself to investors. The Securities and Exchange Commission fined Mr. Jaresky $300,000 and ordered him to disgorge the unlawful profits he made of $685,000. Mr. Jaresky appealed to the Supreme Court and argued that the SEC didn’t have the regulatory authority to directly fine him, and that the SEC had violated his right to a jury trial.

The Supreme Court surprisingly sided with Jaresky and ordered that he should have been given the option for a jury trial rather than a trial by an SEC administrative judge. It was obvious after the Jaresky ruling that companies that were fined by other regulatory agencies would make the same claim if they were denied the right of a jury trial. In this case, the three cellular companies made the argument that the FCC fines were unconstitutional and got contradictory rulings from different lower courts. It’s fairly obvious that the carriers went to different courts hoping for conflicting rulings.

This is a major case for the FCC, since a ruling against it eliminates its ability to fine regulated companies for violating FCC rules. The ability to levy fines has always been one of the agency’s most effective enforcement tools and is one of the few remedies that is less drastic than yanking an FCC license to operate. The FCC has been using fines a lot recently in its attempt to cut down on robocalls and texts. The FCC will become a fairly toothless regulatory agency without the ability to levy fines. Carriers, both large and small, will be less afraid to violate FCC rules if they don’t fear that their violation would warrant a referral to the Justice Department.

This is a really interesting tactic by the cellular carriers. If these particular cases had been referred to a jury instead of an administrative judge, it’s not hard to imagine the fines being a lot larger. It’s not hard to imagine a jury that doesn’t like the idea of a giant corporation selling data that shows everywhere they travel with their cellphone.

This also opens up the possibility of State regulators tackling these kinds of issues and issuing fines if the FCC finds itself unable to do so. I have to think that selling customer data violates the law in multiple states.

If the Jaresky case is the precedent, then it’s hard to think the Court won’t side with the carriers and rule against the FCC. This Supreme Court seems to be very much against what they view as regulatory overstepping of authority, and the Jaresky case is only one of their rulings that are weakening federal regulatory agencies.

2026 Urban Rate Study

One of the more curious undertakings done by the FCC every year is the Urban Rate Study. This is an exercise undertaken every year to determine the highest monthly broadband rates that can be charged by ETCs (Eligible Telecommunications Carriers). This basically means regulated telcos and other ISPs that participate in some grant or subsidy programs. At a minimum, these rate caps apply to incumbent rate-of-return telephone companies, and ISPs that participated in the Rural Broadband Experiment, CAF II Phase II Auction, RDOF (Rural Digital Opportunity Fund Auction 904), and Enhanced A-CAM. These rate caps will apply to any BEAD winners that are certified as an ETC. These rate caps also apply to any ISP that voluntarily became an ETC in order to participate in any other subsidy program, such as the Universal Service Fund.

The FCC publishes this rate near the end of each year, and by July 1 of the following year, every ETC must certify to the FCC that it doesn’t charge a rate higher than the benchmarks.

 The FCC determines rate caps for an interesting mix of speeds that match the minimum speed goals set over the years for different subsidy programs. The FCC samples actual rates in the market and sets the target rates by applying two standard deviations. The FCC also sets the minimum size of any rate cap, and for 2026 has raised any monthly rate caps to provide at least 800 megabytes of data as of July 2026.

Below is a table that compares the 2026 rates to the rates from the Urban Rate Study in 2019.

It’s interesting that the maximum rates allowed for slow speeds have increased significantly between 2019 and 2026. The FCC rate caps for speeds of 100 Mbps or greater have decreased since 2019. I think this is because gigabit rates were somewhat rare in 2019, and some ISPs that offered gigabit then charged a premium rate.

It’s commonly believed that the FCC is not in the ratemaking business, and for broadband, I think this is the agency’s only ratemaking role.

I’ve seen ISPs with rates higher than these benchmarks, but those ISPs are not regulated ETCs. I doubt that consumers are comforted by these rates, and luckily, market competition has pushed rates lower than everything in the table for most ISPs.

Cell Tower Regulation Changes?

Cellular carriers seem to be on a winning streak with federal regulators. In the Big Beautiful Bill last year, cellular carriers were able to insert language in the bill that mandates the FCC to auction 800 MHz of mid-range spectrum. That’s going to force the FCC to carve the spectrum from other uses, and it seems likely that most spectrum that goes to auction will be won by the big cell carriers.

Late last fall, the FCC opened a Notice of Inquiry (NOI) Eliminating Barriers to Wireless Deployments. In the NOI, the FCC asked the following questions.

  • Should the FCC establish a new set of shot clocks that cover permitting and construction of wireless towers and other wireless infrastructure?
  • Should the FCC consider a “deemed approved” rule that would mean that any proposed new tower project would be considered as approved if a local government doesn’t approve the project within a specified time frame?
  • Should the FCC preempt local governments from setting fees related to permits, rights-of-way, and construction processes, and should the FCC set national fees for these efforts?

As someone who has read a lot of FCC documents, the tone of this NOI suggests to me that the FCC has already largely determined what it is going to order related to the shot clock and fees. It looks likely that the cell carriers will likely achieve another big win on their regulatory wish list.

The NOI also seeks comments on a wide range of other questions:

  • Can localities reject a tower request for a carrier that will be providing interstate services?
  • The FCC is thinking about relaxing the rules for concealment elements, which is the process of hiding towers or disguising them to look like trees of other objects.
  • The FCC wants to make it harder for localities to disallow modifications to existing towers.
  • The NOI explores the definition of a macro cell site in relation to existing rules related to small cell sites.
  • The FCC asks if it can limit the ability of a locality to reject a tower application based on aesthetics.
  • The NOI asks if local franchise agreements that involve in-kind contributions are a violation of Section 253 rules.

The NOI saw over 4,000 public comments. AT&T, T-Mobile, and CTIA, the lobbying group for the cellular carriers, were in favor of what the FCC is proposing, while almost all of the other comments were against some or all of the FCC proposals.

A lot of the comments involved those that want local communities to have some say in the placement of towers for health reasons. Traditionally, these folks have an uphill battle since the Telecommunications Act of 1996 and other FCC rulings have made it hard for the FCC to consider “environmental issues’ related to cell site placement. But I read last week that HHS Secretary Robert F Kennedy Jr. supports the idea that there are health risks from cell towers, so perhaps this now has some chance.

There were also comments from local governments and groups like the National Conference of Counties NACo), the United States Conference of Mayors (USCM), the National League of Cities (NLC), and the National Association of Telecommunications Officers and Advisors (NATOA) have all filed comments that disagree with allowing the FCC to override local authority. The comments from these groups asked the FCC to:

  • Preserve local aesthetic and placement authority.
  • Recognize that local governments are entitled to compensation which reflects the full costs of wireless deployment, not an arbitrary national assessment of what costs “should” be.
  • Reject the creation of a “rocket docket”.
  • Reject premature preemption of state and local AI regulations.
  • Facilitate industry and local cooperation rather than heavy-handed federal mandates.

I do fine it curious that an agency that is working feverishly to eliminate regulatory requirements won’t hesitate to create new rules it likes.

 

BEAD Rule Changes for Permitting

NTIA issued new General Terms and Conditions dated November 2025 that include dozens of changes to the BEAD rules for recipients, but also changes that impact state Broadband Offices that have wider implications on States. I’m not listing all of the changes here, but there is a great summary of the changes done by the Benton Institute on January 14. This blog will look at the issues related to permitting that have repercussions far outside of the BEAD grant recipients.

In Section 13.D of the revised NTIA Terms and Conditions, State Broadband Offices (SBOs – which are described as Grantees by the NTIA) have a lot of major new obligations related to permitting.

SBOs must “establish procedures to ensure that broadband-related permit applications are promptly accepted, and requests are approved or denied within 90 days”.

In general, SBOs don’t hold a position of authority in State governments to impose rules on anybody other than recipients of grants. Permits for BEAD will mostly mean getting permits to build along existing roads. SBOs are going to have to agree to this requirement, but it’s hard to imagine how an SBO can impose rules for State roads, County roads, Township roads, Municipal roads, roads through Tribal lands, and the biggest challenge – roads passing through federal lands. The goal of getting permits completed within 90 days is great, but it’s hard to think that the small number of people working in SBOs even know the identity of the many permitting authorities in a state, let alone can have any influence, other than perhaps begging, to get BEAD permitting authorities to meet the 90-day deadline. An even bigger challenge is permitting on private land, since a lot of rural roads are privately owned. What can an SBO possibly do to influence private permits?

SBOs must assist “state and local authorities in establishing a single, dedicated point of contact, which has knowledge of the application and review processes, for broadband-related permits.

The key word in this requirement is ‘assist”. Assuming that States even want to go through this process, they vary widely in how this would be achieved. There are States where a Governor might be able to do this. There are States where a State Regulatory Commission might have the authority to tackle this. But in many States, this might require action for a Legislature. What happens in States that don’t undertake the formation of a single, dedicated point of contact?

SBOs must provide technical assistance to permitting agencies to ensure sufficient capacity (e.g., Master Agreement and Consultant Reimbursement Agreement templates, surge support for permit processing, etc.)

This recognizes that local governments often will not have enough staff to quickly process all of the permits required by a BEAD project. SBOs must develop template contracts that can assist a locality if it wants to get help to speed up permitting. But this doesn’t address the issue and time required by local governments when hiring outside vendors. It doesn’t address if a local government has a budget for additional help. Interestingly, this extra funding could come in some states from BED nondeployment funds, assuming there is enough such funding for the purpose.

SBOs must provide “deference to the construction techniques chosen by BEAD Subgrantees (without seeking to influence those decisions), absent any identified safety concerns.

I don’t know if anybody, except perhaps for big ISPs that might have suggested this language to NTIA, really knows what this means, other than allowing construction practices that would otherwise not be allowed by pole owners or by the governments who control the rights-of-way for buried construction. SBOs are being directed to turn their heads to what would normally be non-compliant construction techniques. I’m not sure how pole owners and rights-of-way owners will be expected to comply with this.

SBOs must maximize “streamlined processing through permitting by rule; batch processing of substantially similar permit requests; and waiving or expediting duplicative or burdensome broadband permitting requirements where possible.”

SBOs can certainly promote language that allows batch processing. But, related to the staffing issue addressed earlier, how might a County with little or no staffing be expected to comply with big batches of permits? Even more confounding, are SBOs expected to look at local rules for permitting across the state to identify the ones that are duplicative or burdensome – and what do they do when they identify such rules?

SBOs must follow “FCC rules regarding timelines, rates, terms, and conditions for access to municipally owned poles and conduit for broadband projects – including provisions in the FCC’s rules providing for “one-touch make-ready” and “self-help” – and requiring BEAD Subgrantees that own poles (including cooperatives) to comply with FCC rules across their footprint.”

Around 23 states and D.C. have decided to have their own pole attachment rules, something that has been allowed by federal legislation. While most of these rules are largely the same as the FCC rules, many differ in substantive ways. How can an SBO in a state with its own pole regulation somehow force the State to suddenly follow the FCC rules. The specific requirement cites self-help and one-touch make ready, which are some of rules where States have taken a decidedly different stance than the FCC.

Overall impression of these requirements. SBOs will clearly try to follow these requirements since they must agree to them before they get BEAD funding. But these rules create huge problems for SBOs that don’t have the authority and muscle to impose these rules on the rest of the State and on the many entities that are involved in permitting. To some degree, the severity of these rules, when judged against the practical chance of an SBO accomplishing them, seems like a tool for NTIA to be able to say that any selected State has failed its obligations. I assume that if NTIA tries to withhold funding to a State based on these rules that it will be sued, but that means BEAD goes on hold in that State, to the detriment of the many rural residents relying on better broadband. Interestingly, none of these rules hinders satellite BEAD winners.

State Broadband Regulation

The industry spends a lot of time focusing on potential federal broadband regulation, and bills introduced in Congress get a lot of press. It’s easy to forget that a lot of broadband legislation happens at the State level,

NCSL (the National Conference of State Legislators) tracks state legislation across the country and wrote an article summarizing state legislation related to broadband issues. 2025 was a busy year for broadband legislation, and there were over 600 broadband bills introduced in state legislatures, with 139 bills enacted into law. The article is a great resource for anybody who wants to dig deeper since it links to the enacted bills that are mentioned in the story.

Poles and Permitting

Seventy of the enacted laws established new state rules related to pole attachments and permitting. We’re likely to see a flurry of more laws in this area in 2026 since BEAD grant rules require states to approve or deny applications for permits on State highways and land be approved or denied within 90 days. The bills highlighted in the article include:

  • Idaho HB 180 requires public utilities to allow space on poles for broadband, cable and telecommunications equipment and allows the Idaho Public Utilities Commission to mediate if parties cannot agree on rates, conditions, and timing. The legislature thought this law was needed since municipal pole owners are excluded from federal pole attachment rules.
  • Indiana SB 502 adopts the timelines required by BEAD and also establishes a timeline for quick mediation of disputes.
  • Maine HB 559 gives more authority to towns over approving the building of new poles. The law allows smaller towns than previously to deny applications to build new poles as long as the reason for the rejection is related to public safety or welfare.
  • Colorado HB 1056 and West Virginia HB 3144 allows for automatic approval of specific kinds of applications for rights-of-way and permits for wireless infrastructure.

Critical Infrastructure Protections

There has been a major uptick in damage and vandalism to communications infrastructure in recent years that has resulted in serious network outages. State legislatures reacted to passing legislation that establishes or creates penalties for those who damage networks. I discussed this topic in several blogs this year, one that asks when network damage might be considered to be terrorism, and one that looks at the trend of declaring broadband networks to be critical infrastructure.

The article provides links to the text of approved legislation that have increased penalties for those who damage communication infrastructure, enacted by Alabama SB 54, Iowa HB 879, Kansas HB 2061, Kentucky SB 64, Louisiana SB 22, Montana HB 257, and West Virginia HB 3504. A few states went even further, and Oklahoma HB 2104 and Texas SB 1646 categorized damage to communications infrastructure as felonies.

Looking Ahead to 2026

It’s likely that there will also be a lot of new legislation in 2026. As mentioned above, States likely will tighten approval times for rights-of-way and permitting on state lands and highways to comply with BEAD. An area that is seeing a lot of discussion is data centers, and it seems likely that states will pass legislation that establishes rules related to the placement, energy use, and environmental issues related to new data centers. While not directly related to broadband, it seems likely that there will be a lot of new State regulations related to AI.

Some Hope for Non-deployment Funds?

There is still some glimmer of hope that states will see some of the BEAD non-deployment funds. I call it a glimmer of hope because the issue is far from settled.

In a December 21 online post, Commerce Secretary Howard Lutnick was still taking credit for having saved taxpayers about $21 billion through changes in the BEAD rules. He was responding to a Wall Street Journal editorial (Trump Unbreaks the Internet), that had praised NTIA Administrator Arielle Roth for the change in direction of the BEAD program. Secretary Lutnick said the Administration is fixing the broadband mess left behind by the Biden Administration and that Commerce has stopped funding broadband builds he characterized as “rip-off projects run by powerful lobbyists who are very good at getting grants and very bad at delivering results”.

In December, there was some movement by Congress to require NTIA to release the BEAD nondeployment funds. Senators Roger Wicker (R-MS) and Shelley Moore Capito (R-WV) introduced the Supporting U.S. Critical Connectivity and Economic Strategy and Security (SUCCESS) for BEAD Act that would require NTIA to disburse funds not used for infrastructure to the States. On December 23, Representatives Andy Barr and Hal Rogers, Republicans from Kentucky, introduced a matching bill in the House. These two laws just reinforce the rules in the original IIJA legislation that said that any of the $42.45 BEAD grants not used for infrastructure would still go to the States.

In early November, Arielle Roth characterized the nondeployment funds as savings in a speech made to the Hudson Institute, which signaled that NTIA didn’t want to send the money to States. However, in a forum at the Free State Foundation on December 2, Roth said she was “operating under the assumption that the states will get to use their BEAD savings. But again, nothing has been finalized.” She also said in that forum that  “any spending must produce real, measurable value, not duplicate investment the private sector is already making.”

Obviously, none of this makes NTIA’s intention clear for non-deployment funds. The issue is further complicated by an Executive Order from the White House that said that non-deployment funds can’t be flowed to States that adopt “onerous” restrictions on artificial intelligence.

NTIA has said that it will make a decision about non-deployment funds after it finalizes all of the BEAD infrastructure grants. As I write this blog, the BEAD plans of 39 states and territories have been accepted by NTIA, and the agency said it hopes to finalize the remaining plans in January.

It’s clear that earlier in the year, Secretary Lutnick intended to cut BEAD grants to claim savings on government spending. He said so many times, and is still referring to the non-deployment funds as savings.

I assume there has been a lot of lobbying on the topic from those in Congress and Governors. The House and Senate bills that require releasing the funds have been proposed by Republicans. Perhaps the pressure the lobbying for the funds is being effective since most of the large dollar amounts of nondeployment funds are in red States, including Texas ($2.04 B), North Carolina ($1.12 B), Georgia ($1.00 B), Missouri ($946 M), Alabama ($869 M), Florida ($869 M), Louisiana ($856 M), Arkansas ($692 M), Kentucky ($623 M), Tennessee ($609 M), Ohio ($517 N), and South Carolina ($510 M).

There is no way to know what the restriction on non-deployment due to AI will mean. A sizable majority of states either have already passed AI regulations or are considering them. Florida Governor Ron DeSantis reacted to the Executive Order by saying that Florida absolutely reserves the right to regulate AI, and I suspect a lot of state legislatures feel that way. I guess it will boil down to how NTIA interprets the term “onerous” regulation in the Executive Order.

The bottom line of all of this is that it’s clear as mud about whether States will see non-deployment funds, but the issue is not dead. We’ll probably know more by the end of the first quarter.

Congress Active with Broadband Bills

We’re near the end of the year, and Congress is recessed until the new year. That hasn’t stopped Congress from introducing interesting new bills related to broadband. Any bill introduced in the first year of Congress is not automatically carried over to the second year session, but I assume these new bills are meant for deliberation in 2026.

Support for Non-Deployment Funds. Senators Roger Wicker (R-MS) and Shelley Moore Capito (R-WV) introduced the Supporting U.S. Critical Connectivity and Economic Strategy and Security for BEAD Act. This legislation would authorize States to use any remaining BEAD non-deployment funds that were not used to build infrastructure. The bill directs NTIA to give these funds to States to support functions like enhancing public safety, improving network resiliency, strengthening national security, and developing a qualified workforce for emerging technologies. This is a major issue since non-deployment has grown to over 21 billion, which is half of the $42.5 billion BEAD funding.

To some degree, this law feels redundant because it reiterates the same use of non-deployment funds that was directed in the original IIJA legislation that created BEAD. The need for this bill is only an issue because NTIA has been referring to the monies not used for broadband deployment as ‘savings’, which they want to return to the U.S. Treasury. If enacted, this would be Congress’s way of emphasizing that it meant what was written in the original law. If enacted, it also means that a lot more of the BEAD funding could have been used to build fiber and other long-term technologies instead of going to satellite broadband.

Expand Mental Telehealth. Representatives Andrea Salinas (D-OR) and Diana Harshbarger (R-TN) reintroduced the bipartisan Home-Based Telemental Health Care Act. If enacted, the legislation would expand access to telehealth services, including mental health and substance use care. The legislation is aimed at rural Americans who have barriers to in-person care, especially for individuals working in the farming, fishing, and forestry industries.

The legislation would create a new grant program that would provide funding for mental health and substance use care for people living in designated Health Professional Shortage Areas. The grants would be managed by the Department of Health and Human Services in consultation with the U.S. Department of Agriculture. Funding could be used to expand telemental health services, including providing broadband access and devices to use telehealth technology. The grants would also explore the feasibility of expanding the program to in-person services. The bill authorizes $10 million in grants for fiscal years 2025 through 2029.

Sunset Section 230 Immunity. Senators Lindsey Graham (R-SC), Dick Durbin (D-IL), Chuck Grassley (R-IA), Sheldon Whitehouse (D-RI), Josh Hawley (R-MO), Amy Klobuchar (D-MN), Marsha Blackburn (R-TN), Richard Blumenthal (D-CT), Ashley Moody (R-FL), and Peter Welch (D-VT) introduced the Sunset Section 230 Act. The legislation would repeal Section 230 of the FCC rules two years after the date of enactment. Section 230 was created in 1996, as a part of the Communications Decency Act. The purpose of Section 230 is to grant limited immunity to online platforms for user-generated content. Section 230 also shields online platforms from any damages from good-faith efforts to moderate or block objectionable content.

The stated purpose of the new legislation is to allow the public to hold platforms accountable for allowing illegal content, child exploitation, and misinformation, based on the underlying premise that the big web platforms currently have near-immunity for damages that arise from their “profits over people” operating model. This is going to be a controversial law, and opponents of the legislation argue that the law will stifle free speech, force platforms to over-censor to avoid massive lawsuits, harm small online platforms, and fail to address underlying issues of harmful content amplification by big tech.