Category Archives: Regulation – What is it Good For?

New Rules for FCC Maps

At the end of April, the FCC released a Report and Order and a Notice of Proposed Rulemaking related to its broadband mapping processes. There are no earth-shattering changes in the order and this is part of the ongoing process of finetuning the FCC broadband maps.

The following are the changes that were ordered:

  • The FCC ordered that the definition of broadband be the same for the BDC map collection process as the Form 477 process where ISPs and carriers report customers. Currently, there are some types of customers included in the BDC maps that are not included on the Form 477.
  • The FCC is eliminating the process, where an ISP or carrier must be notified of challenges to the map fabric and given a chance to respond. The map fabric is the database of potential customer locations. Eliminating this extra step will hopefully speed up the process of implementing challenges to the fabric.
  • The FCC shifted the responsibility to the FCC staff (or its mapping vendor) to remove demonstrably bad data from the BDC maps rather than requiring the ISP or carrier to make changes.

In the Notice of Proposed Rulemaking, the FCC asked for feedback from the industry on a number of questions:

  • The FCC asks about changing the map restoration This is the process where ISPs or carriers can reenter data into the FCC maps that was removed due to map challenges or other FCC actions. We now know that a lot of changes were made to the maps as a result of the BEAD map challenges, and the FCC is asking if there can be a simpler process for ISPs or carriers to fix the maps.
  • The FCC asks if it should eliminate the requirement for ISPs to report “grandfathered” broadband coverage, meaning locations where maximum download speeds are slower than 25 Mbps.
  • The FCC also asks about eliminating the requirement to report 3G cellular coverage.
  • The FCC asks if the rules for fixed wireless reporting should be changed when reporting the ‘buffer size’, which is the maximum distance an ISP wants to claim to be able to provide service from a tower site.
  • The FCC asks if it should change or relax the assumption that fixed wireless providers should assume the height of a customer receiver at a height no higher than 7 meters.
  • The FCC currently requires BDC providers to retain all of the backup for reported data for three years, and it asks if that should be something different.
  • The FCC is seeking comments on changes that would speed up and streamline the map challenge process. There are questions related to individual map challenges, bulk challenges, and crowdsourced challenges.
  • The FCC asks if there are needed changes to the mobile verification and audit processes.
  • Finally, the FCC asks if certain kinds of data should automatically be considered to be confidential, rather than requiring ISPs and carriers to seek confidentiality with each data submittal.

Proposed New Rules for Federal Grants

The Office of Management and Budget has proposed new rules for the Guidance of Federal Financial Assistance. These proposed rules would apply to a large percentage of federal grants awarded to States or directly to grantees. In the broadband world, the new rules would apply to grants made by the FCC, NTIA, U.S. Treasury, and the USDA. They would also apply to any secondary grants made through states, such as state broadband grants made using underlying federal funds. That means these rules impact BEAD, RDOF, ReConnect, Capital Project Fund grants, and the various NTIA broadband grants. The new rules would also apply to any payments made from federal programs to the public, which are not strictly considered as grants, such as E-Rate payments made to schools and libraries, and Lifeline payments made to reduce broadband bills.

This blog covers a few highlights of the proposed changes. For more details, see this comprehensive summary created by the Benton Institute. Comments on the proposed rules are due by July 13. The new rules are proposed to go into effect on October 1, 2026.

The new rules are intended to meet three objectives. This supposedly will improve transparency, accountability, and oversight. OMB says the changes will reduce recipient burden. Probably most importantly, OMB is taking charge of grants, and what the agency used to issue as guidance will now become binding regulation.

The following are some of the most important changes that could affect broadband:

  • One of the most consequential proposed changes is that the new rules expand the ability for federal agencies to cancel a grant mid-stream. This would apply to all discretionary grants (which are grants where a federal agency chooses the grant winners). There is a carve out and special rules for BEAD, for the CHIPs Act, and for block grants, formula grants, and disaster recovery grants. This is a huge change, because it means the federal government can stop a broadband infrastructure grant at any time – making it even riskier to take grant funding.
  • There would no longer be any fixed amount awards, and all grant expenditures have to be substantiated by invoices.
  • All grant recipients would have to participate in the E-Verify system, which would mean verifying the eligibility of employees and all subcontractors for receiving payments from federal funds. This new requirement also seems aligned with the new requirement that no grant funds can be used to reimburse payments to any person or company from a “covered” country, meaning countries on a list of countries that can be changed at any time.
  • The new rules completely eliminate any grant provisions that would promote DEI (diversity, equity, inclusion, and accessibility) based on race or sex.
  • Agencies and grant recipients will be expected to ensure that federal grant funds are not used to promote or support “theories of disparate-impact liability”. In plain English, that means grants can’t be used in a way that results in any discrimination by race, sex, or other protected characteristics. Grant recipients are also not to discriminate on the basis of “viewpoint, content, or subject matter of speech”, including political, ideological, or religious affiliation.
  • The new rules add a new layer of bureaucracy by requiring that every grant be approved by a senior political appointee. All grant awards are also expected to demonstrably advance the President’s policy priorities.
  • All else being equal, grants should be awarded to entities with the lowest indirect cost rates.
  • Pass-through entities (like a State Broadband Office) must ensure that grant recipients do not take actions that could damage the reputation of the grant pass-through agency or the federal government.

What are the practical results if these changes are implemented? While one stated goal is to reduce the burden on grant recipients, these changes would significantly increase paperwork. The proposed rules also increase the risk of accepting grant funding since a grant can be canceled at any time for violating the new political and social grant rules. Probably the most insidious proposed rules are that grant awards would have to pass several political sniff tests to be awarded, rather than being made on merit.

The big picture is that this is a clear attempt by OMB, which is part of the Executive branch, to take over the grant process. The vast majority of grants are created by federal legislation, and this would allow the executive branch to override grant rules created by Congress.

Sunsetting the High Cost Fund

SpaceX recently filed comments in the FCC’s open docket looking at the Universal Service Fund (USF) with a recommendation that the FCC should sunset the High-Cost Fund and eventually eliminate it. This is one of the four major components of USF, with an annual budget of $4.5 billion.

SpaceX argues that Starlink has now solved rural broadband connectivity issues with ubiquitous broadband available throughout the country. SpaceX argues that ongoing subsidy payments to support rural voice and broadband networks are no longer needed.

To put the SpaceX comments into perspective, let me start by reviewing the stated goals of the High Cost Fund:

  • Preserve and advance universal availability of voice service.
  • Drive universal availability of modern networks capable of providing voice and broadband service to homes, businesses, and community anchor institutions.
  • Drive universal availability of modern networks capable of providing advanced mobile voice and broadband service.
  • Ensure that rates for broadband and voice services are reasonably comparable in all regions of the nation.
  • Contain administrative costs and minimize the universal service contribution for consumers and businesses through efficient, effective program management.

The High-Cost Fund is the home to a multitude of different subsidy programs:

  • It’s the home of six different Connect America (ACAM) funding mechanisms.
  • This fund is still making the annual subsidy payments for RDOF, which were spread over ten years.
  • The fund has separate funds to support Alaska, Puerto Rico, and the US Virgin Islands.
  • The fund includes the Mobility Fund that pays subsidies to cellular carriers that operate in very rural markets.
  • There are also legacy funds that provide subsidies to regulated telcos operating in high-cost markets.

SpaceX’s recommendation to sunset the various programs refers to the fact that many of the subsidy programs will expire if not renewed. For example, RDOF payments end after the tenth year of payments.

This is not a surprising recommendation. SpaceX and Starlink have been claiming in other forums that satellite broadband technology has solved the universal service problem and that everybody in the U.S. now has access to broadband. That’s been a problematic argument to some extent, since Ookla has been reporting a lot of Starlink speed tests below the FCC’s definition of broadband of 100/20 Mbps. Ookla reported earlier this year that average Starlink speeds had exceeded the 100 Mbps download test and recently reported that Starlink is close to meeting the uplink speed threshold.

However, there is still one troubling aspect of declaring Starlink to be a universal solution everywhere, which is the affordability issue. It’s hard to argue that a product priced at $120 per month, and which requires the purchase of the receiver, is affordable for low-income households. However, there has been no federal effort to define an affordable broadband rate. In the early days of BEAD, before the Benefit of the Bargain changes, various State Broadband Offices around the country were considering a definition of affordable rates between $30 and $50.

There has been a lot of criticism of some of the High-Cost Fund programs over the years. I wrote many times about the ludicrous billions of dollars paid to the largest telcos in the CAF II program that required that rural broadband speeds be increased to 10/1 Mbps – with payments that started months before the FCC raised the definition of broadband to 25/3 Mbps. But there has also been a lot of demonstrable benefits from some of the programs. You don’t have to look much further than the fiber networks built by numerous rural electric cooperatives that were jump-started with the RDOF subsidy.

Extension of Capital Project Fund Grants

There is a glimmer of hope that ISPs that won state grants that were funded from the Capital Project Fund (CPF) can get an extension of six months to complete grant construction.

The Capital Project Fund was created by the 2021 American Rescue Plan Act (ARPA) and provided almost $10 billion to states and territories for making broadband-related grants. The program was administered by the Department of the Treasury, which gave block grants to States. Each State then made awards through State Broadband grant programs to ISPs. I’ve seen estimates that CPF grants have funded projects to bring new broadband infrastructure to roughly 2 million rural passings. The grants could also be used to purchase devices like laptops and computers for qualifying households. The final approved use of the funds was to construct or improve physical community hubs where citizens can remotely access work, education, and telehealth services.

Many State grants awarded under this program have been constructed and up and operating. But as inevitable, some grant winner had delays and don’t expect to finish grant construction by the end of this year when the funding expires.

On May 6, the Department of the Treasury updated the Coronavirus Capital Project Fund FAQs. The update includes a process where some projects can get an extension to complete construction for six months, until June 30, 2027, under the following new rules:

  • States must make requests for an extension by July 31 of this year.
  • Extension requests are not generic and must be related to a specific project.
  • To be eligible for an extension, a project must have already made material progress toward completion. The project must certify that it can’t complete construction by the legislative end of the CPF program of December 31, 2026.
  • The reasons for the extension must be to extenuating circumstances beyond the grantee’s control. The FAQ lists eligible extenuating circumstances to include, but are not limited to, permitting or regulatory delays, supply chain disruptions, labor shortages, or severe weather events.
  • ISPs can’t ask for an extension for reasons like inadequate planning, project management deficiencies, failure to secure financing, or other avoidable causes.
  • Treasury is not obligated to grant the extensions and will review each extension request based on the specific facts and merits.

This is very good news for projects that were delayed by external events. For example, I know there are CPF projects in North Carolina that were significantly delayed due to Hurricane Helene. The State government here has already started the process of identifying projects that might benefit from the extension.

Note that not all state broadband grants were funded through Capital Project Fund dollars. For example, around $350 billion was given directly to state and local governments to meet infrastructure needs through the State and Local Fiscal Recovery Plan (SLFRF). This covered a lot more than broadband and could also be used for a wide range of infrastructure projects like dams, bridges, roads, etc. I’ve seen estimates that over $8 billion of this money made it into State broadband grant programs.

SLFRF is being administered by NTIA, and at this point, there are no announced plans for any extension of this funding, which expires on December 31, 2026.

Abandoned Rural Calls

I’m hearing an increasing number of stories from rural ISPs and telcos about voice calls that are not completing to their customers. People place a call to customers on a rural network and give up when they don’t hear the phone ringing at the receiving end of the call in a reasonable amount of time. The industry term for this phenomenon is an abandoned call, which generally occurs when the caller assumes the call didn’t work.

You might assume that this means that something is wrong with the PSTN (public switched telephone network) that is stopping calls from being completed. That would be a huge problem, and one that would also affect calls made to urban areas. From what I’m hearing, this is strictly a rural problem. The telephone environment has changed a lot over the years. Telephone calls today originate from a dizzying array of different sources. While people can still make phone calls from landline telephones and cellphones, they can also place calls from numerous online platforms, applications, and devices.

I think it is far more likely that this is happening for financial reasons and is related to the fees charged to terminate long-distance calls. Rural carriers still charge a fee, called an access charge, to terminate a long-distance call made into their local network. Access charges were created in 1983 when the FCC approved Part 69 rules that were put into place after the divestiture of AT&T into several regional Baby Bell telephone companies, with AT&T remaining as a long-distance company. Access charges were the mechanism by which long-distance companies compensated the telcos that owned the local infrastructure needed to reach customers and complete long-distance calls.

Access charges were originally fairly expensive, and I recall access charges in 1984 being around five cents per minute, even in some of the Bell companies. That may sound high, but at that time, most long-distance rates ranged between twelve and fifty cents per minute. Over time, The FCC forced a series of drastic reductions in access charge rates, and today the rate to terminate a call in urban areas is at, or just barely above, zero. The cost to terminate a call in most rural areas has been reduced to a small fraction of a penny per minute. Most people probably think that long-distance call are a thing of the past since they no longer pay by the minute to call, but long-distance is still very much real, and companies like cellular carriers charge customers a flat rate to cover the cost of the calls.

I think the resurgence of abandoned calls is due to least-cost routing. Anybody company with customers who originate calls, be that a telco, cable company, VoIP provider, or some online app, must pay to have that call terminated at the other end. This has historically been done by using long-distance carriers that carry the call between the call originator and the called party. However, there is an industry segment that few people know about. There are a lot of companies generically referred to as intermediate carriers that provide the function of carrying calls between carriers.

That’s where least-cost routing comes in. Long-distance companies use real-time software to determine the lowest cost to get a call completed. The long-distance carrier might deliver many of the calls using its own network. But it will hand calls off to an intermediate carrier that charges less than its own cost to complete the call. I think the dropped calls are happening because intermediate carriers also have least-cost tables, and they also hand off some calls to another intermediate carrier if that saves them money. This process is automated, and it’s possible for a call to be handed off multiple times to different intermediate carriers. Each transfer between carriers takes time, and the customer making the call abandons the call when nothing is happening.

The phenomenon of abandoned calls to rural areas is not new. This was an issue in 2017, and the FCC implemented rules from the Improving Call Quality and Reliability Act of 2017 (RCC). Those rules did not forbid using multiple carriers to route a call, but established regulations to ensure reliability and accountability, particularly to prevent rural call completion issues. In those rules, the originating carriers were held responsible for making sure that calls are completed. The rules required intermediate carriers that touch calls to be registered with the FCC, and it was forbidden to hand calls to an unregistered carrier.

The FCC needs to deal with this issue again, because something has broken down. There might be new, unregistered carriers in the mix. Or maybe AI is now involved and is making poor routing decisions. But it’s a problem that must be fixed. If not, rural residents won’t be able to receive calls, and rural businesses will be at a huge disadvantage.

NTIA Trying to Regulate Through BEAD

NTIA has circulated guidance to BEAD winners titled BEAD Subgrantees: Protect Your Rights. Most of the two-page document is fairly routine stuff, but it also includes a bizarre section discussing permitting. The overall tenor of the document is odd in that it invites an ISP to directly contact NTIA if it thinks the contract offered by a State Broadband Office contradicts NTIA policy.

The document starts with a reminder that States can’t engage in ratemaking and demand specific rates in a BEAD contract. NTIA’s position on the issue is not controversial since rate regulation was prohibited in the original IIJA legislation that created BEAD. What is unusual is to see NTIA making a big deal out of this topic. My guess is that the NTIA guidance is mostly aimed at New York, where large ISPs that won BEAD are also subject to a state law that mandates a cap of $15 per month for qualifying low-income subscribers. Perhaps NTIA is hoping to goad one of the large ISPs in New York to use BEAD as a chance to challenge the state law, although the Supreme Court has twice refused to accept challenges to the legislation.

The guidance also alerts ISPs that each state is required to create a permitting roundtable where ISPs that encounter delays in permitting can discuss delays and fees. NTIA also seems to be reminding ISPs that States are required to document any problems encountered in implementing BEAD projects in semi-annual reports.

Where I think NTIA went off the rails is a set of requirements related to permitting:

  • NTIA wants a 90-day shot clock for the approval or rejection of permitting requests.
  • Grant winners can demand a single, dedicated point of contact for broadband-related permits.
  • Permits must allow the construction techniques chosen by the grant winner.
  • Batch processing of permit requests must be allowed.
  • Grant winners must not be subjected to unnecessarily duplicative or burdensome permitting requirements.

I find these requirements to be odd since NTIA doesn’t have the regulatory authority to specify permitting rules. For the most part, States also don’t control permitting rules and processes, which are left up to local jurisdictions. It’s highly questionable in most States if the Broadband Office can even assert any real influence over permitting practices for State highways.

NTIA has no authority to demand a permitting shot clock. NTIA can’t mandate that localities accept construction plans from grant winners. For example, what if a grant winner wants to bury fiber one foot deep instead of the locally-demanded three-foot depth? There are plenty of localities that won’t allow large-scale construction using trenching with a backhoe to bury fiber. Many local jurisdictions might be skeptical of microtrenching. Most localities will expect BEAD winners to abide by the same rules that apply to other telcos and utilities.

The last bullet point might be the most troubling since nobody knows what a ‘burdensome’ permitting requirement is. Is NTIA planning to intervene in disputes over local permitting rules that a grant winner doesn’t like?

NTIA also wants States to agree that permitting fees must be set at an approximation of actual cost. This is something that Congress could tackle, but any federal law demanding this would be heavily challenged in court.

The requirement that will get the most pushback is the requirement that a grant winner that also owns pole becomes subject to state or FCC pole attachment regulation by accepting the BEAD grant. As a reminder, cooperatives and municipalities are not subject to most pole attachment rules. NRECA, an association of electric cooperatives, wrote this letter to Commerce Secretary Lutnick, warning that many cooperatives will walk away from BEAD awards rather than let themselves be subject to pole attachment regulations.

I have to wonder if any BEAD grant winner will actually complain to NTIA to try to get a State to enforce permitting requirements or fees. I have to think that a State’s reaction to such a complaint would be to put that grant project on hold until the issue is resolved, which could take years and could even run out the five-year BEAD timeline.

The funniest part about the drama related to permitting is that very few, if any, local rural jurisdictions will make it hard for BEAD winners to get permits. Rural counties want better broadband infrastructure, and most counties I know will bend over backward to speed up the process. These odd NTIA rules don’t address the real source of the real permitting problems, which are railroad crossings, bridges, and state and federal lands. I’m honestly scratching my head, wondering why NTIA wrote this guidance. But BEAD has been odd since the beginning, so I guess there is no reason to stop the oddness now.

Restart on Digital Discrimination Rules

On May 6, the U.S. Court of Appeals for the Eighth Circuit vacated the FCC’s digital discrimination rules. The discrimination rules were required by the Infrastructure Investment and Jobs Act (IIJA). The FCC took an interesting approach to the issue and defined discrimination in two ways. The FCC prohibited intentional discrimination – meaning that ISPs can’t have policies and practices that are clearly intended to discriminate against any portion of the public. The FCC also prohibited disparate discrimination, which measures discrimination by looking at the results of ISP practices in the market rather than trying to judge the intentions of ISPs.

As was expected for almost all FCC orders these days, ISPs quickly banded together and sued to stop the FCC order. The U.S. Chamber of Commerce brought the first suit in the Fifth Circuit Court of Appeals in January on behalf of big ISPs like AT&T, Charter, Comcast, T-Mobile, and Verizon. Twenty industry groups like NCTA, WISPA, ACA Connects, and US Telecom entered the fray, and the suits were eventually joined into one case in the Eighth Circuit.

The ISP industry threw a number of arguments against the wall, hoping one would stick. The primary complaint was that Congress didn’t intend to impose a disparate discrimination test, and that disparate discrimination is rarely applied anywhere in the regulatory world. The ISPs also argued that the FCC violated the major questions doctrine with its ruling. This concept was based on recent Supreme Court rulings that prohibit federal agencies from adopting regulations that have “vast economic and political significance” without clear authorization from Congress. ISPs argued that the FCC went further in its discrimination rules than was specifically authorized by Congress. Finally, ISPs said the ruling was too widely applied, and should only have been applied to last-mile ISPs, while the FCC rules applied to a wider market, such as MDU owners who provide broadband in their buildings.

The Court made a number of rulings. It said the FCC had overreached its authority since Congress had not explicitly allowed a disparate discrimination test. The Court also ruled that the FCC had exceeded its authority by applying the discrimination rules to entities other than last-mile ISPs.

The Court completely vacated the FCC’s 2023 discrimination order, which means it is the same as if it didn’t exist. The FCC is still obligated by the IIJA to implement discrimination rules, so we can expect the FCC to restart the process. Any new FCC proposed rules will undoubtedly acknowledge the Court rulings.

The natural question to ask is what the court order means in the market. There should be little immediate impact since the FCC’s 2023 discrimination rules never went into effect when they were immediately challenged in court.

There will be repercussions since the Court considerably weakened the 2023 FCC order by only allowing the intentional discrimination test. It seems likely that it will be nearly impossible to prove that an ISP intentionally discriminated against some subset of customers. The proof would have to be some sort of written documentation or public statement that proves the ISP’s intention to discriminate. The Court eliminated the disparate discrimination test, which is basically an “if it quacks like a duck, it is a duck” test. That’s the kind of test that has routinely been applied to housing discrimination complaints, as was ordered by the Fair Housing Act. The revised rules will also let landlords off the hook since they will not be subject to broadband discrimination complaints.

Top-to-Bottom Review of USF

FCC Chairman Brendan Carr has been promising a top-to-bottom review of the Universal Service Fund (USF), and on April 29, the FCC released a Notice of Proposed Rulemaking (NPRM) that looks specifically at the High-Cost fund mechanisms that provide ongoing subsidies to ISPs operating in very rural markets. The High-Cost fund is the USF program that most people in the country (and even the industry) don’t understand.

The High-Cost program was initially created to support rural telephone companies in rural markets with the highest network costs per customer. Over time, the subsidy transitioned to provide support for rural broadband networks. Subsidies are paid today through several mechanisms: Connect America Fund Broadband Loop Support (CAF BLS), High Cost Loop Support (HCLS), and the sunsetting Alternative Connect America Cost Model (A-CAM) I, Revised A-CAM I, and A-CAM II mechanisms. Each of these plans is available to a different set of telcos or carriers, and the rules for participating in these plans are written in legalese that would probably confound most readers.

This new FCC NPRM asks a lot of questions about High-Cost support, with an eye towards possibly radically changing the program. The specific areas of questions asked by the FCC include:

Is Change Needed? The NPRM asks if these programs should be modified. It offers three options for respondents: 1) update the mechanisms to reflect the current rural broadband landscape; 2) create a new fixed-support mechanism to replace A-CAM and the other subsidies, or 3) do nothing and let the current A-CAM plan sunset over time and disappear.

Types of Support Needed. The NPRM asks about the type of support that might be appropriate in different circumstances, such as when a carrier is already providing service in an area, when a competitor appears in a rural market, or when new broadband infrastructure is being brought to a subsidy area by BEAD or other funding programs.

Impact of Satellite. The FCC asks if there should be any recognition or consideration in the subsidy plans to recognize low-orbit satellites.

Deployment Obligations. What should a high-cost subsidy recipient have to do in return for accepting the subsidies in terms of constructing infrastructure or maintaining networks?

Extension of the Current A-CAM? The payments for the current A-CAM programs will sunset between 2026 and 2028. The FCC is asking if all of the various remaining plans should be put on the same timeline.

IP Transition. The FCC wants to know if there is a role for the Universal Service Fund to be used to encourage telcos and carriers to complete the IP transition away from TDM technology.

The FCC is also looking at the other parts of the Universal Service Fund. At the end of April, the FCC voted to implement an online competitive portal where ISPs can bid to provide broadband service for schools and libraries that qualify to participate in the E-Rate program. The stated purpose for going to an online portal is to reduce waste, fraud, and abuse.

In April, the FCC issued an NPRM that asks for feedback about the Lifeline Fund. Among the FCC’s proposals in the NPRM is to end the Lifeline subsidy for telephone-only service. The agency also wants to strengthen the use of the National Verifier database that verifies eligibility. The agency was prompted into action when it was alerted that $5 million in Lifeline funds had been distributed to carriers to support service people who had died.

Finally, in April, the FCC sought comments on the structure and operations of USAC, the non-profit agency that administers the USF.

The Push for Permitting Reform

There is currently a bill being considered in Congress that would mandate a new set of permitting requirements for wireless and wired infrastructure. The bill is H.R. 2289 – the American Broadband Deployment Act of 2025.

The bill first started with the goal of making it easier to get permits for BEAD and other federally grant-funded projects, but the bill has grown to encompass all local and state permitting for telecommunications infrastructure.

The heart of the changes that would come from the passage of the bill are as follows:

  • The legislation would create a shot clock from 60 to 150 days during which a state or local government must approve or deny a request for a permit to construct a wireless or wireline project. If the locality doesn’t respond in that time frame, the request is automatically assumed to be “deemed granted”.
  • The legislation would create similar shot clock rules for any carrier seeking a cable franchise.
  • The bill would eliminate the need for environmental impact studies or historic preservation reviews for any project not considered to be a major federal action under NEPA rules.
  • The law would make it easier to get permits on tribal lands.
  • The law would restrict permitting fees to recover only actual costs, instead of the traditional standard of reasonable costs.

Interestingly, the bill doesn’t address the biggest permitting issue in the rural areas where BEAD grants will be built, which is getting permits on federal lands. I’ve worked with a few ISPs where the process of crossing federal lands took almost two years. However, the law applies to state highways and state parklands, so it will be easier to build across a state park, but not a federal one.

The legislation doesn’t address the other issues with getting permits in rural areas. While I am sure there are exceptions, most of the folks I know who are building rural fiber projects tell me that most County governments invite them in with open arms. The rural permitting problems that cause the most delays and headaches continue to be crossing railroads and bridges, which are not addressed by the legislation.

As you might imagine, this legislation is being vigorously opposed by local governments, who say the new permitting preempts local authority over public right-of-way, zoning, and permitting. They argue that the restriction of using actual costs means they can’t charge enough to pay for the longer-term monitoring and management of granted rights-of-way.

The biggest local objection to the law is that this would severely limit the ability of local officials to regulate the placement, construction, and modification of cell towers. It would finally give cellular companies the ability to place towers in residential areas or near historic sites.

The legislation clearly reads like a wish list for the giant carriers and gives them the freedom to build what they want, where they want. The authors of the bill took a bill intended to make it easier to build grant-funded rural networks and applied it to the whole country. That feels like solving a relatively small rural problem related to speeding up grant construction as a pretext to apply a sledgehammer solution for all construction. The majority of broadband construction happens in cities and suburbs, not in rural America. Some of those places have complicated situations that should not be lumped together with rules aimed at speeding up rural grants.

I’m sure there will be ISPs and carriers that read this who can tell horror stories of why this is needed. But I also know folks who have built a huge number of rural projects where permitting from local governments was not difficult or expensive.

It will be interesting to see if this passes in Congress. There were several broadband-related bills that passed the House last week, and this bill didn’t make it yet. Every member of the House who votes for this is telling the local governments in their district that Congress knows more about permitting than the local folks who have been doing this forever.

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 categorical 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.