Category Archives: Regulation – What is it Good For?

Nondeployment Funds Still in Limbo

Arielle Roth, the NTIA Administrator, recently testified before the House Committee on Energy and Commerce. Before the hearing, Roth provided a written statement covering a range of the activities currently being pursued at NTIA. This includes:

  • The effort the NTIA is undertaking to help the FCC find 800 MHz of spectrum for public auction. This directive was mandated by the One Big Beautiful Bill. For those who might not be aware of the details of spectrum management, the FCC regulates spectrum used by the public, and NTIA oversees spectrum used by the government.
  • How NTIA is working with the standards bodies that are developing the specifications for 6G. This includes a forum hosted in March that focused on the supply chain issues for U.S. companies building advanced robotics, which I assume must somehow involve 6G.
  • Bragging about progress with universal broadband availability, stressing the role that satellite broadband plays in making broadband available everywhere. She is still touting how the BEAD Benefit of the Bargain rules lower costs to taxpayers. She said the average cost per BEAD location is $4,765. Illinois and California BEAD applications are still pending at NTIA, with the agency having the Illinois proposal for eight months.
  • How NTIA is enhancing public safety through approval of FirstNet and how NTIA got AT&T to agree to take $2 billion less in funding.
  • Finally, Roth talked about an initiative to reduce screen times for school students. It’s a topic I’m still trying to get my head around since I can’t see how NTIA, which is essentially the government’s IT department, has any role in this kind of issue.

There was one big item that was conspicuously missing from her written comments. NTIA is still deciding what to do with the $21 billion of BEAD nondeployment funds that are left after making grants for BEAD broadband infrastructure. This is by far the biggest dollar item sitting at the NTIA, and it’s curious that there was no mention of it in the written comments, since many members of Congress are highly interested in how and when this money will be used.

During her testimony, Roth said that BEAD nondeployment funds are still up in the air. To provide a little history on BEAD nondeployment funds:

  • The original BEAD legislation, passed back in 2020, said that permissible uses of nondeployment funds included digital skills training, telehealth and remote learning access, cybersecurity education, digital navigator programs, or direct subsidies to low-income homes.
  • Originally, twelve states were sure they would have money left over after infrastructure deployment, twelve were sure they would not, and the rest kept the door open to possibly having some nondeployment funding.
  • NTIA completely rewrote the BEAD grant rules in its June 2025 BEAD Restructuring Notice. Those rules greatly reduced the amount of money that would be spent on infrastructure (greatly increasing the nondeployment funds). That Notice made it clear that NTIA intended to redefine the ways that nondeployment funds could be used. After that Notice, Commerce Secretary Howard Lutnick began referring to BEAD nondeployment funds as a “saving” for the taxpayer, implying that the funds would be eliminated or greatly curtailed.
  • During the rest of 2025, as the country awaited the new rules related to nondeployment, a number of Senators, Representatives, and Governors from both parties pleaded with NTIA to release the funds.
  • In December 2025, Executive Order 14365 directed Commerce to withhold nondeployment funds from any states with “onerous” AI regulations and also gave NTIA until March to announce its plans for releasing the nondeployment funds.
  • In February 2026, Commerce Secretary Lutnick announced that Commerce had no plans to withhold nondeployment funds, and NTIA held two “listening sessions” to hear ideas on how to use the nondeployment funds.
  • In March, NTIA slipped the date for making a decision on nondeployment until June 2026. Throughout 2026, both Secretary Lutnick and Administrator Roth have occasionally referred to nondeployment as a savings for taxpayers.
  • During testimony in the House hearing, Roth said that she now expects the plans for BEAD nondeployment to be announced sometime this summer (which could be any time before September 21). Roth said that NTIA wants to get the guidance right and not rush through the process.

It’s anybody’s guess if nondeployment funds will ever be released. It’s now been 13 months since the NTIA changed the rules for nondeployment funds, and they are obviously in no hurry to see these funds ever get spent.

FCC Proposes New Permitting Rules

The FCC issued a Notice of Proposed Rulemaking titled Build America: Eliminating Barriers to Wireline Deployments. The stated purpose of the proposed new rules is “to cut red tape and excessive fees imposed by some state and local governments in the public rights-of-way for wireline deployments”. There are several important provisions in the new rules.

First, the FCC proposes a 120-day shot clock for local governments to approve a request for rights-of-way. If the local government doesn’t respond in that time frame, then the application is presumed to be approved. That may seem like a reasonable time frame when you first hear about. It doesn’t seem unreasonable to ask a local government to approve or reject a right-of-way request to build fiber on a single street or a small neighborhood. But consider if a fiber overbuilder requests rights-of-way for an entire city. Such requests are complicated. Such a request would include residential neighborhoods and business districts. A city would have to consider a lot of factors, like planned road relocations or rebuilds, other construction activity that is already occurring, and issues related to the condition of existing rights-of-ways that might already be overcrowded with other utilities.

The docket also proposes to limit fees to a reasonable approximation of the government’s actual, direct costs of managing the rights-of-way with respect to a particular application. This implies the FCC will only allow fees associated with establishing the original right-of-way and will not allow fees to cover some of the costs for managing the right-of-way over future years.

The FCC plans to establish safe harbor fees for rights-of-way. For those not familiar with that term, a safe harbor fee generally means a standard rate or affordable guideline. The problem with safe harbor rates is that they don’t recognize the difference between a right-of-way fee in a small rural town and one for the biggest metropolitan areas of a state.

The new rules will count in-kind compensation as part of any fee. Local governments often negotiate in-kind contributions with fiber builders. For example, they might grant a right-of-way and ask the fiber builder to provide a few free fibers to connect between government buildings. The FCC new rules will mandate that any such in-kind contribution be counted as part of the fee. That would mean putting a dollar value on the in-kind contribution and subtracting it from the fees. That may sound reasonable, but this is being done in the context where the local government has to prove its fees are cost-based while a fiber builder will not. I have many clients who have been handed inflated estimates from cable companies for providing short fiber routes.

Finally, the new rules will prohibit a local government from charging higher fees when the proposed infrastructure will support multiple purposes. An example would be a fiber route that is being built to bring fiber to a neighborhood and also serve a cell tower.

The most interesting thing about the docket to me is that FCC Chairman Carr said when he took the job that his philosophy was “light touch regulation”, meaning he didn’t foresee the FCC implementing a lot of new regulations. Instead, this and other FCC proceedings are adding a lot of new federal regulations. Many of the other FCC proceedings are similar to this one in that the FCC wants to wrest away any regulatory authority from states and localities and regulate everything at the federal level.

I’m sure that industry comments will include some horror stories from fiber builders about cities that have stonewalled new fiber construction or that charge a lot of fees. My guess is that these are the exception rather than the rule since most communities want more fiber and are willing to work with anybody willing to invest in their market.

The Future of State Broadband Offices

Kathryn de Wit and Jake Varn of Pew recently wrote an article that cautioned that States Must Consider Future of Broadband Offices. They note that some states have a sunset date embedded in the enabling legislation that will mean the end of State Broadband Offices if state legislatures don’t act.

I’ve also been thinking about this lately. States have been busy in recent years overseeing broadband grants that were funded by the Capital Project Fund. Many legislatures augmented those grants with funding from ARPA for additional grant funding. Both of those programs are finished this year, other than a few waivers to extend funding until July of next year. Before these two programs, the States oversaw the use of CARES Act funding, which was used for a wide variety of purposes. A handful of legislatures also funded broadband grants out of the state coffers.

Most States are busy right now trying to get BEAD grants in place with ISPs, although a few States have only minuscule outlays for BEAD. For unknown reasons, NTIA has still not agreed to the grants for Illinois and California. BEAD grant construction is supposed to conclude in four years, and States are on the hook to verify that construction meets the BEAD specifications.

There were two other sources of federal funding that were supposed to feed through the States. The biggest source is the BEAD non-deployment funds, which is whatever is left over from the $42.5 billion grant program after funding infrastructure. This was originally a relatively small amount, and in 2024, thirteen States told NTIA that they would probably have excess funding left over after infrastructure grants. However, when NTIA implemented the Benefit of the Bargain rules, it slashed infrastructure grants, and non-deployment has ballooned to over $21 billion. There is still no assurance that this money will ever be given to States to spend. NTIA has repeatedly pushed off the date when it will disclose the use of these funds. The U.S. Treasury continues to refer to these funds as net savings, implying they won’t be spent.

The other funding that is still up in the air is the $2.75 billion in grants that were funded by the Digital Equity Act. A lot of this funding was to be administered by the States to provide computers and training to take advantage of the new infrastructure being built through federal grants. The administration abruptly canceled this grant program, supposedly because it included the word equity in the title. The National Digital Inclusion Alliance (NDIA) sued the administration over the end of the grant. It’s possible that this funding still has legs. The DOJ told a court last week that the government might remove its objections to the grant program if all references to race were removed. But there is probably still a long road to seeing this funding since the administration’s proposed budget for next year eliminates these funds.

I have to wonder what happens to State Broadband Offices if non-deployment or Digital Equity Grants are never funded. They will be left overseeing the invoices for BEAD. States are on the hook to measure speeds on grant programs for another decade – but will that be enough to convince legislatures to keep funding broadband offices?

Some States will fund new grant programs to bring infrastructure to the places missed by BEAD. Wisconsin has already announced a new state grant program, and there will probably be another half dozen states that issue grants to continue to close the broadband gap. But a lot of States now believe they are mostly covered with decent broadband, and there won’t be any incentive for those States to continue to pay for a broadband office.

Pew suggests activities that broadband offices should pursue after BEAD. This includes setting broadband goals, collecting and mapping broadband data, and providing technical assistance to communities and stakeholders. I would extend that list to suggest that States focus on digital inclusion and affordability efforts to make sure that everybody can actually use the broadband networks that have been built.

But I have to wonder how much traction these goals will generate in States that are looking at meager and tight overall budgets in the foreseeable future. Is broadband going to remain enough of a priority at State legislatures to attract funding when so many other important functions are losing federal funding? Will States that think broadband has been solved care about maintaining a broadband grant office? We have to remember that, before the CARES Act many States did not have a formal broadband office. I suspect that when the sunset date hits for broadband offices, that some States will let the function lapse in favor of other priorities. I can’t see the States caring very much about NTIA requirements to measure broadband speeds for BEAD networks once those networks are funded and operational.

AT&T v. Duke Energy

On June 24, AT&T filed a complaint with the FCC against Duke Energy Carolinas about the rates being charged for pole attachments. AT&T alleges that Duke is charging rates far higher than allowed by law in North and South Carolina. AT&T claims it is entitled to pay “just and reasonable” rates under FCC rules. AT&T is asking that Duke be required to refund overcharges.

It’s an interesting complaint for several reasons. This is more of a partnership complaint than a straight complaint about how pole attachment rates are calculated. AT&T and Duke entered into a Joint Use Agreement (JUA) in 1978 since they share ownership of poles in the region. There are 457,901 poles covered by the JUA, with Duke owning 80% of the poles and the remaining 20% owned by AT&T.

One of the nuances of the case is jurisdiction over pole attachment regulation. North Carolina exercised  reverse-preemption of pole attachments, while South Carolina remains with FCC regulations concerning poles. AT&T claims the FCC has authority over the dispute in both states. I have to wonder why this agreement doesn’t fall partially under North Carolina’s jurisdiction, and if the state has somehow conceded authority to the FCC.

The dispute centers around FCC rules included in 47 U.S.C. § 224 that determine the maximum rate that can be charged for a pole attachment. Those rules calculate two different pole attachment rates, one that applies to cable companies and a telecom rate that applies to everyone else. The maximum rate for telecommunications carriers is designed to ensure that a telecom provider pays a proportional share of both the usable space and unusable space on the pole, divided by the total number of attaching entities. There are specific formulas defined by the FCC for the rate calculation, and calculating the maximum rate is mostly an exercise in gathering the right accounting data to populate the formula.

AT&T alleges that Duke is charging them a rate far in excess of the maximum allowed telecom rate. We can only guess how much higher since the public version of this complaint has redacted the higher rates. I can’t imagine how the public would be harmed by knowing the higher rates. There is a table in the complaint that calculates the average telecom rates from 2023 through 2026 at $10.92.

I characterized this earlier as a partnership dispute. AT&T is complaining that the rates that AT&T and Duke pay under the JUA are disproportionate to the amount of space each uses on the poles, such that AT&T pays far more than Duke on a per-foot basis. AT&T also complains that Duke benefits by being able to offset its costs by fees charged to other attachers, something not available to AT&T. Both of these sound more like complaints related to the old Joint Use Agreement that don’t seem relevant to FCC regulation.

AT&T’s argument is largely based on an FCC Order from 2018 that said that the telecom pole attachment rate applies to all new and newly-renewed joint use agreements, including agreements that are automatically renewed or extended.

You may be asking, if you read this far, why I chose to write about this dispute. There are several reasons. First, it’s always fascinating to get a glimpse behind the curtains of the deals made between big companies that we would otherwise never know about. I’m sure that a fiber builder asking to get on a Duke pole in North Carolina has no idea that the poles in question might actually be owned by AT&T. It’s also interesting to see how a big power company like Duke might decide to overcharge a partner in the pole business. The Joint Use Agreement was reached in 1978, which is ancient history in the corporate world. Somebody at Duke probably got a bonus for increasing pole attachment fees to AT&T in violation of an old agreement they might not even been aware of. Finally, I’m a customer of both Duke and AT&T, and regardless of how it resolves, I’m betting that I won’t see any benefit from the decision. This kind of dispute affects stockholder profits and not rates charged to the public.

Promises Made, Promises Broken

I noticed that the Charter/Cox merger has been approved by the FCC, the DOJ, and the Public Service Commission of New York. The final hurdle is the California Public Service Commission, where Charter is hoping to get a decision by August from the CPUC. In exchange for an agreement for the merger, Charter has promised to spend at least $275 million on network upgrades to achieve symmetrical gigabit speeds across its California footprint within three years. Charter also promises to offer a statewide low-income price plan for five years that includes a $20 plan for 100/20 Mbps speeds, and that would be free for Lifeline Pilot participants. Finally, Charter promises to provide $23 million in support to the nonprofit CETF (California Emerging Technology Fund) for digital literacy and device subsidies, plus $7 million to regional broadband groups.

I had a chuckle when I saw the promises being made by Charter. It reminded me of many times that carriers didn’t follow through on big promises made to regulators. One of the most memorable broken promises came from Verizon in Pennsylvania – a story that has been well documented in a book by Bruce Kushnick, The Book of Broken Promises: $400 Billion Broadband Scandal & Free the Net. In 1993, the State agreed to deregulate Verizon and provide big tax breaks as long as Verizon would deliver 45 Mbps broadband service to the entire state by 2015. By the early 2000s, Verizon reneged on the offer and reduced the promised speeds to 1.5 Mbps. Verizon eventually built FiOS fiber in selected urban and suburban markets and ignored the rest of the state. There were some rural Verizon customers who never even got the slow DSL.

In 1999, the two Baby Bell companies SBC and Ameritech, asked to merge. SBC promised regulators that the merger would spark a new, nationally competitive telecommunications carrier and committed to expand beyond its thirteen-state home region. Within a year of the deal closing, the FCC opened an investigation against SBC for failing to meet its competitive entry timelines and because of growing volumes of consumer complaints about declining residential service quality.

When AT&T asked in 2015 to acquire DirecTV for $48.5 billion, the company promised federal regulators to build out more than 12 million high-speed fiber connections. The company quickly fell short of that promise, and many believed that the company was faking fiber passings by counting apartment complexes that were near to its existing fiber network. AT&T eventually decided that building fiber was its best business plan, but it had totally blown off the 2015 promise.

When Charter asked to merge with Time Warner Cable in 2016, the company promised regulators that it would expand its network to unserved rural areas, that it would hold down prices, and would not implement price caps. By 2020, Charter petitioned the FCC to get off the hook for these promises and called them “unduly burdensome”

In 2020, when T-Mobile wanted to buy Sprint for $26 billion, the company promised it would rapidly expand rural 5G coverage. The company also promised to freeze post-paid rate plans for three years. Soon after the merger, the company said the agreement was no longer feasible.

I could fill a few pages with similar stories. Big carriers make whatever promises are needed to get approval for mergers or deregulation, and then typically proceed almost immediately to find ways to get out of what they promised. It’s hard to predict if California will approve the Charter/Cox merger. But I think California fully understands that promises made related to mergers are rarely promises fully kept.

FCC Questioning State Pole Regulation

The FCC issued a Public Notice with the longest title I can remember: Wireline Competition Bureau Reminds Reverse-preemption States of Obligation to Effectively Regulate Pole Attachments and Seeks Comment on Need for Changes to the Commission’s Certification Rules to Ensure Effective State Pole Attachment Regulation.

The Public Notice asks for comments on the effectiveness of regulations in States that have chosen to regulate pole attachments, meaning rules that regulate how telcos and others get access to poles that are in the public right-of-way. Comments are due on the Public Notice by July 13, 2026.

States were given the right to regulate pole attachments in Section 224 of the 1934 Communications Act. Twenty-three States have elected to regulate poles over the years, and the FCC has created regulations for the States that have not done so. In one of the oddities of regulatory language, States that have elected to regulate pole attachments are said to have “reverse-preempted” the federal pole attachment rules.

The Public Notice is seeking comments on whether States are properly regulating the rates, terms and conditions of pole attachments. More specifically, the FCC is asking what steps it could take to make sure that state pole attachment regulations are “transparent and effective”.

In strongly worded language, the FCC reminds States of the “obligation to effectively and clearly regulate pole attachments in their jurisdictions.” In what feels like a veiled threat, the FCC asks if it should require reverse-preemption States to refile new certifications for FCC review. This could present an opportunity for the FCC to refuse the certifications and take over the pole attachment rules. It will seem likely that there will be lawsuits if the FCC tries to take back jurisdiction of pole attachments, since the state’s right to regulate pole attachments is clearly stated in the Communications Act.

There is one annoying mention in the Public Notice that this is being done to protect the $42 billion BEAD program. NTIA’s Benefit of the Bargain rules cut the amount that will be used for infrastructure in half. Of the remaining BEAD awards, a lot will go to satellite, fixed wireless, or buried fiber construction that will not require the use of pole attachments. If only this was being done to protect $42 billion of infrastructure construction.

I also have to wonder about the timing of this. Many States are in the process of signing BEAD contracts, and some of the earliest steps for an ISP starting a new project is to immediately start the pole attachment paperwork process along with seeking rights-of-way. Even if the pole attachment rules could be better in some states, the FCC’s action would make more sense if it had been started a year earlier.

I think that it would be very disruptive if the FCC chooses to seize pole attachment regulation back from the states. At a minimum, in a state where the regulations reverted to federal authority, it seems likely that pole owners will take some time to fully digest and cope with the change, and to look at forms and processes.

I could be wrong, but this feels more like the FCC trying to take regulatory authority from States more than an attempt to improve BEAD. While BEAD is a large grant program, the many other grant programs in recent years have collectively funded more fiber than BEAD. My guess is that some States will fight to keep their own pole attachment rules, and any attempt to do this will result in a protracted court fight, and that BEAD will be in the rearview window before this is settled.

Walking Away from BEAD

NTIA has released all but four states to begin signing BEAD contracts with grant winners. Mississippi and Oklahoma have gotten final approval by NTIA but are waiting for approval from NIST. NTIA has still not approved the grant proposals from California and Illinois.

Now that the process of negotiating contracts for grant winners has started, news is seeping out of some grant winners backing out and refusing to accept the BEAD grant awards.

The largest BEAD award being rejected is by Astound in Texas, which is walking away from $166 million in grants. The company explained this by saying that it had only won five of the thirty-three project areas it had applied for, and that the remote geographic areas of the awards made no sense without winning more awards. I have to wonder if the company’s pending merger with Google Fiber also played a role in the company walking away. While it isn’t official, I’ve heard through the grapevine that Astound is also going to walk away from $112 million of BEAD grants in Oregon. The company has also tentatively won $100 million in Washington.

Another ISP walking away from a lot of awards is Resound Networks. Resound is walking away from $60.2 million in New Mexico, $23.1 million in Texas, $8 million in Kansas, $5.2 million in Arkansas, and $3.9 million in Colorado. The company also has relatively small grants in Arizona and Oklahoma. Resound is tentatively slated to win $34.4 million in California, which still has not been approved by NTIA.

There are three ISPs that haven’t signed grant contracts in Nebraska: Amazon, Northeast Nebraska Telephone Company, and Pinpoint Communications. I have to wonder what it means for a satellite company to not accept a grant, since the company has grant awards across the country.

There are bound to be other ISPs who will walk away that we haven’t yet heard about, since States have six months to get contracts from grant winners after the State signed a contract with NTIA for the BEAD money. I’ve been hearing about a lot of smaller ISPs that are still thinking about walking away from BEAD. Some will do so because the too-low grant funding means they can’t get a letter of credit.

It won’t be surprising if there are more rejections of BEAD. When NTIA initiated the Benefit of the Bargain rules, it significantly sliced the amount of grant funding per location. Many ISPs had said before Benefit of the Bargain that the long-term math for taking BEAD grants was marginal. That math took a big turn for the worse when NTIA forced the States to further lower the amount of grant awards. Any ISP that stays after the Benefit of the Bargain is accepting a smaller margin than they originally had hoped for.

At the same time that the amount of grant awards has been squeezed downward, ISPs are seeing inflation in the cost of fiber construction – inflation much higher than the rate of increase for the whole economy. The Fiber Broadband Association conducted a survey with members at the end of 2025 and asked about expected increases in construction costs for 2026. 88% of the respondents expected a cost increase for construction in 2026. 62% of respondents expected a ‘slight’ cost increase of less than 10%. 26% expect a cost increase of more than 10%. 9% expect costs to stay the same, and 3% expect costs to decrease by less than 10%.

It will be interesting to see how ISPs respond to this same question at the end of 2026. The industry is being pounded by increases in chip costs due to shortages as chip manufacturers have pivoted to building AI chips. Higher oil prices have affected the cost of shipping and operating work vehicles, and oil is a raw material component of things like fiber sheathing, conduit, and electronics housings. There is a lot of pressure this year from wage increases. The Federal Reserve made it clear last week that it will not be lowering interest rates this year and may have to instead increase them by year’s end.

We’re still seeing defaults six years after the initial RDOF awards, and I expect there will be ISPs that accept BEAD now but realize in a few years that they can’t make the math work.

I feel sorry for State Broadband Offices that are being asked to find replacements for ISPs that reject BEAD awards. It feels unlikely that NTIA will allow States to increase the size of the grant awards after a rejection. Every default could become a windfall for satellite companies, while a lot of communities are losing the chance to get fiber.

AT&T v. California

AT&T filed several petitions at the FCC asking the Commission to override regulations from the State of California. The State is forcing AT&T to maintain copper networks until such time that AT&T can offer the same services to customers using some alternate technology.

The FCC reacted by issuing two requests for public comments related to the AT&T petitions. In the first, the FCC asks for comments related to its ability to preempt California’s regulations related to copper networks. The second asks for public comments related to AT&T being able to walk away from carrier-of-last-resort responsibilities in California as it tears down copper networks.

These proceedings ask some interesting questions, although my hunch is that the FCC already plans to preempt California on these issues and is only going through the formalities first.

One interesting issue raised is whether the FCC can grab regulatory authority from a State. The historic framework for telecom regulation has always been that States are free to regulate anything that the FCC elects not to directly regulate. Back when AT&T was the primary telephone company, every state had numerous regulations related to telephone companies. The FCC established the big nationwide rules, often dictated by Congress, but the States were free to regulate anything the FCC didn’t directly regulate. This usually meant issues like consumer rates and customer service practices. As competition was introduced into the telecom market, AT&T and the various Bell companies were successful in convincing most states to relax regulations, and in some case telcos became almost totally unregulated. California eased some regulations, but still maintains a lot of regulation of telcos. It will be interesting to see how hard California will fight back if the FCC overrides the state’s regulatory authority.

Another interesting request is for AT&T to get out of carrier-of-last resort (COLR) obligations. The petition describes this as AT&T being relieved of ETC status (Eligible Communications Carrier), which is the formal process where states certified companies with COLR status. COLR is an obligation originally created by the Communications Act of 1934, and expanded by the Telecommunications Act of 1996, which said that regulated telcos are required to serve customers located inside their regulated service areas, with only a few exceptions related to customers in remote locations. Telcos have been obligated to connect new customers to the existing networks and to build new networks to meet new homes and businesses. This feels like a quaint concept today, and it’s one of the first things that disappeared as states deregulated telephone companies. I find it interesting that many telcos still have ETC designations and use that status to receive various kinds of universal service funding while only playing lip service, at best, to carrier-of-last-resort obligations. The real question being asked in the FCC proceeding is whether the agency has the authority to override any COLR obligation required by California.

I have to think that AT&T has already been ignoring this obligation for years in California. I recall news stories of AT&T discontinuing rural copper services in rural California with little or no notification to customers. I have to think that it’s been a long time since AT&T has built any new copper infrastructure to reach newly constructed homes and neighborhoods. But there are other obligations related to COLR and ETC status that AT&T would like to have preempted.

It’s going to be interesting to see who, other than regulators in California, responds to these dockets. These particular issues are largely already dead in most of the rest of the country, although some states still maintain greater levels of regulation over telcos than others.

These dockets don’t address the even bigger question, which is whether the state or federal government should be regulating telephone service at all. I think everybody is in favor of the FCC’s efforts to tamp down on robocalls and texts, but how much other regulation of traditional telephone companies is still needed?

What Happened to Spectrum Policy Debate?

There is something that has been nagging at the back of my mind for the last year. In the One Big Beautiful Bill, Congress ordered the FCC to auction 800 MHz of midrange spectrum. This is spectrum that is expected to mostly go to cellular carriers, although at least some will go to others. Since Congress’s stated goal is to raise $85 billion for the U.S Treasury with these auctions, it’s not likely that this spectrum will be priced low enough to be attractive to many users other than large cellular companies, and perhaps large cable companies and satellite companies.

The question that has been nagging me is whether the cellular industry really needs that much new spectrum. I acknowledge there is growth in cellphone data usage, but it is not growing at a rate that justifies the need for this much additional spectrum.

Instead, the new spectrum is needed to support FWA home broadband. At the end of 2025, OpenVault says the average home and small business broadband customer uses an average of 767 gigabytes of data per month. By contrast, the average cellular customer uses perhaps 25 gigabytes per month on the cellular network (most cellphone usage is on WiFi). This means that one FWA home broadband customer uses as much cellular network bandwidth resources as 31 cellphone customers. That may not sound significant, but consider that by the end of the first quarter of this year that AT&T, T-Mobile, and Verizon had collectively added 15.5 million customers to FWA, and have been steadily adding around 1 million more FWA customers every quarter.

All three carriers have plans to continue to add FWA customers. Verizon says its goal by 2030 is 8-9 million FWA customers, and T-Mobile’s goal is 15 million. AT&T hasn’t stated a goal, but it clearly is growing.

If we go back just ten years, there was absolutely zero conversation in the industry about using cellular spectrum to create a major broadband competitor. There was no discussion at any proceeding at the FCC of the need to enable new broadband competition using cellular spectrum. The cellular carriers have offered cellular broadband for many years through the use of hotspots, but hotspot plans were generally capped at a tiny levels of monthly usage, which differs significantly from FWA, which offers unlimited broadband.

The question that has been nagging me is whether FWA is really the right priority use of spectrum. Spectrum is not an unlimited resource. Cities all have cable company broadband, and an increasing percentage of competition with fiber. The federal government just spent billions on grants to get better broadband to rural areas. At the same time, Starlink has demonstrated that satellites can provide at least one broadband option to almost every rural location.

I’m not saying that the competition brought about by FWA isn’t beneficial, because it is. The FWA industry is probably the biggest reason why cable companies have stopped their annual rate increases and are now offering lower-cost packages.

My nagging concern is that a decade from now, we’ll find there isn’t enough spectrum available for the many other uses of wireless technology. I keep wondering how we found ourselves supporting FWA through the One Big Beautiful bill with no national discussion about whether this is the right policy. Congress has unilaterally decided that FWA is the big winner.

I would have thought that cable companies would be distraught by this, and perhaps they are behind the scenes. This decision must drive WISPs crazy, because the three big cellular companies are being given nearly unlimited spectrum to compete against them, while WISPs are limited to a handful of spectrum bands – which might be shrinking if the FCC finds it necessary to raid 6 GHz spectrum to meet the Congressional directive.

I can’t recall any major policy decision in our industry that was implemented with almost no dialogue or discussion. In the past, we decided spectrum issues through massive amounts of discussion from the industry in the FCC comment process. FWA leaped to become a priority through a few paragraphs in the One Big Beautiful Bill. That’s not how sensible spectrum policy should work.

Proposed Changes to E-Rate

The FCC announced in April it would be taking a fresh look at all aspects of the Universal Service Fund (USF). The agency recently kicked off this process for the E-Rate program by issuing a combined Notice of Proposed Rulemaking and a Further Notice of Proposed Rulemaking.

E-Rate is the Universal Service Fund program that subsidizes broadband for schools that have the highest percentage of students who qualify for the federal school lunch program. E-Rate also brings broadband to libraries. The program has been in effect since 1997. In recent years, E-Rate has disbursed around $2.5 billion annually to subsidize broadband bills. There are over 101,500 schools and 11,600 libraries served by the program.

The Notice of Proposed Rulemaking asks for public feedback on some fundamental questions about the existing program. The FCC asks if E-Rate is still meeting the original intent and asks if the program should be narrowed in scope or even ended. The FCC notes that when E-Rate was created, most schools did not have broadband access, but virtually all schools are connected to fiber broadband today. As an aside, I wrote a blog last year that noted that a large percentage of schools now need a lot more than one gigabit of broadband, with many schools now needing 5- to 10-gigabit service.

Most of the NPRM asks questions related to students’ use of broadband. Probably the most controversial question in the NPRM asks if the FCC should somehow try to limit screen time for students. The FCC cites some statistics that say that children ages 5- 8 average about three and a half hours per day of screen time. For students ages eight to twelve, the average is about five and a half hours daily. Finally, teens spend an average of eight hours per day using a screen. The FCC cites an expert who recommends that children five years and older should be limited to no more than two hours per day of screen time.

The FCC asks if it should intervene to try to limit screen time inside schools that receive E-Rate. It’s an interesting question, and I suspect there will be parents who welcome this. When reading the document, it’s easy to think the FCC is leaning towards ordering this. I have a hard time understanding how this is within the FCC’s jurisdiction. The E-Rate rules from Congress give the FCC instructions to make sure schools have adequate broadband, but didn’t give any authority over how schools or students should use broadband. In a related question, the FCC asks if parents should be allowed to opt out of having their children use computers in school. I’m sure teachers are shuddering at the possibility of having a mix of students with and without computers in every class.

The NPRM also asks about stricter regulations to make sure that students with school-supplied computers cannot access harmful information on the web, both when using devices in the school and when taking the devices home. This is a requirement that’s been around since the Children’s Internet Protection Act (CIPA), which was enacted in 1999. Apparently, the FCC is hearing of examples of students able to bypass restrictions on computers.

In the Further Notice of Proposed Rulemaking, the FCC is tackling the issue of better regulating E-Rate consultants. This is due to some recent headlines where consultants defrauded schools and the E-Rate fund. The FCC is suggesting an annual disclosure and certification of E-Rate consultants.

In addition to these proposals, the FCC recently separately suggested that E-Rate service move to a portal operated by USAC, where ISPs could competitively bid to serve E-Rate schools.