Category Archives: Regulation – What is it Good For?

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.

The FCC Opens the 900 MHz Band

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

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

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

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

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

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

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

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

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

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

Broadband Shorts April 2026

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

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

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

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

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

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

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

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

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

Spectrum Relocation Costs

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

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

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

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

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

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

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