Category Archives: Regulation – What is it Good For?

Some Hope for Non-deployment Funds?

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

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

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

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

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

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

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

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

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

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

Congress Active with Broadband Bills

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

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

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

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

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

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

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

 

Is the FCC an Independent Agency?

FCC Chairman Brendan Carr recently told Congress that he doesn’t believe that the FCC is an independent agency. The FCC went so far as to remove the term independent from its website. The bottom line of Chairman Carr’s opinion is that he believes the FCC should take direction from the White House.

It’s an interesting position that contradicts the long-standing intentions that the FCC, and many other federal agencies are independent, meaning that they don’t take directions directly from the Administration, but are required to follow whatever enabling laws and rules established by Congress. There are a number of independent agencies other than the FCC, including the EPA, SEC, Federal Reserve, NASA, CIA, FTC, SSA, and NTSB.

There are several key characteristics of independent agencies. First, they are not part of, and don’t report to any of the fifteen cabinet departments like State or Treasury. Independent agencies were generally established by Congress to be somewhat shielded from political pressure. For example, it’s not easy for the President to fire the head of an independent agency. The agencies are often structured with a multi-member Board or Commission, which typically includes rules that require representation from both parties. Some agencies like the SEC and the FCC are accorded rule-making power within a specified range of issues.

The FCC was created by Congress with the passage of the Communications Act of 1934. The agency has been directed by Congress to regulate radio, television, wire, satellite, cable, and the Internet. The Act did not include language that specified the FCC was independent. The independent status is inferred from the structural provisions in the Act that define how the agency operates. The relevant language appears in Section 4(a) of the Act (codified as 47 U.S.C. § 154(a)), which establishes the structure of the Commission. The Act created a commission of five (originally seven) members who are appointed by the President and confirmed by the Senate. The Commission must be bilateral, and no more than three members can be from the same political party. Commissioners serve for fixed, five-year terms. The FCC is required to follow laws passed by Congress aimed specifically at the agency.

The Supreme Court has explored issues related to independent agencies over the years. Supreme Court rulings, like Humphrey’s Executor v. United States (1935), defined a key element of an independent agency to be a lack of explicit legislative language giving a President the power to remove commissioners at will (i.e., for any reason). Instead, the ability to remove commissioners is widely understood to be limited to specific reasons like “inefficiency, neglect of duty, or malfeasance in office.” This structure of independent agencies is done deliberately to insulate agencies from direct presidential control and ensure decisions are based on the public interest rather than political pressure.

Chairman Carr’s statements are a direct challenge to Congress. Historically, independent agencies like the FCC are given general marching orders from Congress through legislation, but even then, the agency is free to interpret specifically how to enact laws. Chairman Carr says that he feels empowered to take direction directly from the White House, and it seems likely this will eventually trigger a showdown. At some point, Congress will have to assert its authority or cede its power to the Administration.

The FCC has never been free from politics, because almost nothing in Washington D.C. can be. The FCC Chairman has traditionally been from the same party as the White House and is typically sympathetic to policies of the administration. But there has always been an uproar if an FCC Chairman has been accused of directly taking direction from the administration. An example of this happened when Republicans accused Chairman Tom Wheeler of too closely following the White House direction on the issue of net neutrality.

The long-term repercussions of a political FCC are not good for the industry. While ISPs, carriers, and programmers all have a wish list of regulations they don’t like, there has always been a huge benefit for regulated companies to have regulatory certainty, which means that rules don’t change drastically with every change of administration. Regulated companies might complain loudly about being overregulated, but they benefit financially from knowing the rules, since this allows them to develop long-term strategies. Every large ISP will quietly admit that regulatory certainty is far better for them than rules that change with each Administration.

BEAD on Hold?

It appears that NTIA missed an important step when it generated the new BEAD rules in June in the BEAD Restructuring Policy Notice. That is the document that changed the scoring of BEAD grants from using a dozen different scoring criteria to choose grant winners to a new method that focused on the character of the proposed technology (priority or not) and the cost per passing.

On December 14, NTIA got a ruling from the GAO that the changes made by NTIA in the Policy Notice are outside of the scope of NTIA’s authority. According to the decision from the GAO, a major change like the one implemented by NTIA requires approval by both Congress and the Comptroller General.

Agencies like NTIA are subject to the Congressional Records Act (CRA), which defines the administrative process that government agencies must follow to change rules. The GAO says that NTIAs Policy Notice implements, interprets, and prescribes law or policy, which triggers provisions of the CRA. The Policy Notice not only affected changes within NTIA of how it administers the BEAD program, but it changed the process of how Eligible Entities (State Broadband Offices) go about seeking funding under the program.

The GAO letter lists the possible ways that NTIA could be exempt from seeking Congressional approval and concluded that none of the exemptions apply to NTIA’s Policy Notice changes. The key trigger for the GAO ruling was that the rule changes created a substantial effect on non-agency parties, meaning States and ISPs.

The conclusion of the GAO is as follows: “The Policy Notice is a rule for purposes of CRA because it meets the definition of a rule under APA and no CRA exception applies. Therefore, the Policy Notice is subject to CRA’s requirement that it be submitted to Congress and the Comptroller General before it can take effect.”

The bottom line of this ruling is that NTIA had no authority to unilaterally change the BEAD rules in such a drastic fashion. The BEAD rules in the IIJA legislation were specific, and the changes NTIA ordered with the Policy Notice were significant enough to require NTIA to seek Congressional approval before making the changes.

This is an interesting twist. In normal times, this would mean that NTIA would have to put BEAD on hold until this is resolved. NTIA would not be able to enforce the changes in the Policy Notice, and if Congress didn’t approve the NTIA changes, the BEAD program would probably reset to the status in June before the Policy Notice. It would mean that all of the changes to grant scoring and the requirements for States to determine priority technologies would be invalid. It would means all tentative grant awards made under the revised rules are invalid. States would probably have to re-score grant applications under the original BEAD rules for selecting winners.

But we don’t live in normal times, and this Administration is currently ignoring the rules of the Congressional Records Act in many other venues and programs. So what does this mean? It may mean nothing, and NTIA might just ignore this GAO decision. This might trigger action from Congress. There has been a lot of unhappiness that the amount of grant awards was trimmed so drastically. This decision certainly gives an actionable reason for anybody who wants to take NTIA to court to halt the BEAD process during litigation. Like everything associated with BEAD, awards made under the new rules are going to be under a cloud, and that makes everybody uncomfortable.

BEAD and Affordability

One of the big glaring weaknesses of BEAD was that the enabling legislation and the NTIA rules made it impossible to consider affordability as a criterion of selecting BEAD grant winners. A few states tried to stress affordability during the BEAD process, but were largely shut down by the NTIA. After the Benefit of the Bargain rules, consideration of affordability went out the door, along with all factors other than the construction cost per passing.

In a speech made to the Hudson Institute, NTIA Assistant Secretary Aerielle Roth was quoted as saying, “This administration does not want BEAD to become just another well-intentioned broadband program that falls short. Its mission is nothing less than to close the “digital divide” once and for all.”

Unfortunately, the BEAD infrastructure grants alone were never going to close the digital divide. When we talk about solving the rural digital divide, we’re really talking about several different issues. A primary element of solving the digital divide is broadband availability, which is what infrastructure grants tackle. BEAD focused on making sure that BEAD-eligible locations got at least one broadband option with a speed of at least 100/20 Mbps.

Solving the digital divide means two more things. First, it means making sure that people have computers and devices and know how to use them effectively. Finally, solving the digital divide means having broadband that people can afford.

Congress intended to tackle all these elements of the digital divide solution. The Digital Equity Act was intended to provide the funding needed to make sure that folks had devices and knew how to use them. That effort was going to be bolstered by BEAD non-deployment funds that didn’t get used for infrastructure. Unfortunately, NTIA and the Administration have refused to distribute the funding from the Digital Equity Act, and it appears likely that most or all of the non-deployment funds won’t be made available to States.

At the time that the BEAD legislation was approved, the ACP program was underway to provide low-income homes with a monthly $30 discount off broadband. The BEAD legislation mandated that BEAD winners enroll and use the ACP program. Unfortunately, Congress let that program lapse.

There were State Broadband Offices that tried to tackle the affordability issue through the scoring of grants. These States tried to assign a lot of grant points to ISPs that offered lower rates. For example, the proposed grant scoring in some states would have given an edge to a cooperative with $65 rates over satellite broadband priced at $120 or another ISP with $100 rates.

The BEAD legislation said that States couldn’t use BEAD rules to ‘set rates’, and there were a few States that tried to do that in their grant scoring and tried to force rates as low as $30 or $40. NTIA nixed State attempts to force lower rates even before this year’s Benefit of the Bargain rules.

It’s a shame that overall rates couldn’t be considered in BEAD, because household incomes are lower in rural areas than in non-urban areas, meaning that affordability is more of an issue in rural areas. This is not true for all BEAD areas, but many of the areas covered by BEAD are both rural and poor. According to statistics published by the Federal Housing Finance Agency at the end of 2024, 18% of rural homes have household incomes under $25,000 per year, compared to 15% in non-rural areas. There is also a significantly higher percentage of rural homes with household incomes between $25,000 and $50,000 (21% vs. 17%).

To me, the bottom line is that BEAD is not going to solve the rural digital divide since it focuses only on infrastructure. NTIA has to shoulder the blame for nixing the grant funding that would have provided devices and digital skills training. Congress has to take the blame for ignoring profitability when it required  ACP participation as a component of BEAD, and then let ACP lapse without a replacement.

AI and BEAD Non-Deployment

Yesterday, President Trump signed an Executive Order that gives the federal government the sole authority to regulate AI. The EO provides three justifications for asserting federal authority.

United States AI companies must be free to innovate without cumbersome regulation.  But excessive State regulation thwarts this imperative.  First, State-by-State regulation by definition creates a patchwork of 50 different regulatory regimes that makes compliance more challenging, particularly for start-ups.  Second, State laws are increasingly responsible for requiring entities to embed ideological bias within models.  For example, a new Colorado law banning “algorithmic discrimination” may even force AI models to produce false results in order to avoid a “differential treatment or impact” on protected groups.  Third, State laws sometimes impermissibly regulate beyond State borders, impinging on interstate commerce.

Within 30 days, the U.S. Attorney General is required to establish an AI Litigation Task Force with the sole responsibility to challenge State AI Laws. It seems likely this will result in a series of federal lawsuits trying to preempt any State AI regulations.

Of concern to the broadband world is that the EO includes specific language that singles out BEAD grant funding. The EO says:

Within 90 days of the date of this order, the Secretary of Commerce, through the Assistant Secretary of Commerce for Communications and Information, shall issue a Policy Notice specifying the conditions under which States may be eligible for remaining funding under the Broadband Equity Access and Deployment (BEAD) Program that was saved through my Administration’s “Benefit of the Bargain” reforms, consistent with 47 U.S.C. 1702(e)-(f).  That Policy Notice must provide that States with onerous AI laws identified pursuant to section 4 of this order are ineligible for non-deployment funds, to the maximum extent allowed by Federal law.  The Policy Notice must also describe how a fragmented State regulatory landscape for AI threatens to undermine BEAD-funded deployments, the growth of AI applications reliant on high-speed networks, and BEAD’s mission of delivering universal, high-speed connectivity.

In case you are wondering the extent of State AI regulations, the following map comes from BCLP, which is accompanied by a description of existing and pending AI regulations, by State. As this map shows, over half of the States already have some form of AI regulation, and only three states don’t have existing or pending AI regulations.

It’s been clear that NTIA has been seeking a mechanism for denying non-deployment funds, which are the portion of the $42.5 billion in BEAD that is not being spent on infrastructure. Current estimates are that non-deployment funds will be more than $21 billion. These funds are supposed to be distributed to States under the IIJA legislation. This EO gives NTIA the grounds for denying non-deployment funds for a lot of States.

If you read through the existing AI regulations, most are of two types. Many States have enacted legislation that makes it illegal to use AI to defraud people, adding AI to laws that already forbid using emails, telephone calls, and other forms of communication. There are also States that have legislation that tries to protect citizens privacy. There are a few States with other restrictions.

State Broadband Offices in States that have AI regulations do not have the power to overturn AI regulations, and State legislatures must act if they want to cancel AI regulations to preserve non-deployment funds. That may be a futile effort, because my best guess is that we haven’t seen the end of attempts to deny non-deployment funds and that this is only the first volley. For what it’s worth, there is opposition to overturning State regulation of AI in Congress, but it would be extraordinary for this Congress to override an Executive Order with legislation.

Mission Accomplished?

In my recent annual predictions for 2026, I predicted that the FCC or the NTIA would declare that the rural digital divide has been solved since everybody in the country now has access to adequate broadband.

We got an inkling of this from NTIA Assistant Secretary Arielle Roth in a speech she made to the Hudson Institute. She alluded to the end of the rural digital divide twice in that speech. First, she said, “This administration does not want BEAD to become just another well-intentioned broadband program that falls short. Its mission is nothing less than to close the “digital divide” once and for all.” Later in the speech, she said, “Being good stewards of taxpayer money means holding awardees accountable and making sure those who take taxpayer dollars will deliver on their promises. That is what will set BEAD apart and ensure that this really is the last broadband funding program.”

I can’t find any similar statements from FCC Chairman Brendan Carr, but he has been a strong supporter of satellite broadband. He’s been a big proponent recently for easing the regulation of satellite broadband companies and also freeing up a lot of spectrum for them.

It’s obvious that any pronouncements about the end of the rural digital divide would be tied to the ubiquitous availability of satellite broadband. It would not be a stretch for regulators to say that the rural digital divide has been solved since everybody can buy satellite broadband.

Of course, pronouncing the end of the rural digital divide is not the same thing as it being true. Starlink told State Broadband Offices that it needs BEAD grant funding to grow the capacity to serve larger numbers of rural households. Starlink no longer has any waiting lists, but it does warn that new subscribers might have to pay a ‘demand surcharge” in areas that are oversubscribed.

Starlink is no different than any ISP in that there is a maximum number of customers that it can serve in a geographic area. Recent estimates are that the company has around 2.6 million U.S. customers. Only Starlink knows what its real capacity is, but it’s not an unlimited number of subscribers, particularly in the parts of the country where it will see a greater concentration of customers. It’s anybody’s guess what Amazon One will mean for the industry.

There are definite repercussions if federal regulators say that the rural broadband gap has been solved. Certainly, this would mean the end of federal broadband grants. Even if grants are created, like is happening with ReConnect at USDA, there will be no grants awarded if the federal government declares that satellite broadband means all households are considered to be served.

Such a declaration probably also puts pressure on maintaining federal subsidies in rural areas through the Universal Service Fund. It becomes easy to justify ending ongoing subsidies for rural ISPs if satellite broadband can pick up any customers left stranded by the end of subsidies.

Such a declaration would be a big disappointment to the millions of homes being missed by BEAD. The last two years of the BEAD process focused on eliminating BEAD-eligible locations, many of which still don’t have good broadband. For example, the map challenge process eliminated huge numbers of homes from BEAD that are claimed by WISPs using CBRS spectrum, with no real concern if the WISPs were actually delivering adequate broadband. Making this declaration would end up leaving these homes to satellite without any public declaration.

People who still don’t have good broadband are not going to stop complaining about it to local, state, and federal elected officials. A declaration that rural broadband might make it easy to ignore these folks for a while, but that will only last for so long.

Do We Have a Spectrum Policy?

Telecompetitor recently published an article that cited concerns from analysts at MoffettNathanson Research that wonder about the way spectrum is being allocated for FWA home cellular broadband. It turns out that the big cellular carriers are devoting a huge amount of network resources to FWA while reaping only small financial benefits. FWA use may already account for more than half of the traffic on the Verizon cellular network while only accounting for 3% of Verizon’s revenues. FWA makes up only 6% of T-Mobile’s revenues.

I’ve written about this before, and the difference in monthly data usage between cell customers and home broadband customers is immense. CTIA, the association for cellular carriers, recently reported that the average cell customer uses 17.2 gigabytes of data per month on cellular networks. OpenVault recently reported that the average home broadband customer used over 640 gigabytes per month at the end of the third quarter. That means that the average FWA customer is using as much bandwidth as 37 average cellular customers.

You might ask why it matters how Verizon and T-Mobile use the spectrum they purchased in FCC auctions. From a regulatory perspective, it probably doesn’t matter. Once these companies buy the spectrum, they are free to use it in ways allowed by the spectrum licenses. Cellular spectrum has been used for home broadband for many years through the sale of hotspots. The big difference between hotspots and FWA is that hotspots most normally have stingy data caps similar to what is sold to cellphones, while FWA offers unlimited home broadband.

But from a market perspective, it matters a lot because the government has suddenly decided to shuttle a lot more spectrum to the cellular carriers. In the Big Beautiful Bill, Congress instructed the FCC to find at least 800 megahertz of spectrum for commercial wireless services. The expectation is that the sale of this spectrum could raise around $88 billion for the U.S. Treasury. It’s highly likely that the three big cellular companies would buy most of this spectrum along with perhaps a few large cable companies.

Cellular carriers need this extra spectrum to support FWA. Even if they add no new FWA customers, home broadband usage has been growing at around 9% per year, so FWA will take up an increasing share of existing cellular spectrum every year. But the major reason the carriers need more spectrum is because they have big plans to continue to grow FWA cellular. Verizon says it plans to double the number of FWA customers by 2028. T-Mobile says it plans to grow from today’s 7.8 million FWA customers to over 12 million by 2028. AT&T has expressed no specific plan for FWA growth but has recently stepped up sales significantly.

The three carriers will need the new spectrum being made available by Congress to support their sudden appetite for using spectrum to compete for home broadband. That’s one of the more surprising sentences I have ever written. A decade ago, I would have been laughed out of the room if I had suggested that our scarce national spectrum resource should be used to compete with landline broadband networks.

This is policy gone amok. Clearly, the carrier lobbyists were successful in getting this change inserted into the Big Beautiful Bill. That alone is extraordinary, because in the past, the FCC and the NTIA together collaborated to determine spectrum policy. Apparently, Congress can now set spectrum policy in a footnote of a budget reconciliation bill.

There are many other important uses for the same spectrum bands now being considered for expanding FWA. The spectrum is also needed for the military, for rural fixed wireless broadband, for communicating with airplanes, for weather services, for public safety, and for WiFi.

That last use is the most troublesome of all. WiFi spectrum is by far the most valuable spectrum in the U.S. economy. Almost everybody reading this blog spends most of their online time, whether by computer or cellphone, using WiFi spectrum. The FCC is likely going to have to dip into the 6 GHz WiFi spectrum to satisfy the Congressional mandate. That is absurdly short-sighted and undoes decades of careful spectrum deliberations that have tried to make sure that every use of spectrum is protected.

It’s a fair question to ask if we even have a national spectrum policy now. Raiding 800 megahertz of the most valuable spectrum we have to support FWA sounds less like a policy and more like a land grab by the cellular industry.

Grants Should Look Forward

State Broadband Offices had to go through a process this year of deciding if various technologies qualify for grant purposes as priority projects. A priority technology must meet the following requirement: Provide broadband service that meets speed, latency, reliability, consistency in quality of service, and related criteria as the Assistant Secretary shall determine; and ensure that the network built by the project can easily scale speeds over time to meet the evolving connectivity needs of households and businesses and support the deployment of 5G, successor wireless technologies, and other advanced services.

NTIA chose a speed of 100/20 Mbps as the metric for meeting the current test of a priority technology. This is convenient, since this was the declared speed that the legislation said a BEAD-funded technology must be able to deliver. Today’s blog asks if that definition is adequate.

One way to consider what the current speed of broadband should be is to look at historical trends. For many years, Cisco issued reports that regularly reported that the demand for speed was growing at roughly 21% per year for residential broadband, and a little faster for business broadband. Cisco and others noted that the demand for broadband speeds was on a relatively straight line back to the early 1980s.

It’s not hard to test the Cisco long-term growth rate. The following table applies a 21% growth rate to the 25/3 Mbps definition of broadband established by the FCC in 2015.This table is somewhat arbitrary since it assumes that broadband demand in 2015 was exactly 25 Mbps – but there was widespread praise of the new definition at that time, other than from ISPs who wanted to stick with the 4/1 Mbps definition. This simple table accurately predicted that we would be talking about the need to increase the definition of broadband to 100 Mbps download around 2022, which is exactly what happened. The FCC did not have a fifth Commissioner at the time and wasn’t able to make the change until March 2024 – but in 2022, the FCC wanted to change the definition of broadband to 100 Mbps download, which was at a 21% compounded annual growth rate from the definition of broadband the FCC had established in 2015.

I can’t think of any fundamental industry changes that would change the historical growth rate in the near future. We’ve certainly seen a big demand to buy faster broadband products. Consider the following chart that starts with the assumption that 100 Mbps was the right definition of broadband in 2022. Growing that number over time by the same 21% results in the following table. What does this table suggest for BEAD and other grant?. Consider the evaluation of Starlink, which is the technology that is closest to meeting or not meeting the needed speed. Ookla released a report in the first quarter of 2025 showing that the median speed on Starlink was 104.71 Mbps download and 14.84 Mbps upload, and that only 17% of Starlink customers in the first quarter fully met the 100/20 Mbps speed threshold.

The table above suggests that the current definition of broadband in 2025 should be something like 177/35 Mbps. It’s debatable if Starlink meets the 100/20 Mbps test today, but it clearly doesn’t meet a test based on the speed demand in 2025.

The BEAD future-looking test is challenging because nobody defined what future-looking means. I can think of two definitions of forward-looking that might make sense. One is to judge what speeds should be delivered when the grant project has been constructed, which for most BEAD projects will be at the end of 2029. The growth chart suggests that the speed for defining broadband in 2029 will be around 380/76 Mbps.

I think a better forward-looking test for a government-sponsored grant should be that a grant-funded network should still be relevant a decade after a grant is awarded. The chart suggests the desired speed should be 1191/238 Mbps in 2035.

Naysayers will argue that the 21% growth in speed demand can’t be sustained. Consider taking a more conservative approach that cuts the historical growth rate in half. That conservative approach would say that a target speed for a grant-funded project would be 195/30 Mbps in 2029 and 345/69 Mbps in 2035. I have nothing to go on except my gut, which tells me that 345/69 Mbps will feel inadequate in 2035.

Can the FCC Regulate Local Permitting?

ACA Connects, an industry group that represents midsize cable companies and fiber overbuilders, recently asked the FCC to issue regulations to streamline permitting and the acquisition of rights-of-way. For those who lose track of the various industry advocacy organizations, ACA Connects was previously known as the American Cable Association.

The ACA Connects comments were filed in response to the open Notice of Inquiry that asks for comments that can eliminate barriers to wireline deployments. The ACA Connects comments ask the FCC to investigate and regulate three issues. First is the timeline for local communities to respond to a request for rights-of-way or construction permits. ACA Connects members have related stories of communities that sit on requests for months with no response. ACA Connects advocates for a shot clock that requires communities to react within a specified time, similar to what has been required by the FCC for requests for placing a new wireless tower.

Second, the group asks that fees charged for access to rights-of-ways be cost-based and objectively reasonable, and that new ISPs are provided the same treatment that was provided to incumbent providers. There are communities that want large up-front fees to obtain rights-of-way and permits that go far beyond a reasonable value. I’ve often suspected that this is a result of cities losing franchise fees as the cable TV industry continues to lose customers.

ISPs also object to hidden fees and costs. The filing documents examples of unreasonable costs, such as having to bury conduit deeper than is required by industry standards. The filing cites an example where an ISP was asked to repave a full block after disturbing only a small portion of a sidewalk.

It’s worth noting that these are not universal problems, and many communities are welcoming fiber overbuilders with open arms and easing the process of bringing competition to their community. But any ISP understands how unexpected delays and costs for a routine function like obtaining rights-of-ways and permits can delay, and even kill plans to complete a new network project.

ACA Connects recognizes that this would be a big lift for the FCC. Communities are going to strongly resist any efforts to dictate rules for how cities manage and charge for rights-of-way. The FCC has made headway in managing the placement of towers and wireless facilities. But that’s partially because the process of siting a tower is unique. However, rights-of-way rules apply to a lot larger universe than just ISPs. Any changes to the rules will suddenly change the way that cities interact with electric utilities, cable companies, gas utilities, and even the general public who wants to make changes like cutting a new driveway into a busy road.

Local communities view control or rights-of-ways as one of the most important rights of a community and will resist any attempt by a federal agency to change the rules. I predict a huge legal battle if the FCC decides to tackle this. Not that it should matter, but that means that implementing what ACA Connects recommends could take many years and many lawsuits before implementation.

The FCC’s ability to tackle something like this has been weakened by recent Supreme Court rulings. For example, in Loper Bright Enterprises v. Raimondo, the Supreme Court largely ended the Chevron deference and ruled that federal agencies are on shaky ground when they make decisions that are not explicitly directed by Congress. In the 2025 ruling, McLaughlin Chiropractic Associates, Inc. v. McKesson Corp., the Supreme Court ruled that Courts can more easily disagree with rulings made by federal agencies, making it easier for courts to disagree with orders made by the FCC.

Like with many other regulatory issues, the reality of the court rulings means the right forum for fixing these issues is in Congress. But Congress has been conspicuously missing from regulation since the Loper Bright ruling. There is no question that the ISPs that prompted ACA Connects to file these comments are feeling pain in the market. But even if the FCC tackles what they are requesting, there won’t be any quick fixes.