Tag Archives: OBBB

The Spectrum Policy Mess

There was a recent article in LightReading that asked a great question – BEAD bet big on CBRS and 6 GHz bands, so why is Congress gutting them? Answering that question needs some context.

NTIA leaned into supporting fixed wireless throughout the BEAD process. During the original BEAD map challenge process, NTIA made it clear that locations covered by WISPs using licensed spectrum (CBRS) were to be considered as served as long as the WISP claimed the ability to deliver 100/20 Mbps broadband. There were vigorous challenges by governments and ISPs during that map challenge, so some areas served by licensed spectrum were kept as BEAD-eligible if speeds were below that threshold.

More recently, NTIA came out with a surprise decision that State Broadband Offices (SBOs) had to remove BEAD locations served by WISPs using only unlicensed spectrum. We’ll have to wait for the final count, but folks are speculating that this removed about 15% of the remaining BEAD-eligible locations nationwide.

It’s likely that the majority of rural WISPs will be incorporating 6 GHz spectrum into rural fixed wireless networks. If they haven’t done so yet, it will be a big component of future electronics upgrades. 6 GHz spectrum has wide channels that allow WISPs to deliver much faster speeds to customers within a reasonable distance from a tower.

When NTIA made the announcement that locations served by unlicensed WISPs are considered to be served, NTIA also changed the BEAD grant rules drastically and is allowing fixed wireless, cellular FWA, and satellite on the same playing field as fiber when choosing grant winners. NTIA is allowing SBOs to give some priority to fiber, but since NTIA also reserves the right to review every grant award, I think the priority for fiber is somewhat of a smokescreen. It seems clear that wireless carriers and satellite carriers are going to win a lot more BEAD locations than anybody ever anticipated. WISPs that win BEAD are going to be heavily reliant on CBRS and 6 GHz spectrum.

At the same time that BEAD was changing, Congress took a different path that poses a big threat to the availability of CBRS and 6 GHz spectrum. Congress has accepted the hype from cellular carriers that they will be running out of spectrum in a few years. The carriers even rolled out the old saw that the U.S. is losing the 5G race to China. My cynical take is that the carriers want more spectrum to expand FWA home wireless.

In the One Big Beautiful Bill, Congress renewed the FCC’s ability to hold spectrum auctions and instructed the FCC and NTIA to identify at least 800 megahertz of spectrum between 1.3 GHz and 10.5 GHz to be auctioned. The FCC must auction at least 300 megahertz of spectrum within two years, which must include at least 100 megahertz of the C-Band spectrum between 3.98-4.2 GHz. The bill carves out two bands of spectrum that cannot be considered for auction or relocation. The 3.1-3.25 GHz spectrum has been used by the military for many years. Also excluded is spectrum between 7.4-8.4 GHz, which is part of the X-Band spectrum that is used for military satellites.

The FCC and NTIA must identify 500 megahertz of other spectrum that will support full-power commercial licensed use cases. The new law does not protect CBRS spectrum, which sits at 3-55 – 3.7 GHz. This spectrum is used today by over 1,000 entities today such as WISPs, private networks, ports, schools, sports venues, hospitals, airports, and the DOD. The OBBB also doesn’t protect 6 GHz spectrum that is fully used today for WiFi. The FCC approved 6 GHz spectrum for WiFi in April 2020, and the spectrum is key to the ongoing deployment of WiFi 6 and WiFi 7, along with rural broadband.

There is no guarantee that the FCC will touch these two blocks of spectrum, but it’s going to be exceedingly hard to find 800 MHz of spectrum to auction without grabbing some or all of these two spectrum bands. There will obviously be a big battle from WISPs and the WiFi industry to protect CBRS and 6 GHz, but the FCC has the cover from Congress to allow them to raid the two spectrum bands.

As the LightReading article points out, NTIA and Congress are working at odds with each other. It’s not hard to envision BEAD grants going to WISPs and then watching WISPs lose the spectrum they need.

This whole mess comes from Congress meddling in spectrum policy – something they haven’t done before. The historical process was for the FCC to weigh the pros and cons of available spectrum and to pick the most beneficial use for each spectrum band. But Congress wanted to claim $85 billion in potential revenue from spectrum auctions to offset tax cuts.

I’ve talked to WISPs who say that losing CBRS and 6 GHz spectrum puts them out of business. That would leave them with the historic WiFi spectrum that has too few and overused channels.

The economy will suffer greatly in the long run if the cellular carriers are able to pull off this unprecedented raid on spectrum. Rural broadband will suffer a big hit. But the biggest hit to the economy would come from loss of WiFi spectrum, which fuels trillions of dollars of value across the economy.

New Tax Rules and ISPs

The One Big Beautiful Bill (OBBB) creates some significant new benefits for building broadband networks. Following are the primary ones. Tax experts may glean some other ones out of the lengthy bill.

Bonus Depreciation is a tax incentive that allows businesses to immediately deduct a significant portion of the cost of building qualified assets, instead of spreading it out over as asset’s useful life. Before OBBB, bonus depreciation was being phased out. It was at 40% of the cost of a qualifying asset in 2025, 20% in 2026, and zero in 2027. OBB resets this back to 100%. There is also no dollar limit on newly used bonus depreciation.

Bonus depreciation can be applied to any asset with a useful life of twenty years or less. That means it can’t be applied to fiber, conduits, towers, and buildings, but can also be applied to all other components of building a new fiber or wireless network. Bonus depreciation applies to more than network assets and can be applied against vehicles, furniture, computers, and software. There are some limits on the amount that can be used for vehicles.

This is a big deal for somebody building a fiber network because it can provide tax relief at the time you are funding and building a network. Big ISPs see the value of this, and AT&T said after passage of the bill that the bonus depreciation provides an incentive for the company to accelerate construction for the 30 million planned new fiber passings.

There is one downside to note for bonus depreciation – if you sell an asset that took advantage of bonus depreciation before the end of its normal expected life, the seller forfeits the bonus depreciation and must recognize it as taxable income at the time of the sale. Note that businesses can still use normal 179 accelerated depreciation for fiber and other long-life assets.

Opportunity Zones: OBBB makes the opportunity zone program permanent. The program was set to sunset at the end of 2026. The opportunity zone program is aimed at promoting infrastructure investments in economically distressed areas. Qualified investments made in opportunity zones can generate deferred taxes and reduced capital gains. It’s been fairly easy to qualify fiber networks as eligible for opportunity zone benefits, particularly if the fiber projects were built in conjunction with other economic development initiatives.

There are maps online that show the areas where current opportunity zone investment apply. States will likely modify the maps starting in 2026 since the definition of eligible low-income communities has changed. The new rules are also friendlier for making investments in rural opportunity zones.

Interest Deductibility. OBBB permanently changes the adjusted taxable income formula used to calculate the amount of interest a business can deduct. The new formula is computed using Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) and not the more limited EBIT.

R&D Deduction. This probably doesn’t benefit many ISPs, but OBBB restores the permanent ability to deduct research and development costs, including a one-time opportunity to deduct these expenses retroactively to January 1, 2022.

OBBB and Spectrum

The cellular industry is taking a victory lap after passage of the One Big Beautiful Bill (OBBB). The law reinstates the FCC’s authority to hold spectrum auctions and sets goals for the FCC to raise as much as $85 billion from selling spectrum. The following are the key provisions of the new law.

The bill instructs the FCC and the Assistant Secretary of Commerce (NTIA) to identify at least 800 megahertz of spectrum to be auctioned – between 1.3 GHz and 10.5 GHz. The law largely leaves it up to the two parties to determine the spectrum that will be up for sale. It will be interesting to how the FCC and NTIA coordinate on this.

The FCC is ordered to auction at least 300 megahertz of spectrum within two years, which must include at least 100 megahertz of the C-Band spectrum between 3.98-4.2 GHz. The FCC and NTIA must then identify 500 megahertz of spectrum that will support full-power commercial licensed use cases. That’s been a major goal for years for CTIA, the lobbyist for the cellular industry.

The bill carves out two bands of spectrum that cannot be considered for auction or relocation. The 3.1-3.25 GHz spectrum has been used by the military for many years. Also excluded is spectrum between 7.4-8.4 GHz, which is part of the X-Band spectrum that is used for military satellites.

The new law does not protect CBRS spectrum, which sits at 3-55 – 3.7 GHz. This spectrum is being used by today by over 1,000 entities today such as WISPs, private networks, ports, schools, sports venues, hospitals, airports, and the DOD. Part of this spectrum band is available for use by anybody, but subject to a system that shares bandwidth among users. AT&T had proposed late in 2024 that the FCC auction CBRS, which led to a letter signed by 23 ISPs from Texas and WISPA and sent a letter to Senators Ted Cruz and John Cornyn of Texas.

The bigger controversy comes from considering auctioning all or part of the 6 GHz spectrum that is used today for WiFi. The FCC approved this as public spectrum in April 2020, and the bandwidth available in this spectrum band has enabled the development of WiFi 6 and WiFi 7. Critics of the legislation point out that WiFi is by far the most valuable spectrum in the country. A study published by NCTA said the value of WiFi to the U.S. economy is $1.6 trillion in 2025, and the value is growing rapidly and will be 33% more by 2027.

The potential raid on the 6 GHz spectrum has raised alarm bells worldwide. This spectrum has been earmarked around the world for WiFi and unlicensed and shared spectrum use. The fear is that carving out some of U.S. 6 GHz spectrum will threaten WiFi innovation, and would make it harder to develop interoperable hardware and chip sets.

Trade groups such as the Wi-Fi Alliance and NCTA have filed objections with the FCC that suggested that any value generated by cellular use would pale against the huge benefits of expanded WiFi.

The FCC is going to have a major battle to auction 6 GHz spectrum that will pit the biggest cellular carriers against ISPs and the many other industries that benefit from WiFi. I remember a quote in an article a few years ago that resonated with me, which said that most people use WiFi from waking until bedtime, making it the most valuable spectrum.