PRESS RELEASE: FSF Comments Show the FCC That the Communications Marketplace Is Competitive

Today Free State Foundation President Randolph May and Senior Fellow Andrew Long submitted comments in the FCC’s proceeding to examine the state of competition in the communications marketplace. Below is the Introduction and Summary of the comments.

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"In 2026, the hallmarks of the communications marketplace are competition and convergence. Wherever legacy regulations do not interfere, countless providers efficiently deliver communications – in whatever form (text, voice, video) – over a range of ubiquitously available IP-based distribution platforms. With respect to both content and connectivity, competition abounds.

 

As such, to achieve its goals, this next competition report need only identify additional opportunities to tear down rusty silos, repeal expired rules, and employ the various tools in the Commission's toolbox to achieve further deregulation – the DELETE, DELETE, DELETE proceeding; rulemakings; forbearance; waivers; sunset provisions; and so on. This will encourage further private investment (which has surpassed $2.2 trillion since 1996), accelerate deployment timelines, and, more broadly, eliminate unnecessary red tape.

Specifically, the Commission should acknowledge the true scope of the consumer-driven broadband marketplace (not some artificially contrived and constrained "broadband" marketplace) and, in response, take action to advance the transition to all-IP networks; eliminate unreasonable permitting hurdles at every level of government; continue to take swift action to resolve pole-attachment disputes; and take measures necessary to keep the spectrum pipeline flowing.

To unlock the full potential of unfettered competition to benefit consumers in the video programming marketplace, the Commission should: (1) reject calls to extend antiquated regulations applicable to facilities-based distributors to over-the-top providers – and instead eliminate those regulations altogether; (2) direct a fresh set of eyes to the regulated relationship between local broadcast television stations and facilities-based distributors, including asking whether in 2026 (a) there remains a factual predicate for the retransmission consent regime, and (b) there might be a more direct and efficient way to promote localism than taking steps to prop up legacy revenue streams (e.g., sports-driven advertising sales); and (3) going beyond the proposal to eliminate set-top box reporting requirements and sunsetting all of its rules implementing the navigation device provisions of the 1996 Telecommunications Act."

Do Pole Attachment Issues Threaten BEAD Projects?

On May 12 researchers Alex Karras and Michael Santorelli of the Advanced Communications Law & Policy Institute at New York Law School published a report and analysis of the cost of getting access to utility-owned poles as part of the deployment costs under the historic Broadband Equity, Access, and Deployment (BEAD) Program. The bottom line is that projects funded by BEAD are expected to lay 188,287 miles of aerial fiber on 3.9 million poles within 2,053 separate electric utility service territories. Using rough estimates, the estimated pole costs that BEAD contractors will have to pay in order to attach to poles range from $534 million to $4.63 billion nationwide.

Every BEAD deployment contractor had to estimate actual pole attachment costs as part of the application process. The study’s authors were not trying to duplicate these estimates. However, the range of estimates could be a sign that actual costs will vary widely. In a situation where contractors are facing tight deadlines and where actual costs are uncertain, pole attachment issues could become the focus of a lot of deployment problems. Coming on top of a renewed legal battle between Comcast and Appalachian Power Company, the large range of attachment prices shows that there is tremendous room for disagreement between broadband contractors and pole owners.

 

According to the report, pole ownership and regulation follow a “scattershot” approach. Electric cooperatives play a disproportionate role. Although they only serve 13% of electric customers, about 40% of BEAD aerial fiber will be deployed across their territories. The FCC has jurisdiction over poles owned by investor-owned electric utilities (IOUs) in 27 states. In the other 23 states, IOU poles are regulated by state public utility commissions. Regulation of poles owned by cooperatives and municipal electric utilities differs among states. The authors speculate that: “[i]n states where cooperatives and municipal electric utilities are unregulated, there are few guardrails in place to provide predictability and consistency in how pole-related costs are set, increasing the chances that BEAD subgrantees could encounter higher-than-expected pole fees from these entities.”

Electric utility pole issues have a significant effect on broadband deployment. The National Telecommunications and Information Administration (NTIA) has tried to address regulatory problems by extending the reach of the FCC’s rules. The FCC recently showed its willingness to act quickly in resolving pole disputes by expediting its decision in a dispute between Comcast and Appalachian Power Company. Comcast alleged that Appalachian Power was charging it for pole damage that was caused by third parties. The Commission ruled that Appalachian Power could only charge Comcast for the incremental cost of its project.

However, Comcast recently approached the Commission complaining that Appalachian Power was refusing to abide by its ruling. Thus, it remains to be seen whether tougher action by the FCC or NTIA will translate into a quicker, less contentious process that lowers cost or whether it leads to a rise in litigation that slows everything down.

Using a variety of independent studies, the researchers chose low, medium, and high estimates of pole costs depending on whether a pole just needs equipment added or whether it needs replacement. Their estimates are limited to electric utility-owned poles, which constitute about 70% of the total. Including all poles would raise the price significantly. The estimates for the cost per touched pole were $75 (low), $175 (base), and $450 (high). The estimates for the percentage of poles that will have to be replaced were 3% (low), 4% (base), and 8% (high). Finally, the estimates for the cost of replacing a pole were $2,000 (low), $3,500 (base), and $9,000 (high). Using the base assumptions produced an estimate of $1.25 billion or roughly 6 percent of BEAD deployment funds. The boundary estimates were $534 million (low) and $463 billion (high). This leaves a lot of room for disagreement between BEAD contractors and pole owners.

What can be done? The NTIA requires cooperatives and municipal utilities that participate in the BEAD program as subgrantees to comply with FCC pole attachment rules as a condition of accepting BEAD funding. The rules cap rates and charges that pole owners can impose on contractors. They also create timelines for processing applications and require regular progress reports. The authors also advocate letting states use some of the remaining $21 billion in nondeployment BEAD money to offset unexpected pole attachment costs. They point to successful models in Texas and North Carolina as good examples. State regulators could also rationalize pole issues as well as the accompanying permitting, rights of way, and easement issues that accompany them.

With proper policies in place, broadband providers around the country will soon be engaged in a major deployment effort to significantly expand coverage to unserved and underserved areas. In a project of this scope, problems are inevitable. But many of these problems, including pole attachments, can be managed better if regulators and broadband providers perform proper due diligence, build strong relationships, and create transparent, predicable processes.

Revised BEAD Program Connects its First Location

On November 15, 2021, the Infrastructure Investment and Jobs Act – that is, the legislation that created the $42.45 billion Broadband Equity, Access, and Deployment (BEAD Program – was signed into law. On May 14, 2026, 1,641 days later, BEAD Program funding at long last enabled the connection of its very location.

Of course, millions more locations are expected to come online in the coming weeks, months, and years.

In remarks offered on location in Ogallala, Nebraska, NTIA Administrator Arielle Roth highlighted the expediting impact of the "Benefit of the Bargain" revisions adopted last year. She also discussed changes designed to reinstate Congress' technologically neutral intent. In that regard, she noted that "[i]t's not an accident that this connection here in Ogallala is from an unlicensed fixed wireless provider."

Finally, a reminder: Ms. Roth will be a keynote speaker at the Free State Foundation's Twentieth Anniversary Celebration on Thursday, June 4, from 11:45am to 3pm, at the National Press Club. If you haven't already, register here to catch her fireside chat with FSF President Randolph May as well as an impressive lineup of other speakers.

Finding a Consensus on Accomplishing Permitting Reform

With the House of Representatives’ failure to schedule a vote on the American Broadband Deployment Act of 2025, we may have reached an impasse, at least for the moment, on achieving additional permitting reform at the state and local levels. Congress has taken several steps forward on reform at the federal level. But these mostly involved changes to the National Environmental Policy Act or the National Historic Preservation Act, the statutes that govern the majority of federal permitting decisions. However, one past attempt at negotiation may offer some lessons.

The success at the federal level led many to conclude that circumstances might be right for a more comprehensive reform to remove obstacles at the state and local levels. On March 24, Representative Buddy Carter (R-GA) introduced H.R. 2289, the American Broadband Deployment Act, which combined provisions from roughly 20 previous bills, including shot clocks and limits on fees, to accomplish broad reform. The bill passed the House Committee on Energy and Commerce and was scheduled to go before the House Rules Committee on April 20^th. However, a vote was indefinitely postponed once it became obvious that the bill lacked the votes to pass. This change in outlook was widely attributed to opposition from a number of associations representing state and local government, including the National Association of Counties and the U.S. Conference of Mayors.

Although Congressman Carter expressed confidence that the bill would pass later this Congress, the debate currently seems to be at an impasse. While the FCC is pursuing permitting reform under its own authority, the timing of any decision is not known and any significant change will be immediately challenged in court, delaying its effect. Meanwhile the significant increase in buildout activity due to the Broadband Equity, Access, and Deployment Program (BEAD) is approaching.

This is a shame because sensible permitting reforms would benefit both broadband providers and local governments. To start, unnecessary time and costs delay the build-out and use of broadband coverage to local households. Coverage in turn is firmly linked to greater economic activity and higher living standards. In the short-run permitting also increases local demand for skilled labor. So far much of the debate has been confined to anecdotes regarding specific experiences and limitations on the FCC’s powers, especially in light of recent Supreme Court decisions. While a list of unreasonable fees, unrelated construction requirements, poor construction planning, and damage to state and local property catches one’s attention, it is probably not the best grounds for determining public policy.

Almost two years ago the Benton Institute for Broadband & Society teamed up with the Georgetown Law Institute for Technology Law & Policy and groups of both Internet supporters and state and local governments to explore the possibility of improving the permitting process in ways that benefit all stakeholders. The effort involved a survey of stakeholders, a one-day conference, and a written report.

The report contained several sensible suggestions for reform. It listed three findings, each of which produced more specific suggestions. First, the parties should foster a partnership between the permit seeker and the permitting authority. They should try to create trust and accountability by meeting early and often and understanding the role of both local government and the proposed development. According to the report, one key issue is determining when any shot clock would start.

Second, the parties should maximize the resources available to the permitting authority. There was a consensus that many permitting agencies lack the resources needed to handle the normal permitting volume, let alone the significant increase expected from BEAD disbursements. Given BEAD’s history and the current delay in announcing how the government will spend approximately $21 billion in non-deployment funds, one should not be surprised if a large number of projects experience significant delays from a variety of causes, placing greater strains on agencies. Given that much of the under capacity may be due to the increase in BEAD-funded construction projects, perhaps using some of the excess to increase local capacity, at least through the surge, makes sense. Providers should also help agencies build public support by articulating the benefits of broadband delivery.

Third, the process should be transparent and consistent. Efforts to modernize the process by allowing builders to download forms, submit applications online, and look up the current status of projects can lower total costs and reduce unnecessary duplication. Modern online dashboards are already being used successfully in some jurisdictions.

In general, and certainly in the abstract, the Benton Institute report recommendations are sensible and merit action. However, they do not address some of the worst abuses regarding permitting at the local government level. These abuses increase the costs of broadband deployment projects and delay the provision of new or improved service to consumers.

Taking the position that state and local governments should face no deadlines, should be able to charge whatever fees they suggest are reasonable, and should be allowed to require substantial unrelated improvements seems like something we should avoid.

AI Plus 6G: A Convergence of Mutual Necessity

In conjunction with its annual summit on May 6, CTIA issued a new report devoted to the ongoing merger of wireless technology and AI: Wireless & AI: Driving the Future of Innovation. The report points to the growing co-dependency between the data networks (wired and wireless) and artificial intelligence (AI), a technological advancement that promises to create great value. In doing so, the report discusses several main points that are likely to drive the future of both AI and broadband.

The first principle, which I discussed in an FSF Perspectives earlier this year, is that AI and networks are increasingly interdependent. As the CITA report mentions: “AI requires wireless networks to move data, help coordinate real-time decisions and operate effectively with the physical world. In turn, wireless networks rely on AI to manage the surging complexity and record traffic driven by AI’s own insatiable data demands.

AI without data networks is useless. AI needs the models to download vast amounts of data of all types (code, text, sound, and visual), transport them to any location, process the information, transmit the analysis, and increasingly, act on the results itself without human intervention, a phenomenon the report refers to as "Physical AI." AI will operate across three layers; devices, edge, and the cloud, depending on the speed, complexity, and cost of the task.

Second, the dependence is two-way. While AI is heavily dependent on communications networks to maximize its use of data, the rapid increase in AI’s use of networks demands that the networks use AI to maximize their capacity in the form of transmission capacity, latency, and compute power. Just as the global power of AI depends on networks’ capacity, that capacity must use AI to expand in order to meet these increased needs. 6G networks will respond dynamically to the conditions and demands facing them. Already some are predicting that by the end of the decade one-third of AI traffic needs could go unmet. Accenture estimates that this could reduce potential GDP by $1.4 trillion.

The third point is that the physical merger is already occurring. 6G networks will increasingly connect with a wide variety of machines and sensors. Unlike existing networks, AI will require massive amounts of data to be uploaded into communications networks for analysis. AI traffic is expected to power 75 percent of smartphones within two years. Already, AI traffic is growing three times faster than overall traffic and is expected to account for 30 percent of networks’ traffic by 2034. Finally, 6G networks are expected to increase energy efficiency by 30 percent.

These advancements impact economic growth and national security. AI and wireless are the two top sources of infrastructure investment in the current economy, offsetting some of the uncertainty caused by higher consumer prices and international conflict. The significant dual use capability of AI and network advancements creates significant security implications and places a premium on intelligent and timely regulation. The world’s complexity increasingly cannot be resolved by humans manually reacting to data flows that move faster than human reaction time.

The report focuses on two major areas for policy reform. The first is the allocation of large contiguous blocks of licensed spectrum. The value of spectrum has grown rapidly due both to new uses and the increased capacity of existing uses. As a result, the allocation of spectrum is attracting increased demands from government, industry, and consumer use. The sooner Congress and regulators can develop methods for allocating spectrum to its most valuable uses, the better. The report points to next year’s World Radiocommunication Conference as an important milestone for developing a Western response to international policy.

Finally, permitting reform will also play a large role in determining the pace of innovation. Companies frequently need government approval at the federal, state, or local level before they can start building out Internet infrastructure, whether in the form of home broadband, data centers, or transmission lines. At the state and local levels it is not uncommon for agency officials to demand high fees or costly extraneous requirements as a condition to start construction. While some progress has been made at the federal level, state and local entities still impose significant delays. Both the FCC and Congress need to continue to remove impediments and implement meaningful permitting reform.

The ongoing merger of the communications networks (including eventually 6G) and AI will have vast implications for society. Machines will gather more information, transmit it widely, analyze any correlations within it, and act on the results. This will dramatically expand the information available to humans. The challenge is to use it wisely and for the benefit of all. AI without reliable, secure, high-capacity communications networks is useless, but the networks without AI will collapse.

Maryland Doesn't Need to Stop Dynamic Pricing

Developments in artificial intelligence continue to raise alarm among the public and lawmakers. Among the many concerns cited about artificial intelligence and automation is dynamic pricing. To this end, Maryland Governor Wes Moore signed legislation last week banning grocery stores and third-party delivery services from using individual shopper data to increase prices "dynamically."

Under dynamic pricing, sellers may use data about shopping behavior to automate and continuously adjust their prices. Under individualized dynamic pricing – sometimes called surveillance pricing in pejorative terms – businesses set different prices for different consumers by charging more to shoppers who appear willing to pay a premium or offering lower prices to customers who might not otherwise buy. Other types of dynamic pricing may include shifting prices at different times of day based on changes in demand or competitive conditions.

The underlying logic of dynamic pricing is straightforward: businesses have always tried to match price to demand, and data-driven tools make doing so easier.

Maryland’s bill drew public support, reflecting broader concern with companies exploring individualized pricing, especially on food and housing as basic needs. Critics frame these practices as predatory: corporations using shadowy algorithms to target and extract as much money as possible from individual shoppers.

However, the alarm reflects a misconception regarding what data collection and algorithmic pricing can actually accomplish. Even the most sophisticated artificial intelligence uses incomplete information and thus imperfect predictions – the same reason why centrally planned economies with government-dictated prices are so inefficient. Consumer preferences change with income, season, family circumstances, competing options, and other infinite variables that are impossible to capture in a dataset. The premise that an algorithm can reliably identify each shopper's maximum willingness to pay overstates the role that data and algorithms play in society.

Dynamic pricing is also already a routine feature of commerce. Airlines adjust fares continuously based on demand, booking patterns, and seat availability. That's why the person sitting next to you on a plane likely paid a different price than you paid for her ticket. Bars and restaurants offer happy hour pricing. Retailers run flash sales, time-limited promotions, and personalized discounts. Even Maryland’s own law acknowledges this reality with its numerous exemptions and clarifications for longstanding practices – promotional pricing, loyalty program discounts, and other temporary price reductions.

Moreover, the alarm over dynamic prices overlooks the consumer benefits. A grocer or other business that makes more sales has more room to keep overall prices low, and dynamic individualized prices can be what closes a sale that otherwise would not have happened. This means that people can buy things that otherwise wouldn’t have fit in their budgets.

Maryland’s law purports to address a public concern by conflating a common business practice with a supposedly harmful predatory practice and without acknowledging the consumer benefits. Maryland should indeed tackle deceptive trade practices in grocery stores and elsewhere, but states should not ban technology before actual harms to consumers materialize. Regulating against possible harms has its consequences – shoppers forgo benefits that they never even see.

PRESS RELEASE: FCC's 'Digital Discrimination' Power Grab Held Unlawful

 

Regarding the Eighth Circuit Court of Appeals decision issued today holding unlawful the FCC’s rules promulgated in its “Digital Discrimination” proceeding, Free State Foundation President Randolph May issued the following statement:

“The FCC rule adopting a 'disparate impact’ theory purporting to hold broadband providers liable, along with many other entities only tangentially related to the provision of broadband services, for discrimination constituted one of the agency’s more blatant power grabs in an unfortunately long history of bureaucratic aggrandizement. The court of appeals had little difficulty in holding that the Commission exceeded its authority with regard to both the adoption of the disparate impact theory and the coverage of the entities potentially liable under its rules. Now the agency can put its focus on acts of intentional discrimination where it properly belongs.

Aside from getting rid of unlawful rules that sought to aggrandize its power, the court’s decision is important in striking down a loosey-goosey enforcement regime that could have imposed substantial monetary forfeitures on entities not subject to the Commission’s jurisdiction and for actions that they could not have known fell within the ambit of the agency’s rules. In other words, a lawless regime."     

More of the Same: Wireless Prices Continue to Fall

On April 29 CTIA issued the latest results from its regular survey of the price of wireless broadband coverage. The bottom line is that wireless prices continue to fall significantly even as most elements of the Consumer Price Index are increasing. Even with lower prices, wireless plans are delivering faster speeds, more data, and better service. CTIA attributes this history to a combination of spectrum auctions, market competition, and continual innovation.

CTIA’s Wireless Affordability Tracker is the result of surveys of unlimited and more affordable prepaid plans as well as government data. It shows that the average real price of post-paid unlimited plans fell 10% last year and nearly 35% over the last 5 years. More affordable prepaid plans fell by 2.6% last year and 50% over the last two years.

According to the Consumer Price Index the real price of wireless service fell by 6.6% last year and by 41% over the last decade. The price of smart phones fell by 12.2% last year and 63.4% over the last ten years. This is in contrast to the overall CPI, which increased by 2.7% last year and 37% over a decade. Between 2020 and 2024 the share of spending devoted to wireless subscriptions fell by 15.2% so that it now makes up only 1.73% of the average consumer’s total spending.

Unfortunately, taxes have risen. On average, taxes make up 27.6% of the monthly wireless bill. But for increasing taxes on wireless services, the price declines would be even greater. Reducing wireless taxes would make wireless even more affordable.

Despite lower prices, consumers are getting faster speeds and more capacity. The average speed got 51% faster while Americans used 32% more data. This pushed the price per gigabyte down by 21% in the last year and 40% over the last two years. The price per gigabyte has fallen from $20 in 2015 to under $2 in 2024. Prices of home Internet service dropped by 3% last year.

Today, there are over two hundred different service providers offering thousands of different plans. Lower prices have been rewarded. In 2025 wireless providers attracted 3.4 million new 5G subscribers. These trends are likely to continue. Regulators should ask themselves whether sensible regulatory reform can spur the same combination of competition, innovation, and declining real prices in other markets.