BEAD Program Softens Stance on "Alternative" Technologies

In final guidance released on January 2, 2025, the National Telecommunications and Information Administration (NTIA) opened the door, ever so slightly, to Broadband Equity, Access, and Deployment (BEAD) Program projects utilizing unlicensed fixed wireless and low Earth orbit (LEO) satellites. By no means a course correction to a true technology neutral approach – end-to-end fiber proposals continue to be heavily favored without adequate regard for cost – at least providers using these so-called "alternative technologies" are no longer barred outright from participating in the $42.45 billion BEAD Program.

In the Public Notice, NTIA reiterated its position that states "must seek the most robust technology feasible at each location." Prior to this policy change, that meant (a) end-to-end fiber first ("Priority Broadband Projects"), and (b) cable broadband, digital subscriber line (DSL), or fixed wireless – using either licensed spectrum or a combination of licensed and unlicensed spectrum – second ("Reliable Broadband Service"). Projects using unlicensed spectrum only do not fall within the definition of "Reliable Broadband Service." Nor do LEO satellite-based offerings.

With this final guidance, NTIA will allow states to consider grant applications utilizing distribution technologies that meet the speed (100 Mbps downstream and 20 Mbps upstream) and latency (less than or equal to 100 milliseconds) requirements for "Reliable Broadband Service" but (in my view, at least) arbitrarily remain excluded from that category. Specifically, unlicensed fixed wireless and LEO satellite-based offerings now will be treated as quasi-eligible "Alternative Technologies."

However, and as I highlighted in "BEAD Program Technological Neutrality 'Fix' Falls Short," an August 2024 Perspectives from FSF Scholars, states may consider non-fiber "Reliable Broadband Service" technologies only where the cost to deploy fiber exceeds the "Extremely High Cost Per Location Threshold" (EHCPLT), an often unreasonably high bar that disregards the amount of time it will take to deploy fiber versus other technologies.

"Alternative Technologies," meanwhile, become eligible only after states "demonstrate that no ["Reliable Broadband Service"] was deployable for less than the EHCPLT by leveraging multiple strategies to obtain bids for Priority Broadband Projects and other ["Reliable Broadband Service"] projects that fall under the EHCPLT."

In other words, with this change the funding eligibility priority order has been expanded, somewhat, from two categories – end-to-end fiber followed by other "Reliable Broadband Service" – to three, with unlicensed fixed wireless and LEO satellite at the end of the line.

While in theory an improvement over the exclusionary approach originally set forth in the BEAD Program Notice of Funding Opportunity, the final guidance's creation of a third-place "Alternative Technology" category – well short of a full embrace of the concept of technological neutrality – may not have that much of practical impact.

Court Sets Aside FCC's New Title II Order

On January 2, the U.S. Court of Appeals for the Sixth Circuit issued a decision on the merits in MCP No. 185. The three-judge panel's decision set aside the FCC's 2024 Securing and Safeguarding the Open Internet Order. The court wrote:   

Using "the traditional tools of statutory construction," id., we hold that Broadband Internet Service Providers offer only an "information service" under 47 U.S.C. § 153(24), and therefore, the FCC lacks the statutory authority to impose its desired net-neutrality policies through the "telecommunications service" provision of the Communications Act, id. § 153(51).

The Sixth Circuit's decision in MCP No. 185 presents a straightforward reading of the Communications Act. It thus reaches a relatively easy conclusion that broadband Internet access services are best understood as fitting the definition of lightly regulated "information services" under Title I of the Act. This decision is welcome because it means that innovative broadband networks will remain free from unjustifiable public utility regulation that Congress never authorized. 

The Sixth Circuit's opinion is refreshing because it shows how the traditional tools of statutory interpretation can be used to resolve even seemingly technical questions like the regulatory classification of broadband. It's the type of decision that eluded us so long as lower courts were subject to the "Chevron doctrine" and effectively required to rationalize even far-fetched agency interpretations or re-interpretations of supposed ambiguous statutory provisions. 

The Sixth Circuit's commendable decision was made possible by the Supreme Court's overruling of the "Chevron doctrine" in its 2025 Loper Bright Enterprises v. Raimondo decision, which signaled a return to principles of judicial review based on the best reading of statutes rather than elastic deference to regulatory agencies. 

 

The August 2024 stay order issued by a different Sixth Circuit panel in an earlier stage of the litigation presented a persuasive analysis that the FCC's order is contrary to the Supreme Court's Major Questions Doctrine. However, the merits panel's decision that was issued on January 2 rightly takes a first-things-first approach by concluding the FCC's order exceeded the terms of the Communication Act. Recourse to the Major Questions Doctrine is unnecessary to reach that conclusion. 

 

P.S. In December 2023, the Free State Foundation filed public comments with the FCC opposing the agency's proposed Title II reclassification decision. And in January 2024, the Free State Foundation filed reply comments in the Commission's Securing and Safeguarding the Open Internet proceeding. Those comments and reply comments predated the Supreme Court's decision in Loper Bright. For a defense of the Loper Bright decision, see FSF President Randolph May's July 2024 Perspectives from FSF Scholars, "Chevron's Demise Re-Aligns Administrative State With Founders' Vision."