Environmental Regulations Delay Telecommunication Deployments and Impose Additional Costs

A new NERA study commissioned by CTIA finds that “[t]he current permitting process adds significant costs for wireless infrastructure and service providers and delays the deployment of higher-capacity networks and innovative services in the United States.” In August of this year, the FCC requested information on modernizing National Environment Policy Act rules. The report estimates that the rules cost $7.5 billion over 10 years, supporting the FCC’s current efforts to streamline its regulations and reduce unnecessary delays in state and local deployment efforts. Overall, regulatory reform can deliver large benefits for consumers and industry.

The study concentrates on the costs to outdoor wireless providers imposed by the National Environmental Policy Act (NEPA) and the National Historical Preservation Act (NHPA). It found a general lack of data on the costs of complying with these Acts and therefore used surveys and working sessions with major wireless providers to generate data. NEPA requires agencies to assess reasonably foreseeable environmental impacts of major federal action. Section 106 of NHPA requires them to identify historical properties that may be affected by a proposed “undertaking” such as a wireless infrastructure deployment. If either of these identifies significant environmental effects a more detailed environmental assessment may be required. 

The study estimated a total cost of $7.5 billion in reduced welfare and lower economic activity over ten years. Specific costs include outdated requirements that raise prices and reduce plan features, the deterrence of new mobile wireless network investments, especially in rural areas, delays in service deployment in rural areas, and an inefficient allocation of services away from deployment and toward environmental concerns. 

This cost consisted of four sources. Regulatory compliance cost $2.2 billion. These costs were projected to rise significantly over the next decade. This encompassed NEPA assessments costs, NHPA Section 106 evaluations, and environmental assessments costs. Out-of-pocket expenses added another $4.0 billion. These requirements also added an average of five months to new deployments of technology and upgrades, adding another $1.3 billion to the total cost. The study did not estimate the opportunity costs of investing resources into less valuable projects. These costs varied significantly between projects. For example, NEPA assessments varied from $500 to $5,500.

The results are in line with other studies. A 2018 study by Accenture estimated that costs related to required NEPA and NHPA reviews accounted for 29 percent of deployment costs or $2.43 billon from 2018 to 2026. A 2019 study found that the effect on U.S. GDP of a six-month delay in 5G deployment would be roughly $104 billion and cost 25,200 jobs. Finally, a 2023 study estimated a six-month delay would affect 77 million subscribers and reduce consumer welfare by $1.3 billion.

Regulators need to understand that regulatory compliance imposes significant costs in the form of out-of-pocket expenditures, project delays, and a reduction in general welfare. They need to ensure that these costs are necessary to obtain important consumer benefits and that better alternatives are not available.

Internet Prices for Highest Speeds May Be Up, But So Is Quality for All Plans

Is the price of Internet service rising or falling? Benton Senior Fellow John Horrigan recently tried to answer this question in a recent analysis for the Benton Institute using the FCC’s Urban Rate Survey (URS). His analysis builds on a prior piece by USTelecom. The answer is important because significant real increases in the cost of broadband may delay its benefits and serve as an argument for greater federal involvement. In brief, the price of most connections has fallen significantly since 2020. However, subscribers are choosing to spend more on faster plans.

 

Horrigan concluded that “[b]roadband service offerings at the highest speeds are expensive, growing in prevalence, and driving up average broadband prices.” Average price across all broadband plan offerings grew 4.8 percent in real terms. However, he also found that the rise is mainly due to increased demand for high-speed connections (2 Gbps or higher), not general inflation. The portion of high-speed plans in the URS sample rose from 9% to 16%. As the number of high-speed plans increases, they form a larger percentage of the URS survey. This in turn raises the average price for all plans, even if the price of every specific plan remains the same.

The chart below gives the average change in the price of different plans between 2020 and 2025 for different equipment and speeds. Higher than 2 Gbps is measured from 2021.

 Change in Real Broadband Prices from 2020 to 2025

Speed or Technology	% Change
Technology
Cable	-13.8
Fiber	+40.1
DSL	-9.3
Fixed Wireless	-50.7
Speed
Below 100 Mbps	-15.0
100-1000 Mbps	-28.9
1000-2000 Mbps	-15.3
Greater than 2000 Mbps	-25.3

Consumer demand has likely driven most of the increase in fiber. Horrigan also found that the quality of Internet plans is increasing. The most obvious improvement has been in data speeds. However, increases in the variety of content and reliability also matter. As the quality of broadband increases, consumers are willing to pay more.

The survey does point to a possible price ceiling in which low-income users are unable to pay higher prices even when better quality is considered. The decline in offerings of the lowest-cost plans may hurt low-income households. However, many Internet providers have special offerings for qualified low-income households that offer discounted prices. For example, Xfinity Essentials provides affordable home Internet for qualifying households ($14.95 per month for up to 75 Mbps, or $29.95 per month for up to 100 Mbps) — as well as low-cost computers, free WiFi hotspots, and free Internet training. CTIA points out that the industry has participated in programs like Lifeline, the Emergency Broadband Benefit and Emergency Connectivity Fund, and the Affordable Connectivity Program.

Streaming Continues to Surge as Short-Form Video Reshapes Consumer Habits

In a June 2025 post to the FSF Blog, I noted that streaming video had achieved a remarkable milestone: for the first time, it surpassed cable and broadcast television combined, capturing 44.8 percent of total viewing in May 2025. That trend continues. According to Nielsen's January edition of The Gauge™, streaming video's viewing share reached 47.5 percent in December 2025, setting yet another record. Perhaps even more impressive is the fact that, on two separate occasions, it represented over half of daily video consumption.

But the story of shifting consumer preferences extends beyond the longstanding streaming-versus-traditional-distribution-platforms narrative. An equally significant transformation is underway as social-media platforms – TikTok, YouTube Shorts, Instagram Reels, and so on – increasingly capture consumer attention with short-form content, particularly among younger demographics.

According to a Digiday article citing a report by GCI (subscription required), global consumers on average spend a tremendous amount of time each week watching short-form video content on social-media platforms: six hours and 39 minutes. In fact, the amount of time global consumers spend accessing such content significantly exceeds the amount of time they view streaming video: 5 hours. This represents a fundamental realignment in how people – especially younger generations – consume video.

These twin trends carry significant implications for communications policy. Indeed, the (1) ongoing ascendance of streaming video over legacy distribution platforms, and (2) explosive growth of short-form video underscore what I and others affiliated with the Free State Foundation long have argued: that the video marketplace is intensely competitive and consumer-driven. Consequently, legacy regulations born of a bygone era interfere with marketplace mechanics and artificially constrain competition-fueled growth in consumer welfare.

This reality is particularly relevant in the context of the FCC's ongoing review of the proposed transaction between Charter Communications, Inc. and Cox Enterprises, Inc., currently on day 101 (out of 180) according to the Commission's informal timeline. As the Free State Foundation noted in its comments, the combination of these geographically distinct distribution platforms appears likely to benefit video subscribers, in particular the Cox customers who would gain access to Charter's packages bundled with popular streaming options (HBO Max, Disney+, Paramount+, and ESPN Unlimited, among others).

NCTA Is Right On: "Must Carry" Must Go

For a very long time, Free State Foundation scholars have opposed the calls for the FCC to require that cable and satellite operators must carry broadcast channels in the ATSC 3.0 according to the government's dictate rather than the market's response to consumer demand. See, for example, Free State Foundation Adjunct Senior Fellow Michael O'Rielly's FSF Perspectives, "Let's Strongly Reject NextGen TV Mandates."

 

In this regard, I was pleased to see NCTA's comments filed with the FCC on January 20 contending that such a "must carry" government mandate is unconstitutional as a First Amendment violation. As NCTA puts it: "The Commission should also reject any calls to grant must-carry rights to 3.0 signals. In today’s video marketplace, must carry requirements are no longer supportable under the First and Fifth Amendments. Extending must carry requirements to 3.0 signals would only exacerbate these constitutional infirmities."

 

Right on.

 

Indeed, Free State Foundation scholars have been arguing that the FCC's "must carry" mandates violate the First Amendment since shortly after FSF was founded in June 2006. In that very same month, in "Taking the Constitutional Oath Seriously at the FCC," I wrote this:

 

"In 1994 in the Turner case, a sharply divided Supreme Court (5-4) barely upheld against a First Amendment challenge must-carry provisions that required cable operators to carry one signal of local broadcast stations. There is no evidence that, nor could there be in today's substantially changed communications environment, that the failure to carry multiple signals of local broadcasters will diminish the availability of local programming. And under Turner that is the test that must be met, with substantial and convincing evidence, to pass constitutional muster."

In 2010, FSF scholars penned several pieces arguing that continuing "must carry" mandates violate the First Amendment. This excerpt is from a blog posted in February 2010 by FSF's Seth Cooper titled, "Will the Supreme Court Decide 'Must Carry' Must Go?"

"The current state of video competition renders the 1990s rationale for must-carry obsolete. Only a person who has spent the last decade or so living deep inside a cave with no video reception capabilities whatsoever could be excused for not understanding that the video marketplace has undergone drastic change since the 1990s. Significantly, direct broadcast satellite has proven a strong source of competition with cable. The U.S. Court of Appeals for the District of Columbia Circuit recently acknowledged this in its August 2009 decision in Comcast v. FCC, striking down the FCC's cable subscribership caps. As I related in a prior blog post ("D.C. Circuit: Vindicating Video Competition"), that court expressly recognized the increasingly competitive and dynamic marketplace for video:

[T]he record is replete with evidence of ever increasing competition among video providers: Satellite and fiber optic video providers have entered the market and grown in market share since the Congress passed the 1992 Act, and particularly in recent years. Cable operators, therefore, no longer have the bottleneck power over programming that concerned the Congress in 1992. Second, over the same period there has been a dramatic increase both in the number of cable networks and in the programming available to subscribers.

In fact, the D.C. Circuit observed that "satellite television companies, which were bit players in the early '90s, now serve one-third of all subscribers." DBS subscribership growth over the last decade marks a dramatic change in the competitive video marketplace."

Of course, 2010 was way before the rise of dozens of popular Internet streamers. Nevertheless, we contended that the video marketplace already had changed so much that the notion of cable operators having "bottleneck power" was obsolete. It bears repeating what we said over 15 years ago: "Only a person who has spent the last decade or so living deep inside a cave with no video reception capabilities whatsoever could be excused for not understanding that the video marketplace has undergone drastic change since the 1990s."

Again, I'm pleased NCTA has included a First Amendment argument in its opposition to suggestions that the government should mandate carriage of broadcast channels in the ATSC 3.0. It's way past time for "must carry" to be confined to the constitutional dustbin in which First Amendment violations reside!

 

FSF: Off to a Fast Start in 2026!

 Believe it or not, we're already heading into the end of January 2026. I find it hard to believe regardless of what the calendar tells me!

 Looked at another way, I'm a bit surprised – well, not really –at what we've already accomplished at the Free State Foundation so far this year.

 

Be sure to check out all the activity – including FSF Adjunct Senior Fellow Michael O'Rielly's first videocast of the new year – in the Constant Contact message you'll be receiving shortly. Here I'll just highlight a few pieces.

 

Free State Foundation Senior Fellow Andrew Long asks and answers, at least preliminarily, "The $21 Billion Question: What Should NTIA's Roth Do With the BEAD Program Surplus?" He points out that NTIA Administrator Arielle Roth, speaking at a Free State Foundation event on December 2, commendably emphasized that the savings produced by the Trump Administration's important reforms to the BEAD program should not be spent "wastefully," should "produce real, measurable value," should "not duplicate investment the private sector is already making," and should not "distort investment or stifle innovation." Those should be considered foundational non-negotiable principles governing any decisions regarding the disbursement of any savings that are not returned to the Treasury for the benefit of taxpayers. Don't be surprised if we have more to say on this topic in the coming weeks and months.

 

One of the nation's priorities should be to act to accelerate the modernization of our communications networks by promptly transitioning to all Internet Protocol networks. Free State Foundation scholars have advocated doing so for many years. Take a look at the comments we submitted on January 20 in the FCC's "Advancing IP Interconnection and Accelerating Network Modernization" proceeding supporting the Commission's proposals in this regard.

 

To the same end – hastening the build-out of advanced communications – please see FSF comments filed on January 15 in the FCC's "Eliminating Barriers to Wireless Deployments" proceeding. Our comments advocate various actions that would eliminate costly and unnecessary state and local barriers to deployment. The comments explain why these actions are essential to maintaining our nation's leadership in deploying and using 5G (and beyond) broadband wireless services.

 

And if you're still in a New Year's mood, or just have the contemplative disposition, and wish to ponder how we Americans should think about our nation – and ourselves as citizens – during this year celebrating our 250^th birthday, I invite you to read my essay, "Let's Make 2026 About 'We the People'" published on January 1 by the Washington Times. Here's the way I closed: "In times like the present, when America's citizenry seems to be bitterly divided, a resolve to engage in deep reflection regarding what it means to be part of "We the People" – as each of us is – would be a worthwhile resolution for the new year. Deep reflection is another worthwhile resolution for the 250th celebration of the American experiment in democracy." That remains my sentiment.

 

And, finally, speaking of anniversaries, this June marks the Free State Foundation's 20^th anniversary. Having started from "scratch," just me and my laptop, I'm very proud of what we accomplished in those two decades to support free markets, free speech, property rights, and the rule of law. More about that throughout our anniversary year. For now, I'll just say we couldn't have done it without your support and friendship. For that, I'll remain forever grateful!