We Need NHPA Reform to Enable AI

The Free State Foundation has written many times about how difficulty obtaining necessary government permits and rights-of-way adds unwarranted costs and\or delays to deploying broadband. Although most permitting problems are at the state and local levels, the federal government also requires costly studies for permission to use federal property. The two principal statutes are the National Environmental Policy Act (NEPA) and the National Historic Preservation Act (NHPA). On Tuesday another voice weighed in. “The Permitting Window is Closing,” by Tahra Hoops of The Rebuild urges Democrats to make NHPA reform a priority and negotiate a bipartisan agreement. However, because of the problems associated with future energy supplies, the call for support should be directed to all sides.

NHPA is one of two significant federal statutes that govern activity on federal lands. Although good data on costs and delays does not exist, a paper from earlier this year estimated that, absent reform, the cost of both statutes for just outdoor wireless facilities would be $2.2 billion over the next decade. Overall economic harm would total $7.5 billion. This is equal to 18 percent of the Broadband Equity Access and Deployment program. The study found that: “the current permitting process adds unnecessary costs for wireless infrastructure and service providers and delays the deployment of higher-capacity networks and innovative services in the United States.”

 

 

NHPA requires federal agencies to evaluate the impact of federal undertakings on historic property. Section 106 requires agencies to identify historical properties that may be affected by a proposed undertaking and assess whether the action would affect those properties. Broadband deployments are considered undertakings and therefore require a more detailed study.

Ms. Hoop’s analysis looks at NHPA primarily through its effect on electricity markets. A combination of growing demand and supply constraints has caused energy prices to rise sharply over the last few years. Ms. Hoops points to data from the Energy Information Administration showing that the cost of electricity rose 42 percent over the last five years. On average, households spent $110 more in 2025 than in 2024. This causes a slew of problems. One is that the backlog in rights-of-way approvals prevents a great deal of clean energy from connecting to the electric grid. To make things worse, the reduction in supply causes power plants to ramp up their use of coal and oil.

Second, U.S. policy prioritizes goals that, if pursued, will require tremendous amounts of new electricity. A key aspect of U.S. climate policy is the electrification of everything from vehicles and air conditioning to energy storage. Even if the electricity to power these machines is coal, electrification will still require large increases in supply. Then there is artificial intelligence (AI), which requires incredible amounts of electricity to power data farms and run the information networks needed to connect AI to the rest of the economy. Without a modern sophisticated collection of networks, including connections to the power grid, AI will not amount to much. Under current policy, AI capacity and needs are forecast to rise rapidly, so any policy that makes it easier to build and connect power plants on federal lands helps advance AI.

Permitting reform can be accomplished. Utah’s State Historic Preservation Office digitized decades of paper records into a GIS system in 2017. Today 98 percent of its reviews clear within seven days, saving the state roughly $250,000 per year. The Bipartisan Policy Center recently published a paper on possible permitting reforms for the NHPA. Commonly mentioned changes include tighter time deadlines. reducing the number of properties covered by the Act, limits on judicial review, and digitizing records.

NHPA reform will have lots of benefits. The environmental ones are not always clear but as Ms. Hoops says: “[a] technology-neutral permitting overhaul is a net-clean policy by simple arithmetic. Speeding up everything speeds up clean energy most, because clean energy is what’s waiting in line.”

A reduction in federal permitting time and costs will speed up deployment projects and reduce the cost of spreading broadband to all parts of the country. Finally, shortening the permitting process will reduce the cost and time associated with finding new sources of electricity and connecting them to the grid. That has a tremendous effect on the growth of AI. As stated before, this is one of the key constraints to the buildout of the new information networks needed to convey, compute, and control the massive amounts of data needed to support AI.

Congress is currently considering a number of reform bills including the Historic Preservation Fund Reauthorization Act (H.R 3416). Last session a bipartisan bill passed committee but members were unable to seal the deal. The environmental, power, and scientific benefits remain great. Let’s hope they do this year.

Gene Simmons is Right: Pass the AMFA Now!

Gene Simmons, the co-founder and bass player for KISS, the iconic rock band, has a short but important op-ed in today's Wall Street Journal. The title, "EU and Big Radio Gun for Musical Artists," may be eye-popping in keeping with Gene Simmons' persona, but the message is on point.

 

The op-ed explains that the U.S. is one of the few developed countries in the world that allows AM and FM radio stations to play music without paying royalties to the songwriters and performers. In 2020, the European Court of Justice held that radio stations in EU countries had to begin paying American artists when they played their songs. According to Mr. Simmons, music artists are receiving nearly $300 million per year in royalties as compensation for playing their works. But now, the EU is threatening to cut off those payments under what it calls "material reciprocity." In the U.S., the radio broadcasters continue to refuse to pay royalties on the artists' copyrighted songs, so the Europeans say they may cease payments.

 

Mr. Simmons urges that Congress pass the American Music Fairness Act. The legislation would require the payment of performance royalties by large national radio station groups in the U.S., while requiring minimal royal payments from small local broadcasters. Free State Foundation scholars have been urging passage of the AMFA for years. It's not fair for American songwriters and performers not to be compensated for their copyrighted work – the product of their labor, which is their livelihood. That's the "fairness" aspect of the AMFA.

 

But in a very important sense it's also not very American either. The U.S. Constitution's Copyright Clause gives Congress the power, "in order to promote the Progress of Science and useful Arts," to grant artists the "exclusive Right" to their works. This exclusive right is intended to ensure that artists are compensated for their creative labors by securing copyrights. Indeed, Intellectual Property rights are the only "Rights" actually recognized in the Constitution of 1787.

 

So, in this year in which we are celebrating America's 250^th birthday, with the Declaration of Independence and the Constitution as foundational backdrops which undergird the success of the American experience, there should be even more urgency for Congress to pass, and for President Trump to sign, the American Music Fairness Act.

Maryland Ranks Bad for Business: Even This Left-Leaning Study Can’t Save It

On CNBC’s 2026 Top States for Business list released last week, Maryland ranks #36 overall for best business climate in the nation for business, worse than it ranked last year at #32 (1st=best for business; 50th=worst). The study evaluates all 50 states using 138 metrics across 10 categories of competitiveness.

Maryland has long struggled in similar business climate rankings (many of which CNBC incorporated into its scoring for this year). For example, on the Tax Foundation’s State Tax Competitiveness Index, Maryland ranked #46 in FY26. And on Cato Institute’s 2023 Freedom in the 50 States index, Maryland ranked #47 regarding regulatory freedom and #35 regarding fiscal freedom.

What stands out about the CNBC study is that its scoring leans "left" in several categories. Even with this progressive scoring boost, Maryland still stands at a mediocre overall (#36). Maryland avoids the bottom 10 ranking thanks primarily to "Quality of Life," "Technology and Innovation," "Education," and "Infrastructure" – categories with some of the heaviest weighting for progressive and market-interventionist policies.

For example, the Quality of Life category rewards states with more federal research funding, “livable wage” laws, union and collective bargaining protections, and even pro-abortion policies.

Maryland’s weak #36 overall ranking stems primarily from its dismal #49 ranking in the study’s "Economy" category – calling Maryland out for having one of the worst economies in the nation. In the "Economy" category, Maryland fell behind West Virginia (#48) and beat only Rhode Island (#50).

This near-last ranking on "Economy" (#49) is because Maryland scored poorly on factors like GDP growth, job growth, and overall budget picture including spending, revenues, and reserves. The "Economy" category also includes factors like the number of major corporations headquartered in each state and health of the residential real estate market. Maryland also ranks poorly on the "Cost of Doing Business" category at #44, which includes things like tax climate and related costs.

Most nearby states rank better overall: Virginia (#3), Pennsylvania (#13), and Delaware (#32). So, it’s no surprise that Marylanders are voting with their feet – a problem I wrote about here.

The General Assembly and Governor Moore need to get serious about improving Maryland's ability to attract and grow businesses. They must remember that at the end of the day, it’s everyday residents – Maryland's consumers – who benefit from a stronger economy and lower costs of doing business.

The Growing Realization That AI Needs Modernized High-Capacity Information Networks

It is becoming increasingly difficult to avoid discussions about artificial intelligence (AI). There is a growing consensus that AI broadly defined will have a major impact on virtually every sector of the economy. A growing number of experts believe that the impact will not stop there. Like railroads, electricity, telephones, steam engines, and the Internet, AI’s impact is expected to be large enough to affect the way we live. But, as Free State Foundation scholars have written, this will require massive investment to modernize the nation's information networks and to keep them robust.

Most of the attention on AI is focused on building models that will consume massive amounts of data and compute complex problems that are increasingly beyond the ability of humans to solve. A lesser concern has been the energy and, to a smaller extent, water networks required because of their role as major inputs into data centers and power plants. However, AI will also have a large impact on other networks. One of the most important will be the nation's information networks. 

 

In the past, most of the focus on networks has been on extending broadband to all people, a job that is nearing completion as broadband availability becomes ubiquitous. Over the past year or so an increasing number of leaders and organizations have begun to point out the strong interdependency of AI and the information networks. The result is a growing realization that the U.S. needs to devote an enormous amount of investment to networks that are larger, faster, and more self-aware than the existing infrastructure.

As stated above, there is already wide recognition of the strong linkage between AI and power supplies. For instance, Satya Nadella, CEO of Microsoft, has stated that the problem in the AI industry is not an excess supply of computation power, but rather a lack of power to accommodate all those CPUs. Jensen Huang, NVIDIA's CEO, has stressed that the U.S. is vulnerable because of its deficient energy supply. Finally, a report by the Center for Strategic and International Studies finds that the U.S. electricity sector is struggling to meet growing demand while maintaining low costs, improving system reliance, and reducing emissions.

Recently authoritative voices have expressed some of the same "supply-based" concerns about the information networks. These networks must convey, compute, and control massive amounts of data to massive amounts of computing power and back. Börje Ekholm, President and CEO of Ericsson, explained that “[a]s artificial intelligence (AI) moves beyond data centres into real-world applications like robotics, autonomous systems and extended reality, it depends on high-performance 5G today and 6G tomorrow.” John Saw, T-Mobile's President of Technology and Chief Technology Officer, believes that “6G to us is more than just an ‘XG.’ We think it's the foundation for an AI-native future that distributes intelligence across devices, the edge, and the cloud.” Finally, Ajit Pai, President and CEO of CTIA stated that: “AI without a strong wireless network is like a new car without a road.”

Others share these concerns. An informative report from the Fiber Broadband Association argues that “[t]wo historic trends are unfolding at the same time: the nationwide deployment of fiber broadband infrastructure and the rapid buildout of the infrastructure required to support artificial intelligence, quantum networking, and other emerging applications.” FBA's report says: “AI workloads require high-capacity east-west traffic within and between data centers. They require low-latency pathways between inference platforms and end users. They require resilient interconnection among geographically distributed facilities.” The report argues that the current grid is evolving from a centralized system into a highly distributed network incorporating renewable energy resources, battery storage systems, distributed generation, microgrids, and intelligent controls. Managing this complexity requires real-time visibility and coordination.

A recent CTIA report argues that AI requires networks to move data, coordinate real-time decisions, and interact 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:”

[I]t is now clear that AI traffic will strain existing wireless networks before the decade is out with huge new data needs, entirely new traffic patterns, and novel demands on wireless networks to do more than simply carry traffic….

[I]t will also require emerging 6G networks to be AI-native from the ground up with embedded intelligence to dynamically allocate spectrum, anticipate congestion, sense the physical environment, coordinate edge-compute workloads, and secure devices—all at machine speed.

Two final points. To maximize AI’s performance, the most important parts of the networks have to work differently than current networks. They will feature more east-west flows, lower latency, higher uploading speeds, and the ability to operate independently of humans. Second, the networks will have to be closely integrated into those of other industries, including healthcare, transportation, government services, and (of course) electricity.

In fact, building out modernized networks will require both fiber and wireless technology, as well as a lot of other inputs. Success will require massive investments in these modernized networks, most of which will come from the private sector. Given the large economic and security implications, public policy should concentrate on creating favorable conditions for private sector investment and working with allies to develop common standards and protections.

 

Congress and Regulators Should Follow NCTA’s Next Steps on AI-Driven Shortages

Surging demand for high-power AI chips is diverting scarce resources away from traditional chips that are used in broadband equipment. For example, the price of DDR4 memory – ubiquitous in broadband – has risen 700-800% year-over-year. NCTA – The Internet & Television Association has also emphasized that the problem extends beyond memory chips to substrate, the foundational materials on which chips are built.

An NCTA-led coalition of groups involved in deployment and operation of broadband services sent a letter on June 2 to Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick urging certain policy actions to expand chip production: “Ease constraints on alternative sourcing and product redesign by offering expedited validation and approvals for regulated products, along with flexibility for necessary hardware, firmware, or software changes. . . Identify and remove regulatory barriers that slow the expansion of memory manufacturing capacity, both domestically and internationally, to increase overall global supply.”

Promising policies under NCTA’s recommendations may include: streamlining regulatory and permitting requirements; reforming the Toxic Substances Control Act (TSCA) to speed up the review of new chemicals and substances necessary for innovation; allowing immediate expensing of foreign research and development costs; easing trade frictions by cutting unnecessary tariffs and customs barriers, expedite customs clearance procedures, and ensuring that semiconductor data can move freely across borders; and reforming high-skilled immigration for a robust workforce.

Broadband providers rely heavily on semiconductors to capture, process, and transmit data across their networks, making these shortages a direct constraint on their ability to operate, expand, and improve Internet service. And broadband providers are not alone. The coalition includes other sectors experiencing supply constraints, including automotive, medical technology, and retail associations.

State and federal policy responses to the shortages largely have relied on interventions in the form of grants, loans, and tax credits for domestic chip making and research. These interventions, like the 2022 CHIPS and Science Act, may indeed alleviate chip shortages but are subject to the typical flaws of government subsidies – they risk favoring selected companies and taxing Americans in the form of mounting government debt.

Encouragingly, there have also been some wins for more free-market oriented approaches to boost supply and slow the growth of increasing costs. In June, the FCC granted a waiver of certain router requirements that NCTA had petitioned for – I blogged about it here. The 2025 One Big Beautiful Bill Act restored expensing requirements for research and development (affecting all industries, not just chip-making). The OBBBA also let companies deduct the full cost of most new equipment and machinery in the year they buy it, particularly valuable for a capital-intensive industry like chip production.

Congress and regulatory agencies should build on NCTA’s recommendations and expand market-oriented approaches already supported by parts of the semiconductor industry, including the Semiconductor Industry Association.

Ultimately, persistent chip shortages translate into higher costs paid by consumers. When supply is stretched thin across industries, everyday products and services become more expensive – particularly in memory-heavy markets like broadband.

Congress and regulators must focus on finding market-oriented ways to bring these costs down for Americans.