Yet Another Call to Get Permitting Reform Done

Believers in the need for permitting reform received another boost on July 29 when two prominent voices co-authored a letter in Route Fifty calling for significant improvements in obtaining the government permits needed to start virtually all infrastructure projects. Brandon Tatum, CEO of the National Governors Association, and Jonathan Spalter, CEO of USTelecom, correctly note that maintaining global technology leadership will require significant investments in many fields. However, much of the current debate has centered around projects to extend broadband coverage to all Americans. Although both Congress and the Administration have made important strides in this issue, it is not clear that their efforts will result in lower costs or significantly faster permits.

The authors do a good job of putting the problem in perspective. They correctly point out that:

America is entering a period of extraordinary infrastructure need — driven by artificial intelligence, advanced manufacturing and data-intensive technologies. The country will need major expansions in electricity generation, transmission capacity, wireless infrastructure, fiber networks and more, simply to remain competitive, let alone to continue to lead the world and ensure future economic opportunities reach everyone. 

In a previous Perspectives from FSF Scholars, I pointed out the extraordinary demands that AI and related technologies will have on information networks. I also made a powerful argument for permit reform to allow contractors to shorten the time and costs of obtaining government approval to use rights-of-way. This is especially important for broadband projects. With the Administration’s Build America initiative and a $42.45 billion Broadband Equity and Access Deployment (BEAD) program, the pressure to complete projects extending broadband coverage to all Americans is likely to increase. Unjustified permitting costs and delays may well adversely affect the success of these projects. Broadband is part of a larger issue in which bureaucratic conservativism and lack of accountability result in long delays. In some cases, a lack of funds and/or expertise may also be part of the problem. Unfortunately, the cost of these delays is often hidden. Congress and the Administration have taken some positive steps: Senate leaders are discussing a broad bipartisan package for permitting. Most of the focus has been on streamlining the National Environmental Policy Act review process. The House of Representatives has passed reforms including the PERMIT Act and the SPEED Act aiming to set enforceable federal permitting timelines and address judicial review delays. In 2018, the FCC promulgated rules for Small Cells that set maximum time limits for deciding permit requests and restrictions on the fees agencies can charge contractors. It also proposed rules to speed both wireless and wireline deployments. Questions remain whether these good faith efforts will result in meaningful progress in obtaining broadband rights-of-way, let alone permission for other forms of infrastructure. The jury is still out on that. Each effort has been opposed by state and local governments arguing that neither the Communications Act nor the Constitution give Congress or the FCC the power to interfere with their permitting requirements. Although the BEAD program offers state and local governments the promise of broadband expansion, it also imposes a significant demand on local resources. Agencies with tight budgets may face a significant increase in workloads. The BEAD program currently contains $21 billion in unallocated funds. It would make sense to use at least some of that money to help agencies streamline their permitting processes. According to the Route Fifty letter, Massachusetts and West Virginia have implemented significant process improvements that could be extended to other jurisdictions. Most of "Build America’s future lies in its own hands. Subjecting projects to unnecessary costs and unreasonable delays frustrates the public will. As Tatum and Spalter say: “let’s build.”

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.

PRESS RELEASE: The Supreme Court Confirms Agency Commissioners May Be Fired at Will

 

Free State Foundation President Randolph May issued the following statement regarding the Supreme Court’s decision today in Trump v. Slaughter:

“The Supreme Court has now confirmed the handwriting on the wall. The president may fire, without cause, members of what were formerly known as ‘independent’ agencies, including FCC commissioners. The Court held, correctly in my view, that this power is dictated by the Constitution’s separation of powers scheme. 

As I have pointed out for years, it is highly likely that, even absent the Slaughter decision overruling Humphrey’s Executor, the president always has possessed the authority to dismiss FCC commissioners at will. This is because the Communications Act, unlike the FTC Act and other statutes, doesn’t contain at provision even purporting to limit the president’s dismissal discretion. Of course, pursuant to the Communications Act, the FCC still needs a quorum to operate, which means three confirmed commissioners."  

PRESS RELEASE: The USF Doesn't Top 40%

The following may be attributed to Free State Foundation President Randolph May:

“On June 3, I issued a press release stating that the FCC was expected soon to announce that the USF contribution factor (aka the “USF tax”) would top 40% for Q3 2026. Well, I was wrong, and I’m always happy to correct the record. The good news is that on June 12, the FCC issued a Public Notice reporting that the USF contribution factor for Q3 2026 will be only 38.8%. The bad news is that USF tax, at 38.8%, will be near the highest it has ever been, if not the highest. As I said a week ago, the current USF regime is in desperate need of a meaningful market-oriented overhaul that fits today’s market and technological environment."  

PRESS RELEASE: "Misusing 'Affordability' in Broadband Subsidies Is Wrong"

 

The following statement should be attributed to Free State Foundation President Randolph May regarding a proposed bill titled ‘‘Prioritizing Rural Broadband Affordability Act" introduced by Rep. April McClain Delaney (D-Md.) and Rep. Rob Bresnahan (R-Pa.):

“This bill, which requires the Agriculture Department to consider ‘affordability’ of broadband service in determining whether an area is ‘unserved,’ is unnecessary, unworkable, and mischievous. The bill lacks a definition of ‘affordability,’ nor could one be formulated administratively that would be efficient and not invite waste of taxpayer dollars. More fundamentally, whether an area is unserved should not be linked to an ‘affordability’ determination. Concerns regarding ‘affordability’ properly should be addressed through provision of targeted support to low-income households.

Senate Hearing Should Consider Replacing the Public Interest Standard

By Randolph May

On December 17, the Senate Commerce, Science, and Transportation Committee is holding an FCC oversight hearing. Conducted properly, oversight hearings can be valuable tools in assisting legislators, and the public too, in understanding an agency's work – what an agency is doing, and why. And, sometimes, an oversight hearing can lead to the subsequent introduction of legislation to reform the agency's enabling statute.

That should be the case regarding the Communications Act – specifically legislation replacing the public interest standard.

But it's a good bet that some Democrats on the committee, perhaps all of them, will use most of their allotted time to lambaste FCC Chairman Brendan Carr, especially regarding his remarks in "l'affaire Jimmy Kimmel." Without rehearsing all the details here, you'll recall that Chairman Carr issued what was reasonably taken to be a threat that, unless Kimmel's show was taken off the air, the broadcast station owners airing it would suffer adverse consequences. After all, by virtue of the licenses the FCC issues requiring that broadcasters operate consistent with the "public interest," the agency exercises substantial power over their operations. And if broadcasters wish to transfer or assign their licenses to another entity, the FCC first must find the transaction is in the "public interest."

At the time of Chairman Carr's remarks regarding Jimmy Kimmel, I said that, regardless of whether they rose to an actual violation of the First Amendment, and despite what I considered to be Kimmel's factually inaccurate and insensitive monologue regarding Charlie Kirk's assassination, I didn't like what appeared to be Carr's threats directed at the broadcasters. I stand by that.

But when the Democrats and those on the Left get in high dudgeon railing at Carr at the hearing or otherwise, the theatre is a bit too contrived. For over the long history of the FCC, it's been Democrats in Congress, and those sitting on the FCC, who have been most persistent and insistent in wielding the FCC's public interest authority to dictate or influence broadcast content. I recited some of the historical evidence here. And, significantly, it was a Democrat-controlled FCC that employed the "Fairness Doctrine," with its requirement that broadcasters present balanced coverage of issues of public importance, as a content regulation sword. Most notably, the Fairness Doctrine was invoked, successfully, to silence conservative broadcasters. See Red Lion Broadcasting v. FCC – which now is ripe for history's constitutional dustbin.

 

Moreover, with the current focus on the FCC's "news distortion" rule – a prohibition grounded in the FCC's public interest authority – it's worth recalling the April 2018 letter to then-FCC Chairman Ajit Pai signed by twelve Senate Democrats. That letter urged the FCC to consider sanctioning Sinclair Broadcasting Group, including revoking its broadcast licenses and preventing it from acquiring others, allegedly on the basis that Sinclair stations engaged in "news distortion" inconsistent with its public interest obligations. (Some of the twelve Senators who signed that April 2018 letter likely will participate in the December 17 oversight hearing.)

Nevertheless, my purpose today is not to tote up a scorecard demonstrating that one side of the aisle or the other, either political or philosophical, has abused the public interest standard more than the other side. That's backward-looking and likely counterproductive. Rather, consistent with the legislative purpose of an oversight hearing, I want to suggest – as I have many times previously –a more productive way forward.

The Commerce Committee Senators, led by their able, reformist-minded Chairman Ted Cruz, should use the oversight hearing, at least in part, to begin a serious discussion about replacing the FCC's public interest standard, upon which the agency's program content regulation, including its news distortion rule, is grounded. It should be replaced with some form of consumer welfare standard more attuned to the current competitive environment and technological dynamism of the marketplace. To the extent there are special considerations, such as maintaining the availability of communications relating to public health and public safety, or universal service, they can be delineated and dealt with discretely.

As I recounted recently in this recent FSF Perspectives, The Public Interest Standard: The Historical Legislative Context, "for almost two decades now, Free State Foundation scholars have been advocating that any meaningful updating of the Communications Act must include replacement of the public interest standard with one oriented towards a proper assessment of consumer welfare and marketplace competition." You can find links to that advocacy in that paper. And throughout the FCC's website you can find numerous papers each year documenting the dramatic changes, driven by relentless technological innovation, that have occurred in the media and telecommunications marketplace in the last several decades.

The long and short of it is that these conspicuous marketplace changes have rendered obsolete the original anti-monopoly and "scarcity" rationale that was the principal impetus for inclusion of the public standard in the Communications Act of 1934, which itself merely incorporated the standard from even earlier legislation.

The public interest standard, malleable and ambiguous as it is, has been a ready means for expanding the FCC's authority in the hands of those commissioners who wish to use it for that purpose. And, more particularly, for those who wish to use it in this way, it has been the means by which the agency has restricted speech, or preferred some speech over other speech, by regulating program content or threatening to do so. All under the claim of furthering the "public interest."

As far back as 2001, I argued in a law review article that the public interest standard is so indeterminate that it constitutes an unconstitutionally unintelligible delegation of legislative authority. The Supreme Court has yet to agree, but I suspect that Chairman Cruz might be sympathetic to the argument. Justice Felix Frankfurter, a New Deal acolyte, proved my point over six decades earlier in the landmark FCC v. Pottsville Broadcasting Co. (1940) case when he declared that the public interest standard "is as concrete as the complicated factors for judgment in such a field of delegated authority permit."

Read Justice Frankfurter's elucidation again. I challenge you to tell me what it means.

In other words, the public interest standard is standardless. And this means it is inconsistent with the rule of law and invites abuse. The Senate Commerce Committee should begin to consider replacing it with some form of consumer welfare standard fit for the Digital Age.

FSF Announces the Appointment of Joseph V. Kennedy as Director of Policy Studies and Senior Fellow

Free State Foundation President Randolph May announced on December 4, 2025, that Joseph V. Kennedy, an accomplished economist and lawyer with deep public policy expertise and experience, is joining FSF on a full-time basis as Director of Policy Studies and Senior Fellow, effective January 1. 

Previously, Mr. Kennedy served as Senior Principal Economist at the MITRE Corporation. Prior to that, he served as a Senior Fellow at the Information Technology and Innovation Foundation. Mr. Kennedy’s former positions include serving as a Senior Officer at The Pew Charitable Trusts; Chief Economist for the U.S. Department of Commerce; Senior Economist for the U.S. Congress Joint Economic Committee; and General Counsel for the U.S. Senate Permanent Subcommittee on Investigations. He is also an Adjunct Professor at Georgetown University.
 
Dr. Kennedy received his Ph.D. in Economics from George Washington University, his M.S. in Agricultural and Applied Economics from the University of Minnesota, and his J.D. from the University of Minnesota. He received his B.S. in Foreign Service from Georgetown University. Mr. Kennedy has written two books and more than 70 articles. He has provided legal and economic advice to members of Congress, Cabinet secretaries, and top business executives. Much of this advice has been directed at public policies involving technology, competitiveness, and the social contract.
 
In announcing Dr. Kennedy’s appointment, Mr. May stated: “I am very excited that Joe Kennedy is joining the Free State Foundation as Director of Policy Studies and Senior Fellow. With his outstanding academic background in both economics and law, and his real-world professional experience in both disciplines, Joe will play a major role in leading FSF’s law and policy work in the communications, Internet, intellectual property, and other related fields. FSF already is widely acknowledged for its thought leadership in these areas, and in his senior position, Joe will further enhance our leadership position.”
 
Upon accepting FSF’s offer, Mr. Kennedy stated: “I am thrilled to be joining an institution that is so highly regarded for the quality and impact of its free market-oriented work. My goal is to use my decades of expertise and experience in law and economics to help make FSF even stronger and even more respected than it already is and to help expand its work into related fields. I look forward to the challenge ahead.”

PRESS RELEASE: FSF Says the Proposed Charter - Cox Transaction Will Benefit Consumers

Today, Free State Foundation President Randolph May and Senior Fellow Andrew Long filed comments with the FCC in the agency’s proceeding to consider the proposed Charter - Cox transaction. Below are excerpts from the Introduction and Summary and the Conclusion that capture the essence of FSF’s comments: 

"We evaluate the likely relevant impact that the proposed transaction would have – that is, how it might affect the public interest, convenience, and necessity – given the specifics of the proposal and, critically, the broader competitive context that exists today. In short, we find there is ample evidence that the proposed Charter/Cox transaction, if approved, would benefit consumers by invigorating competition in the broadband, mobile, and video marketplaces. We also conclude that, given the de minimis extent to which the applicants' footprints overlap and the indisputable widespread existence of competitive pressures, there appear to be no substantial transaction-specific harms that might offset those benefits.”

 

*     *     *

"[T]he combination of Charter and Cox promises numerous consumer benefits. These include lower costs, greater choice, and additional innovation in traditional cable offerings (broadband and video) fostered by an enhanced ability to compete with often much larger rivals, including Big Tech platforms with global reach; (2) the expansion of Charter's hybrid MVNO offering into Cox's footprint combined with lower costs through greater scale; and (3) the "onshoring" of Cox customer-service jobs. And given the lack of any meaningful overlap in service territories, not to mention the high level of third-party competition in all three marketplace sectors, there appears to be little, if any, basis for concern that the transaction could result in significant harms."

PRESS RELEASE: The USF Fund May Be Constitutional, But It's on Shaky Ground

 

Free State Foundation President Randolph May issued the following statement regarding the Supreme Court’s decision in the FCC v. Consumers’ Research case:

“While the Supreme Court upheld the constitutionality of the FCC’s universal service programs, I hope the challenge at least served to highlight the long-standing problems with the nearly $10 billion per year Universal Service Fund. Without meaningful substantial reform, the USF fund, as it exists now, is unsustainable. Consumers of traditional telephone services are now paying a tax of 36% on all their calls as the contribution base continues to shrink. Congress needs to get serious about engaging in a top-to-bottom examination of the program to determine its size and scope going forward, how it should be funded, or whether it should even exist."