Fast, affordable Internet access for all.
Navigating the Broadband Horizon and ACP's Future - Episode 584 of the Community Broadband Bits Podcast
This week on the podcast, Christopher speaks with Blair Levin, the former executive director of the National Broadband Plan, to discuss the landscape of broadband and telecommunications and its significance moving into 2024.
Chris and Blair delve into discussions on the FCC and its imperative to address critical issues such as the Affordable Connectivity Program (ACP) and the fate of Title II.
The conversation continues with topics on the potential for industry mergers, the evolving landscape of fixed wireless and fiber networks, and the persistent challenges associated with achieving universal service and bridging the digital divide. It concludes with touching upon the critical fiber-copper divide and underscores the importance of local government initiatives in expanding fiber networks.
We want your feedback and suggestions for the show-please e-mail us or leave a comment below.
Listen to other episodes or view all episodes in our index. See other podcasts from the Institute for Local Self-Reliance.
Thanks to Arne Huseby for the music. The song is Warm Duck Shuffle and is licensed under a Creative Commons Attribution (3.0) license.
Blair Levin (00:08):
So there's a lot that's going to happen in 2024. 2023 did not turn out to be that significant a year, in my opinion, in part because the biggest issue, which I think is the affordable connectivity program, did not get resolved and that would've been the most important thing.
Christopher Mitchell (00:25):
Welcome to another episode of the Community Broadband Bits podcast. [00:00:30] I'm Christopher Mitchell at the Institute for Local Self-Reliance in St. Paul, Minnesota where there is precious little snow on the ground and even less ice on the lakes. It's very depressing. I'm here though with one of my favorite guests. We have Blair Levin, a man who is the former executive director of the National Broadband Plan. Before that, he was the chief of staff at the FCC. He is currently an equity analyst on telecom policy and a non-resident fellow at Brookings. [00:01:00] Welcome back, Blair.
Blair Levin (01:01):
Thank you. Chris, I'm very sorry about your lack of snow and ice.
Christopher Mitchell (01:06):
Well, if you could do anything about it, I'm sure you would.
Blair Levin (01:08):
I would. You know me,
Christopher Mitchell (01:10):
The last year we talked about a number of expectations. We're going to revisit a few of those and talk about what's coming. First of all, let me just break the ice as it were by asking you for some reflections maybe on 2023 and heading into 2024. What are you thinking about?
Blair Levin (01:28):
What I'm thinking about is traditionally [00:01:30] 20 a presidential election year is the slowest year for policy analysis. In terms of markets, basically nothing happens that affects markets other than the election. And so as an equity analyst in a presidential election year, I would be basically writing one note. If so-and-so is elected. This happens, and if the other person's elected, that happens. But this year, very, very different.
Christopher Mitchell (01:56):
Especially because ordinarily at this time you might be looking at results of Iowa [00:02:00] and saying, well, if this person's elected, we could go this way, but we kind of know who we're going to end up with. A lot of people don't know it yet, but we know.
Blair Levin (02:06):
Yeah, and we could spend the whole time talking about that. But my point is it's a very consequential year, partly because the FCC didn't get a majority Democrats until last fall, and so they've got to finish up the Title II and there are certain things they've passed something on digital discrimination, but whether they're going to do any enforcement, if it's not going to happen next year, it's not going to happen. But the big thing is the following. Number one, we're going to know a [00:02:30] lot more about universal service and how we close the digital divide. We have the BEAD program, we have the Universal Service Program being challenged in the courts. We have the Affordable Connectivity Program probably running out of money sometime in April. And I would say from my own personal point of view, that in a way is the only issue in the sense that that issue affects more people more dramatically.
It affects broadband more dramatically than anything else we're going to talk about. So those are very big things. We've also got dish, [00:03:00] the ironic thing is the biggest policy issue is not about policy, it's about markets. If dish succeeds, then the way you think about policy is going to be different. If Dish fails and goes into bankruptcy, then how you think about how do we deal with the fact that we basically have a duopoly on fixed and a ly on wireless, and what are the implications of that? So that's a really big thing. The Supreme Court is going to do some very big cases. So there's [00:03:30] a lot that's going to happen in 2024. Not to mention what's going to happen in 2025. 2023 did not turn out to be that significant a year, in my opinion. In part because the biggest issue, which I think is the affordable connectivity program, did not get resolved, and that would've been the most important thing.
Christopher Mitchell (03:50):
It seems like what they say about car accidents, anything you can walk away from, right. That's how I feel about years now.
Blair Levin (03:57):
Yeah. Yeah. We're walking away from 2023. [00:04:00] It's not known other than we'll walk away from 2024 or whether the car wreck will be more dramatic.
Christopher Mitchell (04:06):
So I agree with you regarding, I think the thing that impacts the most people in a very real way is the Affordable Connectivity Program slated to run out of money. We're preparing, we're trying to dig in to really better understand exactly what the implications are, the timings, what's going to happen. And so for people who aren't aware, I mean, I think our forecasts are very early part of Q2. We [00:04:30] expect it to run out of money, and so preparations must be underway everywhere for how they're going to deal with that. We do not expect Congress to do anything about it. The White House might be able to move some money around, but it seems like that's all the White House is doing right now. I don't know how much they can do that for the amounts that we're talking about, but that then leads us into USF reform. So why don't we start with ACP and then move into the prospects for universal service reform. When you look at the ACP, [00:05:00] do you have any hope that there is not substantial disruption of that program this year?
Blair Levin (05:06):
So what my years of working on Wall Street have taught me is to think not in terms of black and white, but rather probabilities. And I would say, do I have hope? Yeah, but the probabilities are low that there will not be disruption, and there are multiple problems with disruption, including the fact that a lot of low income people, part of the problem they're going to have is they're going to default. [00:05:30] They're not going to understand, they don't trust it's going to be harder to make the program work next time. Eventually, we are going to fund this. There are various reasons I have confidence of that. It's just that the stars have not aligned for us to refund it this time.
Christopher Mitchell (05:47):
And I do think a lot of the people that are behind those decision-making, I think aside from perhaps having some choice words for them, I don't think they always appreciate how much damage is about to be done for the different [00:06:00] nonprofit organizations and social service folks that have been getting people to sign up for ACP and what damage it will do to their reputations and whatnot. In good conscious, I don't know that we can encourage people to sign new people up for ACP right now because of the changes that are coming. Now, as I understand it, the ACP will require customers to consent before their bills go up. Many of them presumably won't read the emails or get the letters that are mailed to them, warning them that this is about to happen. And so [00:06:30] they'll either be cut off or the companies will happen to be going to significant collections. I don't really care that much if Comcast has a lot of problems, but there's a lot of ISPs out there that are smaller. And frankly, I don't think companies like Comcast deserve to have a big headache over a program like this. So to me, it seems like an unmitigated disaster that we are sailing into.
Blair Levin (06:51):
Yes, unmitigated disaster. There are other words that we shouldn't use on the radio except that this is a podcast. But [00:07:00] yeah, it's going to be awful. And look, again, as an equity analyst, I would say it's the single biggest cloud in the near term hanging over the companies. It is curious to me that the company have spent a lot of money fighting title two fighting the digital discrimination issue, and I understand why they're fighting it. And I'm not saying they were being irrational. I am saying that if they had taken that money and used it on various ways [00:07:30] of getting certain messages out and that we could go into what those messages should be about ACP, I think ACP would be in much better shape, and they're literally going to lose billions of dollars. And the disruption is what's really going to be problematic to them.
I mean, nobody wants to suddenly cut off Johnny who's a fourth grader, who's doing great in school because he has access to broadband in the home and he's getting straight A's, and he'll be the first kid in his family [00:08:00] to go to college and then suddenly in May, he's got no broadband. He gets all C'S depressed. I mean, that's a story that is going to be duplicated a lot of times. And Comcast does not want that. You don't want that. I don't want that. I don't believe anybody in the Congress wants that. But what we see happening throughout the federal government is things we don't want to have happen, happen anyway for a variety of bizarre reasons.
Christopher Mitchell (08:27):
So one of the things that we have hoped for [00:08:30] in terms of then getting back on track, because I think any solution that we see at this point that would put more money into ACP or an ACP like solution will come after that disruption has happened just because there's a pipeline effect for how fast things can happen. One of the things that's been talked about is USF reform, universal Service fund reform. We've seen no sign that Chairwoman Rosenworcel has any interest in doing this. She is somewhat timid [00:09:00] as it is. This is an election year. As you noted, all of the signs are suggesting to me that if the FCC were to take this on, it would almost require divine intervention.
Blair Levin (09:13):
Yeah, no. Look, the FCC is not doing anything on this. That's very clear. The FCC was required by the infrastructure bill to do a report to Congress on the future of USF after the B program and after all the other things that Congress has funded in the infrastructure bill and [00:09:30] other things. And frankly, look, I'm a big fan of folks at the FCI worked with a lot of them twice. They're dedicated public servants. But oh my God, the report was such a disappointment. The first thing the report should have done should have been to articulate, here are the potential things USF and the future may need to fund. We probably won't need to fund the CapEx of more than a very small number of projects anytime in the future, but we still need to fund [00:10:00] this and that or whatever. And here's a budget. Here's what we think is a reasonable budget for those things.
There was no economic analysis in the report. That's the first thing you have to do. It proposed a number of proceedings that the F CCC hasn't done. So no, there's a bipartisan effort in Congress, very doubtful that it'll result in anything in 24. I do think there's hope in 25 for Congress doing something regardless of what happens [00:10:30] in the election, because it is one of those issues where you can see a political consensus forming. But another wild card is the fifth Circuit, which in September herd on banc, which means all the judges a challenge, the current universal service program, they're probably going to decide against the FCC, but they might do it in a way that the FCC can quickly fix the problem, but they might do it in a way that totally blows up the program. I think that decision gets stayed. I think the Supreme Court takes [00:11:00] the case and I think ultimately the FCC wins, but I'm not, there is definitely going to be uncertainty about that. And if the Supreme Court in 2025 says that the current system, you can't do it, Congress has to fund the program, well then we're in a really different era. So there's a lot of challenges and a lot of uncertainty out there.
Christopher Mitchell (11:21):
And for people who haven't followed this very closely, this basically comes down to a way that I would put it is the judiciary is increasingly [00:11:30] hostile to the federal government acting in certain ways. And it is questionable whether the judiciary will allow an executive agency to determine how much money to collect and sort of have its own ability to raise funds outside of Congress and have this program that more or less operates forever outside of additional appropriations from Congress.
Blair Levin (11:53):
That is a fair summary of that. It's not clear that there's a certain majority for that point of view [00:12:00] in this case, in the cases where they have overturned federal agency authority, one consistent element is that there is a major industry interest in overturning it, which just happens to also coincide with a major industry, which is a major contributor to the Republican party. Not to get too cynical, but the So-called Major Question doctrine has not been applied as far as I can tell in a situation [00:12:30] where an agency is acting in a way that industry likes and industry is on the FCC side here. So I wouldn't give up all hope that the court's going to support the FCC and industry, but there are a number of judges who basically believe in this. so-called the doctrine that Congress should not be able to delegate the power to raise funds to an agency.
Christopher Mitchell (12:57):
That is a very nice way of putting it. I [00:13:00] really liked, I think it was Scalia who wrote that Congress does not hide elephants in Mousehole or something along those lines. Something like that. Yeah, and I can appreciate that. However, it's pretty clear that these folks believe that Congress does hide certain elephants in certain households and cannot hide other things in other places. So I would say once, I would agree with you that this is something that we see more from a Republican party that has departed from longtime norms [00:13:30] of action around a lot of this stuff. So that's USF reform. There may be hope in 2025 at this point. I have significant questions about how many commissioners we have depending on who controls the Senate, who's won the presidency. A lot of things will be up in the air for then. But I would expect that we will see a lot of disruption around ACP unfortunately this year.
And there'll be a hope of moving forward next year with a program [00:14:00] that frankly, I find increasingly hard to justify. And if not because I want it to be gone, but for reasons that you and I discussed last year, and if people want to check out last year's show from January, 2023, I encourage them to. But I want to move on to some of the other things we talked about there. We talked there about, I mean, I think it's about 18 months now from when it was clear that Fixed wireless was going to be taking significant subscribers from the big cable companies. I think some of the equity analysts expected that to slow down in 2023. [00:14:30] I'm curious if that did and what you're expecting in terms of fixed wireless in 2024. I
Blair Levin (14:35):
Don't think it slowed down. I think it is one of the biggest betts on Wall Street in terms of other than Dish. The other biggest bet I think on broadband is how far does fixed wireless taking share go? The general view that I tend to agree with is that in rural and extra areas where there's more spectrum, it can [00:15:00] take a significant amount of market share. It can keep growing. However, as those areas get more fiber, and as we use bandwidth for more and more things, there's just a race between these two different ways of doing it. Wireless can be cheaper, but if people really want to watch high definition 4K videos in three different rooms all streaming, they're going to have to do something other than wireless
Christopher Mitchell (15:27):
And even more so on Sunday night when all the neighbors are doing [00:15:30] it too.
Blair Levin (15:31):
That's exactly right. So I think there are some bandwidth constraints. There's not a lot of new spectrum coming online to the wireless guys anytime soon. So I think it is fundamentally a combination of technology and spectrum constraints in terms of limitations.
Christopher Mitchell (15:49):
Now, regarding the dish buildout, we talked before about, and I think I actually misspoke. I said Carl Bode, but actually I think I met Neli Patel who's been anti dish and [00:16:00] comical about it for a long time now. What have we learned in 2023, and do you think that 2024 will sunset and we'll know whether Dish will succeed or not?
Blair Levin (16:11):
We'll certainly have a better idea. A number of people, Colin Powell, secretary of Treasury, Ruben, have said things like if you make a decision with less than 20% of the information, you're making it too soon. But if you make it with 80%, you're making it too late. Wall Street tends to make it in that between the 40 yard lines, we're not there yet, [00:16:30] but we probably will be between the 40 yard lines by the end of the year. And Dish has met all the established metrics that the FCC has given it in terms of build out. So that's the positive case, but the fact that they couldn't get the option on the 800 megahertz that they had from T-Mobile based on the T-Mobile sprint deal and the Department of Justice consent decree, the fact that the stock is way [00:17:00] down, it's telling you that Wall Street is very, very skeptical of their ability to succeed.
And part of that's markets and part of it's just kind of ergen is facing a chasm in terms of capital constraints. That Wall Street is very skeptical that he'll be able to get over. I don't have a strong point of view on it because it's not what I do. Well, I will say simply that I believe that if he needs certain things from the government in order to get across that chasm [00:17:30] and that the government can reasonably give him that, such as allowing him to sell some spectrum, I think the government does that and the government is going to prioritize keeping him in the game and keeping that network as a potential fourth facilities based competitor. That is a very high priority,
Christopher Mitchell (17:50):
And that's why we're talking about it. I think there might be people who are wondering, Chris, why do you even care about this so much? And I think it has implications not only for mobile wireless [00:18:00] pricing and fixed wireless buildout potentially, but something that you and I talked about last year, which was a likely merger between a charter and a major wireless company or other things that will be more or less likely based on dynamics in the wireless market. Now I'm curious, would you have expected there to have been a major merger? It feels like 2023, we more or less avoided any of that. We didn't [00:18:30] see Comcast really gobbling up anyone. I think people are watching to see what happens with peacock and whatnot. But it feels like somehow we did escape a lot of mergers. And it seems like maybe there's action in the beltway that's threatening mergers in some ways, although you pay close attention to this, the court cases haven't always gone the way of the regulators trying to encourage competition. So there's a lot of different factors going on. What do you see regarding mergers?
Blair Levin (18:57):
Yeah, I certainly, I don't think I [00:19:00] projected any mergers of importance in 2023. The one news coming out of the FCC was the rejection of the TEGNA deal, which wasn't a merger and wasn't really about consolidation. It's still not clear to me what it was about exactly, but certainly I like other people did not think that though. I knew that the chairwoman had the option of having the bureau essentially kill the deal with a pocket veto. I didn't think that was what was going to happen, but it did happen, and I think [00:19:30] that ended a lot of investment in the broadcast realm. I'll come back to that in a second. But look, in the telecom realm, you can't have any more mergers between wireless providers. You can't have really any mergers between major cable operators. Altice may be for sale, but that's not likely. So the merger that people are looking toward is will there be a, we might think of as a convergence merger of a fixed wired network with a wireless network [00:20:00] with T-Mobile always being the one that people talk about, because at t and Verizon would have to divest too many assets.
Plus you have a situation where both the DOJ and the FTC are being tougher on mergers than they have been in the past. I think the window is going to open up again. And the reason why is if you were to announce a merger today, the odds are it would be decided by the winner of the election. If you think the winner's going to be Biden and you think that the DOJ [00:20:30] or FTC won't approve it, but you want to get it to court, you might as well offer it now. But if you think Trump's going to win, you might as well offer it now. So I think that the political window starts to open up, interest rates start to go down again. But where I think we're going to see it is on the media side. Now, we could really go down a rabbit hole with this one, but the deal that's being talked about is the Paramount Discovery Warner deal.
I am pretty skeptical of that because of the debt load of the companies [00:21:00] and for some other reasons. But if they proceed with that, it'll be a really interesting fight. We have not yet had a merger where the government has been forced to confront whether streaming is part of the video product market. At some point, they're going to have to address that question, and when they do, lots of other things start to fall apart. And obviously it affects Comcast, but I think it affects the whole ecosystem. And I don't want to take up too much time on that. It's too speculative. But when I think about mergers, there's a US cellular [00:21:30] merger. I think there'll probably be some announcement of a DBS merger, but I don't think those things are that big or important.
Christopher Mitchell (21:38):
The mergers between AT&T, Verizon or the big cable companies you had mentioned they have to divest too many assets. And I think there's also a sense that that would be a step too far, right? Kind of like Comcast buying Time Warner Cable is seen as a step too far, too much consolidation.
Blair Levin (21:58):
I think that's right though. It was [00:22:00] interesting because the precedent for blocking that deal, the Comcast Home Warner cable deal was a little bit tricky because it was really what was called the geographic expansion merger. Those are generally allowed because they're not competing in the same geographic market. But the D, the FCC were able to block it. Of course, charter was then able to buy it. So now we have two big cable companies, and that's probably a better thing. And it's interesting because they have different incentives. Charter does not own content. [00:22:30] Comcast does. On the other hand, they both have a similar incentive to, shall we say, use wireless both as defense and offense. You could see a joint venture in wireless between those. In fact, in a lot of ways you already see that though much more informal in terms of r and d and stuff like that. If Dish succeeds, I think it opens the door. And of course there's also the question whether [00:23:00] any of the tech folks are interested in these things. I think they know that certainly under the Biden administration, a major tech company buying almost anything of size is a problem. So I don't see that. On the other hand, under Trump, I think Comcast believes they won't be allowed to buy anything as long as they own M-S-N-B-C.
Christopher Mitchell (23:21):
Yes. No, I would expect that that would be the case. I mean, all the signs that I see among the political voices that I trust suggest [00:23:30] that a second Trump term would likely be one that is lawless in ways that we have not experienced in our lifetimes. I don't know that it's totally unprecedented, but even if it was precedent, it was a pretty ugly precedent back in those days in terms of the naked political power and whatnot.
Blair Levin (23:51):
I may be the only person who will hear this show who was alive during the Nixon administration and remembers very clearly the day Nixon [00:24:00] had to resign and remembers the Watergate hearing. And what I would simply say is his lawlessness was, shall we say, somewhat constrained.
Christopher Mitchell (24:07):
Right. No, I was actually thinking more like 18 hundreds robber barons type of stuff, teapot dome scandal,
Blair Levin (24:15):
Which is the 19 hundreds. But I think that's right, and particularly as to this, the notion that there's an old saying among autocrats for our friends', mercy, for our enemy's justice. If the notion is if you want [00:24:30] to get your deal done, the first thing we're going to look at is your relationship with us. That's very problematic, particularly for any companies that have content
Christopher Mitchell (24:40):
Right now. I did want to slide in to the at t and Open ran before we wrap up wireless. Totally. Which there was a light reading discussion with Mike Dano who I've enjoyed reading. I still don't fully understand all the open ran stuff, but I am excited about anything that is open [00:25:00] in terms of moving away from proprietary systems and whatnot. And it seems like this was kind of a step in the right direction towards more openness. And at the same time, is nakedly about at and t just lowering the cost of the gear that it buys is my sense of, but that is tied up with whether or not dish wins, I think is to some extent this battle over proprietary versus a more interoperable technology in the future. And that is happening.
Blair Levin (25:28):
Yeah. Yeah. Look, [00:25:30] the open ran thing is very complicated and difficult. It certainly was very interesting to everybody on Wall Street what it meant for at t, what it meant for Erickson, who they struck the deal with, what it meant for Nokia, who essentially was effectively the loser on that one. But look, it's a big problem for security. I mean, we're going to go outside of the United States now to say that Huawei has done much better than people hoping in the United States and in terms of becoming kind of a dominant [00:26:00] firm around the world for equipment and getting all the benefits of the economies of scale. And that's a very disturbing thing. And so the question is how does the United States have a policy that enables not just consumers in the United States to have access to the best possible services at the lowest possible price, but also how the US model and other US companies can lead the world? That's a big problem. I hope [00:26:30] the at TO ran issue moves us in that direction. At t was obviously more interested in the lower prices than the word open. I don't think they were doing it out of a patriotic thing. I'm not saying you're not a patriotic company. I'm just saying
Christopher Mitchell (26:45):
I'll say it. You don't have to.
Blair Levin (26:48):
But they clearly saw an economic opportunity, but I think it's a much longer run thing. And look, the 5G thing is in a way already run its course. [00:27:00] And so what we're talking about is will the architecture of six G be an entirely different architecture?
Christopher Mitchell (27:06):
To some extent. I do feel like, and this is one of those things I'll just be upfront about it, there is a fair amount of anti-Chinese sentiment that is racially motivated. And there's also sentiment from people that I read and whatnot who recognized that China is an authoritarian country, that Russia wants to undermine our system of a more open [00:27:30] society. And so I do feel like if we're honest about it, we have to choose between whether we want the United States government possibly able to peek into traffic or whether we want China possibly ever able to peek into traffic. Both of them strongly deny that they would ever, ever do that sort of a thing. But I think it's pretty clear that it's on the table for either one in different circumstances.
Blair Levin (27:51):
There's privacy issues, there's national security issues, there's a huge host of issues. Those issues are not going away. [00:28:00] The election will determine a lot of issues. I'm not sure it'll determine that one because I think both Biden and Trump have a similar view that China is a competitive threat, but it is very difficult, in my opinion, to get a bunch of countries to align with your point of view when your whole mantle is America first when you're saying, you do what I want because this is good for me. I don't know. I've done a lot of things in politics and I don't think I've ever convinced [00:28:30] anyone vote for something because it's good for me. That's really the way you try to do these things. And I think in terms of international relationships, whether we'll be able to have any kind of consensus with NATO or others on these kinds of issues, very questionable in my mind. If we have an American first foundation.
Christopher Mitchell (28:53):
Well, and there was a paper that I honestly did not understand also at the time that was advanced within the Trump [00:29:00] orbit during his presidency in which they called for a federal, I think publicly owned National 5G Network, A number of people that I think of his allies and who are for public ownership, I think were intrigued by that. My organization, we've always been for local public ownership, and we do not like the idea of federal public ownership in a lot of circumstances. I mean, depending on the circumstance, it might make more or less sense, but that was not intriguing to me oddly enough, [00:29:30] but could,
Blair Levin (29:31):
It was a very interesting couple of weeks. And the rumor there was a big leak of it in my world, a lot of speculation about who leaked it a couple of weeks before the State of the Union. I think the 2018 State of the Union. And if it had gone into the State of the Union, it would've been a very interesting thing. But it was being driven by various people, including people like Carl Rove and others with great Republican credentials. And [00:30:00] the defense Department was apparently involved as well, but it went nowhere.
Christopher Mitchell (30:07):
But I guess my point is just to remind people that these things are not always predictable in terms of who gets a presidency or at a given time and what results from it.
Blair Levin (30:16):
Well, what I would say is the normal left right analysis does not apply that what you see is Republicans, you have the states of Florida and Texas. This is a little bit off of our mainline, but basically [00:30:30] adopting laws that say, we are going to give you a must carry regime for social media. Well, that's a pretty significant federal mean state government intrusion into private property, not what you usually think of when you think of Republicans, but what you should think of now. So there's all kinds of things where the normal left does not make sense. It is not predictive or an accurate descriptor of what's going on,
Christopher Mitchell (30:59):
And nor [00:31:00] are the new dynamics at all internally consistent. And I recognize it more on the right, but I see it on the left too. So for BEAD expectations, I'm curious. I don't think in 12 months we're going to see a significant amount of anything changing. At that point. The money will likely be in most of the state's coffers and on their way to ISPs, we might have a few networks that have received some dollars and are starting to get in the ground. [00:31:30] Louisiana is very impressive at how dedicated the governor and the staff are to having something they can brag about before people cast ballots in November. So as best I can tell, that seems to be the strategy and it's working well.
Blair Levin (31:43):
Louisiana is funny because you're going to have a new governor, but I think the prior governor and the head of the broadband office have done a fantastic job, and they're really among the leading states in articulating both what they want to accomplish and also how to accomplish [00:32:00] it. And I think it's a real tribute to them because it's not easy. Look, my expectations are not dissimilar, which is a lot of checks will be written in the year 2024. A lot of groundbreakings in 2025. At the end of the day, you're going to look at the glass that's about 90% full. That is to say somewhere between 97 and 99% of the country in terms of locations, homes, and businesses, we'll have access to a robust broadband network. [00:32:30] And 99% of those cases, it'll be fiber. Well, that's an accomplishment. It's a great accomplishment. We're going to waste bunch of money in doing that.
And you can focus on the waste of money or you can focus on the accomplishment I've spent most of my life in the private sector. By the way, the private sector wastes a lot of money too, but there's lots of different reasons for that. But my point is I think BEAD is, it's on its way. There's definitely criticisms you could have of it, I could have of it, but at the end of the day, it's going [00:33:00] to kind of get done. And then the question is, what left do we have to do if we have not solved the affordability divide? And that's what the ACP is all about. We are way, way behind the eight ball. In fact, in the year 2024, the United States of America is likely to take the biggest step backwards ever in terms of closing the digital divide in terms of increasing it, which is astonishing.
But you and I have already talked about that. But there are other divides. There's a training divide, [00:33:30] there's institutional divides. There's rural companies that still will need operating support. One issue that I think is getting no attention, but in the last part of the decade, we'll start to get a lot of attention is what we might think of as the fiber copper divide. That is to say, when you look at markets that have cable versus fiber, the consumer experience will be much better than those communities where you have cable versus copper. And [00:34:00] I don't know whether the number's 20 million homes, 40 million homes, whatever. But it's not small and it's not huge, but it's not small. Well, what do we do about that? And I mentioned that because no one's really focused on that today, but I think in years to come, mayors are going to be focused on that.
Doug Dawson was writing about not just a big city problem, it's a small town problem as well, because fiber can cherry pick where they're going to build. But I would [00:34:30] say what Memphis recently did is very interesting by lowering certain barriers to entry, they've enticed people to build out fiber. I think only 24% of the city right now has fiber. The whole city has cable. But by getting a new entrant in there, that's a really interesting model. We'll see if it works. We'll see if it's applicable to others, but that's another problem down the road that when you invite me back in 2027 or 2028, we [00:35:00] can talk about that.
Christopher Mitchell (35:02):
Well, one of the things I wonder is, and I'm curious if you want to take a bet, we'll revisit at that point when you said different communities, I actually think it's different neighborhoods and even sub neighborhood areas because of what you mentioned in terms of that cherry picking issue, which we'll see with certain providers we see in other providers for-profit and nonprofit, both avoid cherry picking. They go to serve everyone. So hats off to those providers. [00:35:30] But I'm curious whether you think, and let's call it 2027, by then, will we have an FCC that will have collected data that will allow us to actually know where this is happening, which is to say accurate location data and pricing data?
Blair Levin (35:46):
My guess is I'll take the under on that, which is to say, I think the answer is probably going to be no. If the Republicans win, the answer is almost certainly going to be no, they're not big into data collection. If the Democrats win, [00:36:00] it's a more complicated story. I think the desire is there. We did this when we were doing the national broadband plan and we saw some of the difficult politics of it. You really have to be top because the industry does not want to give you the data. Part of that is for good reasons, that data has a lot of competitive value, and they do not want it to be shared in various ways. It's also very dynamic data because they're constantly looking at it and changing it
Christopher Mitchell (36:23):
Just among the biggest providers to be clear.
Blair Levin (36:26):
Christopher Mitchell (36:26):
Right, right. Small providers almost never change their prices. They just [00:36:30] Right.
Blair Levin (36:31):
But in any event, what I would say is based on the experience of the Democrats today, I think the odds are that's not one that they choose to die on that hill.
Christopher Mitchell (36:44):
And then one other prediction that I think I'll have made publicly before this comes out, but I still love to get your opinion. I don't think there's a way in which in 2024, we actually see the FCC do anything on the new digital discrimination rule [00:37:00] because it has to be on actions that have been undertaken since the rule was adopted. And that will take a while before one could claim that you have evidence of new digital discrimination. And then that would have to work its way through the system, which I don't think many at the FCC have an incentive to do. And to the extent that they do, it probably won't be public. And so I would expect that we don't see anything resulting from that docket in the calendar year.
Blair Levin (37:25):
I think that's right. I would make a similar prediction. In fact, I haven't [00:37:30] published it yet, but I've written from Wall Street a similar prediction to you. I guess this is the category of great minds think alike. And I think there's an important point here, which is if you were going to do something, you would do it in the first year, you would say, it's great that Congress passed this law requiring us to set the standards, but because of these standards, we now see here's the harm. But one of the interesting things in the decision was they never pointed to anything that was said. Here's a harm we're trying to address. And so what that tells, [00:38:00] and there are some other procedural things that are very subtle, but it tells me that they don't see what the problem is. And we will see, I don't think that will happen, nor by the way, we're going to have a Title II decision, probably April, may or something like that. But there too, it'll take a while for it to go into effect, but I don't think any kind of enforcement action comes out of that.
Christopher Mitchell (38:25):
Well, let's follow up for a second as we wrap up, but the last thing and we'll talk about is this. [00:38:30] Does the FCC see that there's a problem? I mean, to some extent, I feel like you and I have somewhat different takes on some areas, but we're both people who I think are pro-market with our eyes open. And I think if we look at the FCC, the FCC says, Congress said we're going to have a competitive system, and what do you want us to do? A competitive system means everyone is able to act in their rational self-interests. There are higher costs and lower revenue opportunities in some neighborhoods. And so the market is not feeding them. We cannot [00:39:00] fix that. And the point that I always make is I don't want the FCC to fix that. I don't think that the FCC forcing at and t to invest more in Cleveland actually advances anyone's interest. And so this isn't a problem for the F ccc, I think. And so maybe the FCC is right to just keep saying, don't look to us to solve this.
Blair Levin (39:19):
Well, the FCC is not saying that.
Christopher Mitchell (39:21):
Blair Levin (39:23):
But the impact of what the FCC is saying is the same. In other words, you are a hundred percent right that no one should think that the FCC [00:39:30] as currently constituted or as likely to be constituted thinks that that is a problem that they're going to solve. And in a way, as I look at the law, I kind of agree with them. Having said that, one of the things that I told the staff at the National Broadband Plan is, what we really want to do is solve all the problems that, but for our efforts would exist five to 10 years from now. We're going to solve 'em ahead of time. And that's what led to things like the broadcast incentive auction, [00:40:00] FirstNet. It actually led to Google Fiber in an interesting way, shouldn't go into, and I wish the FCC would articulate what you and I have discussed here, which is the copper fiber divide is a problem.
But what we need now is for local governments to be looking at it like Memphis, I would've loved for a bunch of FCC commissioners to praise Memphis because giving that attention to Memphis and what they're doing might've inspired other mayors. And you've [00:40:30] pulled together people and look, there's a lot of different ways of doing these things. Getting back to again, the A ccp, which I think is the biggest issue, one of the things that's just been striking to me is other than FCC saying, oh, we really wish you kind of would maybe possibly fund this. Again, you have not seen the FCC as an effective lobbying tool, and there's limits to how they can lobby. But giving Congress the information that would cause them to say, [00:41:00] oh, by God, we really need to fund this. The FCC has not been effective advocates for that, and it's the most important thing they could do, and they're not doing it.
Christopher Mitchell (41:09):
As we really do wrap up, a comment that I think you said toward the end of our last one was a sense that the FCC is increasingly led by people I think, who are a little bit more political in nature than used to be the case. They have a little less expertise in the industry and in the technology, and that's one of the things I think [00:41:30] we've seen from the appointments. Not to take away from the capability of anyone who's on the commission necessarily, but it does seem to me like that is the trend and it is not serving an expert agency. Well, I don't think
Blair Levin (41:44):
So. I agree with that. But what I would tell you is one of the interesting things to me is if you ask the question, which of the Biden appointees has really been of consequence, and I would point to two. One [00:42:00] is Gina Raimondo at Secretary of Commerce, and the other is Lena Khan. Partly I do that because their name's rhyme, which I find to be amusing. The other reason is that they in very different ways and are seen as kind of being at the ideological ends of what the Biden spectrum would be. They have both been very consequential. Jean has gotten, she got the chips money and she got the BEADs money, and she did the natural spectrum plan, and she's doing all, she's doing a bunch of AI stuff [00:42:30] and all that. She really works it well. And Lena, on the other hand, not just the antitrust litigation, but covenants on to compete and all kinds of other things, I happen to have had dealings with both of them. And what I would tell you is they're both fundamentally fearless. They're both fundamentally mission driven. They are focused on doing big things, and I just don't see people at the F CCC taking a look back and saying, at this moment in time, what's the big thing? I mean, to me, the big [00:43:00] thing is just getting everybody on broadband, but I don't see them focused on it.
Christopher Mitchell (43:06):
No. I see them focusing in talking about how they're doing it, but not actually doing it, which it seems to be perhaps summing up a whole generation of action, not a generation of people, but just the milieu, I believe is the word. So Blair, as always, wonderful to spend time talking with you. Thank you for your time and all the work that you do,
Blair Levin (43:29):
And I look forward to [00:43:30] your next trip to dc.
Christopher Mitchell (43:31):
Ry Marcattilio (43:32):
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