Follow the Money: Comcast, Starlink, and the BEAD Backslide - Episode 664 of the Community Broadband Bits Podcast

Christopher Mitchell (00:12)
Welcome to another episode of the Community Broadband Bits podcasts Chris is traveling a lot edition also Jordan the producer editor and Another talented voice recently on the show. We got four weeks straight of travel So we didn't have a show last week probably not gonna have a show next week and the week after that I don't know but in the meantime, there's a few hot topics and I

We'd like to talk about them with Karl Bode who is a regular writer for us on communitynetworks.org. Welcome back to the show, Karl.

Karl (00:44)
Hey there, thank you for having me.

Christopher Mitchell (00:47)
And then we've also got Sean Gonsolves, who is here at the Institute for Local Self-Reliance, the Associate Director for Communications here on the Community Broadband Networks team. Welcome back, Sean.

Sean Gonsalves (00:57)
Good to be back. I'm as ready as ever to travel now that I've been finally cleared for the TSA Pre-Check.

Christopher Mitchell (01:03)
Yeah, you got that and then you also got your voice back after a big fight. ⁓ Tell us how you feel about viruses, Sean.

Sean Gonsalves (01:09)
viruses and well and also bacterial infections. Right, right. And it was the infection and the bacterial part of it that really threw me for a loop there. Sinus infections are no joke. Let's just say that. And I didn't, this being the first time that I think I've ever had one maybe, at least been diagnosed with it. Now I have a whole new respect for the power of sinus infections and what they can do if you don't, you know, go see a doctor and take care of it.

Christopher Mitchell (01:11)
You got viruses and bacteria. I was gonna say you got them both.

Yeah, I think he's sort of...

Yeah, I think you start off with a virus, right? And then you got this infection that came brewing after the end of it. Okay, we're gonna talk about bulk billing in California. We're gonna talk about the Comcast and T-Mobile, but really kind of Comcast jumping in to try to purchase some support from the Trump administration in DC. And we have an idea about some public records requests and trying to figure out how to do something. We're gonna talk through that a little bit toward the end of the show.

Sean Gonsalves (01:38)
Yep, yep.

Christopher Mitchell (02:01)
But let's start with bulk billing in California. Karl, you wrote this story for us. There's a new bill, I believe signed into law now in California. What does it do?

Karl (02:11)
⁓ It basically requires well to for a little background

your broadband provider and your landlord have always struck kind of sneaky monopolistic deals where you are locked into one provider, even if that's at unreasonable rates. And for years, government has tried to do something about it and failed. The federal government has tried to pass restrictions and failed. They're full of loopholes. California finally stepped in and said that you cannot have an exclusive bulk billing arrangement between a landlord and a...

and a provider. The bill basically makes it so that you can opt out of these bulk billing arrangements without penalty from your landlord. And if your landlord is intractable and tries to zing you anyway on these bulk billing agreements, you can take it out of your...

lease. basically enters an opt-in option. It doesn't ban bulk billing arrangements.

which is where, you know, a landlord in an ISP strike an arrangement to exclusively lock down the community into one provider. Sometimes these bulk billing arrangements are good for good reasons. They're in communities where it's very expensive to deploy broadband access. And it's a way to recoup your investment in that community. Monopolies often sometimes use that and exploit it to lock people down and prevent local competition. So this California bill doesn't ban that practice, but it does make it so you can opt out of those arrangements.

And if your landlord gives you crap about it, you have a little bit of legal recourse to fight them in terms of paying your bill on time.

Christopher Mitchell (03:39)
Now, both San Francisco and Oakland were trailblazers in terms of establishing a ⁓ proactive right of tenants to presumably have choices, requires building owners to open up their facilities. Did any of that get discussed at all in this discussion, you know?

Karl (03:54)
They kept it very limited to the opting out arrangement. They didn't get deep into anything else because they knew that that kind of lobbying opposition they'd see if they had any kind of meaningful bill that would really ban this practice would have been too severe. And I think they saw if we can get just some groundwork where we can get people opted out, that's going to be something.

And like you've said oftentimes, and both of you said this in your own pieces, some of these bulk billing arrangements have use, so you don't want to put a blanket ban on them, because sometimes, you know, a municipality will strike a bulk billing arrangement with a community to recoup their steep investment in a community nobody else wanted to serve with access. So it's not like they're always terrible. But that industry, that whole segment has been terrible for years with all sorts of predatory behaviors between landlords and broadband providers.

Sean Gonsalves (04:32)
Right. Right.

Yeah, where I think the rubber will hit the road with that, I mean, think this what California has done with this new law is a step in the right direction where I think the rubber might hit the road is by opting out. I wonder if that means, okay, so we'll charge you whatever 75 less on your rent. But guess what? There's still no other like provider that whose wires are in this building. So you're, you know, you better hope your hotspot works pretty good or something because otherwise you're not going to have Internet access. So that that and then also

the enforcement mechanism. It's not clear to me that if you're in a building where they sort of just ignore this law, like what's the recourse? it like the attorney general? It seems like that might be an uphill climb to sort of get anyone to notice and then take action if you're some random tenant in a building ⁓ in a community and you raise this as an issue. It's like, who do you tell?

Karl (05:33)
Yeah, and these are states that are really dealing with all kinds of financial headaches and legal challenges under the second Trump term in the first place. You know, like the right to repair reforms, I don't know if you've seen those, where they pass laws to make it easier to repair your own stuff. Like those are great, and I'm glad we have laws on the books, but a state that's battling with, you know, healthcare fights, immigration fights...

Christopher Mitchell (05:34)
I gotta think that.

Karl (05:53)
you know, basic existential crises isn't going to step in and meaningfully enforce these smaller new laws. That's just not likely to happen. So in real world, I'm not sure how useful it will be, but we'll have to see.

Sean Gonsalves (06:03)
Mm-hmm.

Christopher Mitchell (06:05)
I think it does start to move the needle though, Sean. I mean, think it's hard to imagine a piece of legislation that will fix everything. And while I spend most of my life trying to figure out how government can make things better, I don't feel like if we just got the words right, we'd fix it.

Sean Gonsalves (06:17)
Right, right, right, exactly, yeah.

Christopher Mitchell (06:19)
You know,

like, it's going to be messy. We live in a world with a lot of other people. There's 39 million people in California. And like, you know, there's a lot of different situations. like Karl said, I do feel like if you told me, hey, we've got this large public housing facility. How are we going to make sure everyone has a decent connectivity? would, and this is something I've worked on in some places is to be like, well, let's do a bulk billing. You know, let's make sure that like we have at a reasonable cost. Everyone has a high quality connection in their unit and there's a free Wi-Fi

in common spaces and the owner of the building pays for that with one pay, one invoice a month to the ISP that's providing it or they provide it themselves. And that's great. But at the same time, there might be another situation where that's not working out and that's not the best way to go forward. But I got to think that the thing that this does is this makes the value of having exclusive arrangement go down, right? Even if people have another choice.

Sean Gonsalves (06:58)
That's right.

Right.

Yes.

That's right.

Christopher Mitchell (07:14)
It just

starts to push us in the right direction. So I'm glad to see it.

Karl (07:18)
And it awareness about the problem as well, know, all the press coverage. Sorry, Sean.

Sean Gonsalves (07:18)
Me too.

Yeah, for sure.

And then there's also the element of transparency because I think probably in many instances where there's this bulk billing arrangement, like the prices of that Internet connectivity is like built into the rent. like, I would imagine there's a lot of people who don't know that one of the line items in their rent might be to cover, you know, Internet connectivity.

Christopher Mitchell (07:43)
Yeah. All right. Let's move on. One of the interesting conversations we've had on Connect This! over the past six months or so is with Doug Dawson, who tracks industry trends a little bit closer, much closer than I do and the people that are often on the show. He'd talked before about how in the current merger and acquisitions environment where we see so many big companies gobbling up each other or gobbling up small companies because

⁓ Lina Khan who was the chair of the Federal Trade Commission had made it very clear under the previous four years under Biden that we are going to be very skeptical. were pro competitive at that point and they were going to try to stop mergers. Well, when Trump came in, there was a sense among some, maybe he will be also pro competitive, but he has not been, he has been like very pro merger. However, not so much for Comcast. Comcast in part because it hosts MSNBC, as one of its many investments, and also

I think because it's not an AT&T sycophant company like, I'm not a sycophant company for Republican party like AT&T is, then I think Comcast has always given a lot of money to Democrats. so like, they're not really in Trump's good graces. And we were wondering how they were going to do any mergers while everyone else is having fun, you know, removing competition from the market. And the answer might be what, Karl? I'm to go to Karl again here. What is Comcast doing to

restore its ability to get its mergers, sir.

Karl (09:08)
Comcast is one of several companies that have decided to throw millions of dollars at Trump's shiny new ballroom that nobody asked for. At the same time that federal employees are currently sitting in long lines waiting to get food from food banks, Comcast has decided that one of its best interests is in throwing millions of dollars at the Trump administration to fund a ballroom that he claims he's paying for, but...

isn't paying for because Comcast, Apple, Meta, AT&T, and a number of other companies have decided they can get on Trump's good graces by throwing money at his new project. Much like they did during his first term when they went to his hotels and made sure to spend time at his hotels to get on his good graces.

Christopher Mitchell (09:40)
I think, I think we still have it.

I think he said it was going to be not publicly paid for. And so that is true. And I do want to say, is Comcast's right decision. If you're in the doghouse and you're in a situation in which the ruler of the country will take money in terms of then being transactional, which is Trump is of nothing if not transactional, then Comcast is making the right call here. It's just us that are sort of losing out.

Karl (10:13)
Yeah.

Yeah.

Sean Gonsalves (10:13)
Well, and by not publicly paid for, meaning that what, that Comcast or AT&T or Google is just, the amount that they're putting in, they're reducing what, the CEO salary? This isn't revenue generated from the public?

Christopher Mitchell (10:29)
It's money from those companies. So it's not taxpayer dollars that are going into it. I felt like that was sort of the gist of Trump's comments. And I'm not saying that that makes it okay. I mean, I'll say that watching, wondering how much stuff was in that building as it was torn down still, and the trees around it, I think it's atrocious. I have to say that like...

Sean Gonsalves (10:36)
me.

Karl (10:50)
There's also security standards

for doing that sort of work, you know, like all those open photographs of a sensitive government building just broadcast on the Internet. You know, when you do that kind of stuff, there's a lot of paperwork for very good reasons to make that restrictive so that foreign countries can't study your infrastructure and infiltrate the contractors working on the builds and install, you know, surveillance materials. And is there any indication that an administration that doesn't think government has any point is actually doing those things? I would be surprised.

Christopher Mitchell (11:20)
Yeah, no, think, I mean, to be clear of what we're talking about, feel like...

Comcast is making the right decision, but it should be deeply disturbing to people that companies who are trying to figure out how to get their way are not going through like the time tested approach historically of lobbying, which we already had enough problems with. They have tons of access. Now it's just writing checks, whether that is for sponsoring a ballroom or whether that is a secret crypto transfer or any number of other things that are going on. You mentioned the hotels before, Karl, but like when you see the kind of

Sean Gonsalves (11:36)
Right.

Yeah.

Christopher Mitchell (11:53)
of corruption that appears to be happening. When you look at the way we are spending, probably going to be spending what, ⁓ $10 billion on SpaceX for them to provide something they already provide. Like there's clearly more than meets the eye ⁓ as to like what is going on behind the scenes. And so here's Comcast and I am curious to see when they get their first merger through.

Karl (12:13)
It's interesting for Comcast because they've been a real focus of the president's ire for the past couple of years. You had that fake FCC investigation to whether Comcast was ⁓ being suitably doodable in terms of removing DEI materials from their website. There was that whole fake investigation. The president got really mad when the NBC News networks did some accurate reporting on some of their immigration reforms. He's called them Comcast numerous times. So it's interesting to see them immediately bow and do it anyway. But you understand why they're

doing this. mean the second Trump term has basically taken a hatchet to the entirety of FCC consumer protection.

Sean Gonsalves (12:43)
Right. Right.

Karl (12:49)
And when you really think about what the value is to a company like Comcast to have the federal government give up on consumer protection and monopoly enforcement, that's a lot of money. whatever, know, a few millions they threw at this White House renovation is a pittance compared to what they're actually getting in terms of tax breaks, subsidies, the defanging of the federal regulatory state, the elimination of FCC consumer protection oversight. That's quite a windfall, even though there's some of this performative bickering on the surface that I think gets all the attention this company is

making out pretty good under Trump 2.0.

Sean Gonsalves (13:22)
Although it's not clear to me that sort of paying this pay to play game and getting you know in the Trump administration's good graces by making some donation is somehow lasting or will truly matter, you know, so it you know it It just always like I have not seen where like what you know it okay So you do this and now what Comcast is like? Suddenly like the Trump administration loves Comcast and whatever they want to do. They're gonna be able to do I mean these things change on a dime, you know ⁓

Karl (13:49)
Right. Yeah, the

erratic whims of this administration is something they have to deal with now. know, one day you can be under their fire for absolutely no coherent reason whatsoever. And that's part of the deal when you do partnerships with these kind of autocratic administrations is they are not reliable partners. And businesses like predictable reliability and you're not going to get that with this guy. Yeah.

Sean Gonsalves (14:09)
Mm-hmm.

Christopher Mitchell (14:10)
They say they do.

And perhaps a topic to go deeper in in the future. Sean, there's an idea that I had thrown out there to you. In part, when Jordan dug into Texas, which we talked about on Connect This! last week, we talked about how Texas has gone in its remarkable transition. And people might want to dig in. It's probably like 10 minutes, 15 minutes into the show. It's toward the top of the Connect This! show.

Sean Gonsalves (14:19)
We

Mm-hmm.

Mm-hmm.

Christopher Mitchell (14:37)
We talked about how several years ago when BEAD was starting, Texas said we got 1.1 million locations that we want to connect and we've got $3.3 billion. And then if you fast forward to recently, they're like, we're connecting 260,000 locations and we're only going to spend like $1.1 billion or something like that.

Sean Gonsalves (14:57)
Instead of three

billion, right.

Christopher Mitchell (14:59)
So

we went over some of that and I was just thinking, it'd be really useful to know what changes we've seen this year because of the new administration. And so I asked you if we could kind of create a little toolkit for people. So what are you doing?

Sean Gonsalves (15:12)
Right.

So the toolkit really is to essentially encourage and help advocates in certain states try to see if they can pry some public information loose out of the state broadband offices around. That's right.

Christopher Mitchell (15:26)
But being respectful, these offices are overworked and being disrespected.

And so I do want to put the proviso. We don't want to target them, but they are unfortunately the only place that has the information that we kind of need.

Sean Gonsalves (15:34)
right.

Exactly.

And they are between a real rock and a hard place. I mean, most of the state broadband offices, if not all of them, wanted the the BEAD spending rules to remain as is and where they were able to spend as much on fiber deployment as they as they had planned to. And in many cases, you know, within the budget, within the allocation that had already been designed for these states, then this benefit of the bargain stuff comes out and is basically an effort to

You know, they call it technology neutral, but essentially it's a cover for shoveling a lot more of this money to SpaceX and Project Kuiper and the Amazon service that is yet to launch, I think. And so one of the things that we'd like to do, we know that it's happening in terms of the reduction of the percentage of projects that we're gonna go to fiber that are now gonna be going to satellite, but we wanted to have a better, we wanted to able to better quantify how much

disinvestment is happening in rural communities as a result of these, hey, let's just give the money to Starlink for something that you already could get, but you're not, there's a reason why you're not, and not invested in generational ⁓ fiber infrastructure. And the issue though is that, there's a few issues. One is that it's not exactly easy to get this information, even though it should be.

public information and there's only, I think, a handful of states that have, prior to these rules, had notified ISPs of pre-qualification for awards or that they were going to be awarded money and then now that's being rescinded. So like, for example, in Louisiana,

There is a project where Conexon that does wonderful work connecting a lot of rural communities working with electric cooperatives is working in East Carroll Parish. They had already gotten some grant money to build out into the most rural parts of East Carroll Parish, but the sort of the most densely populated part of East Carroll Parish, I think it's the Lake Providence area in East Carroll Parish, they had applied to get a $2 million BEAD grant, which they were notified that they were gonna get, then this benefit of the bargain round comes out and lo and behold,

that that that that award is now gone away instead there if they're being told well instead of two million to finish out this fiber project we're going to give a couple hundred thousand offer folks to sign up for Starlink

Christopher Mitchell (17:58)
Yeah, but not to them. We're going to write a check to Elon Musk rather than to folks in New Orleans. ⁓

Sean Gonsalves (18:00)
Right, right, but not to them, right. Exactly, exactly. So we're trying to get a sense of, to

be able to sort of quantify and see how that's playing out in various states.

Christopher Mitchell (18:13)
Right, exactly. so where letters have been sent, it's a very easy public records request where one would not be significantly tying up the resources of the state to fulfill that. In other cases, it might be more difficult to get the records to better understand how the awards ⁓ have shifted after the so-called benefit of the bargain round.

Sean Gonsalves (18:35)
That's right. That's right. And so, you know, I think it's a useful exercise because this could be a way to really have Congress sort of say, wait a minute, this money is being used in ways that Congress did not intend for it to be used when we passed the infrastructure law. Now, I know that's a quaint idea that laws that were duly passed by Congress should be adhered to, but...

in the broadband space, and at least that kind of information, I think, puts people in a position to at least bring this to their representatives and such to really hold them to account and say, look, you voted for this infrastructure law. How come you're not upset or demanding that the money that was allocated for BEAD is spent in the way that you designed it to be spent? I think there are actually a couple of...

folks in congress maybe who's a senator in Virginia who who might be kind of hot to try on some of these issues maybe not all of them but who's the senator in Virginia's it no is it you know

Christopher Mitchell (19:32)
corner. ⁓

West Virginia is showing more capital. Yeah.

Sean Gonsalves (19:36)
West Virginia.

Yeah, who at least has shown.

Christopher Mitchell (19:40)
She's spoken out against the Trump administration on this,

Sean Gonsalves (19:42)
on some

of these issues. ⁓ so anyhow, you know, cause we're getting down to where it's sort of, you know, kind of a, hail Mary in terms of trying to steer as much or at least get people to be aware that some of the communities that most support this administration are really going to get hung out to dry when, when, when, when this is all said and done with the BEAD investments.

Christopher Mitchell (20:05)
College of any thoughts on this?

Karl (20:07)
A lot of them aren't going to know what they were missing out on, you know, because I think a lot of people didn't understand what this bill was doing in the first place. They didn't understand how BEAD works. It's pretty complicated. And, you know, most of the media coverage over the last year has been what a cumbersome slow mess the program has been. So when people suddenly get expensive Starlink service, they're going to probably not think twice about it. They're not going to understand that basically we threw billions of dollars at a billionaire for service he had already deployed, you know, for absolutely no reason, which took money away from a lot of other better opportunities.

Sean Gonsalves (20:21)
Alright.

Karl (20:36)
alternatives.

Sean Gonsalves (20:37)
to say nothing about how much more expensive Starlink is compared to, for example, when an electric cooperative or some small independent ISP is offering, say, fiber service in a rural area. Not that it's cheap, but what we've seen at least is that it's usually less expensive than 120 bucks a month, plus the fees that you have to pay to, yeah. Okay, exactly.

Christopher Mitchell (20:56)
Usually, yeah, like 95 % of the time, yeah.

Karl (20:59)
And it's

less congested. The fiber networks are going to be much higher capacity, whereas Starlink, as you throw millions of suddenly subsidized people into the mix, is going to start to face more capacity and congestion issues, which is going to result in all sorts of weird restrictions you wouldn't have seen on community fiber networks.

Sean Gonsalves (21:15)
That's right.

Christopher Mitchell (21:16)
At the same time, want to quote one other person. I don't want to ruin it for people. I encourage you to watch the Connect This segment. But Heather Mills made the point very well stated. was, what was the IIJA, Shawn? Do remember what the IIJA stands for?

Sean Gonsalves (21:29)
right.

Right. then I actually because being, you know, part of that, that that discussion, I remember her emphasizing the JA part of it, which is the jobs act part of it. Right. The infrastructure investment and jobs act.

Christopher Mitchell (21:36)
Yeah. Ja man.

So I wait for it.

Right. So the point of that being that, you know, this is a $20 billion. Because of these changes, we're going to see $20 billion worth of fewer jobs in North America, in these rural communities across the 50 states and the territories. ⁓

Sean Gonsalves (22:02)
Right, because it's not like

all of the folks that were going to be working on the construction to build these networks are suddenly going to become like rocket engineers hired by SpaceX to deploy extra capacity for SpaceX. there's a job in economic development aspect of this investment that is being entirely overlooked under the guise of saving taxpayer dollars. Because instead of spending $42 billion as Congress had stipulated for BEAD, maybe we're only to spend $20 billion and call it

you know, call it a victory.

Christopher Mitchell (22:32)
Right, now some of that money will be well spent, but some of that money will be well spent, but other amounts of that money, you know, like the, I don't know, between five and 10 billion that are gonna go to Musk, it's like, what is that doing?

Karl (22:32)
Exactly the sort of thing you want transparency on.

Christopher Mitchell (22:45)
I can't tell you really. mean, there's this whole thing about reserving capacity is what they say. I don't know. I think you could make an intellectual argument. But it's like I think Lincoln said about alcohol, which is that there are many defenders, but no defense. You can always find someone who's like, you know, going to say something, especially if you write them a check. But but this is not a wise investment for the taxpayers. Starlink is a service and investors have committed tens of billions of dollars to make space

Sean Gonsalves (23:10)
What?

Christopher Mitchell (23:15)
sex work well, we don't need to put a bunch of money into it to provide a service to people that most of them have decided they do not want, right? It is available. They are familiar with it. They have decided not to subscribe to it. And we're going to write Elon a check on their behalf that they get no benefit from in order to further do what? It's really frustrating. It's corruption. I mean, that's the thing. We're dancing around it, but like, let's just be very clear. This is corruption.

Sean Gonsalves (23:34)
Yeah. Yeah,

that's right. That's right. And also we should just say just as one small caveat, though, if in case anybody's listening to this that hasn't heard you Chris say this 1000 times already in us in many other ways, we're certainly not making the case that somehow SpaceX or satellite ⁓ Internet is somehow not useful in any way. Or that even within the confines of BEAD, it was always sort of supposed to be part of the plan that there were going to be some

Karl (23:38)
next

Sean Gonsalves (24:04)
super expensive locations where it made sense for to be a Starlink. So we're not trying to make the argument that Starlink sucks so bad that it shouldn't be part of the equation at all. It's just this kind of wholesale benefit of the bargain, let's do as much towards Starlink as possible, is not going to be cutting the mustard.

Karl (24:24)
Yeah, the smart play was always fiber to as many places as possible. Cellular 5G and 6G further from that. And then satellite broadband comes in as a niche option for people completely out of range of other options. Because it is great if you have a cabin in the middle of nowhere. It's a great service, but it's not affordable. It's congested. You don't want to make it your top choice and throw in prioritizing it in funding is going to be a big mistake that we're going to be unwinding over years.

Sean Gonsalves (24:48)
Mm-hmm.

Christopher Mitchell (24:49)
Yeah. All right. Well, that's the show. Probably not going to be a show next week, but Karl and Sean very much appreciate your time. And for people who are missing out, go back in the archives. There's a bunch of good stuff back there. There's also other folks that are doing good shows. can check out The Divide from Light Reading or a number of other shows that are out there. I would like to have more content, but I've been trying to do this thing called work-life balance.

It's still out of balance and I still, you know, there's still so much stuff that has to get done. So I'm sorry. We will have shows coming out again in the middle of November, I think, but we might miss a week or two here in in-between time as Jordan and I are off gallivanting around, working with local folks, getting more stories we want to share with you.

Sean Gonsalves (25:35)
That's right. There are over 600 previous episodes to dive into should folks be inclined.

Christopher Mitchell (25:45)
Yeah, and I just learned that there is, I didn't know this before, because I don't pay close attention, but Control Alt Speech. Mike Masnick, who was on the show recently, he does the Tector practice, but there's also Control Alt Speech, which he's been doing, and I was just tuning into A Tale of Two Internets. So there's other shows out there, and I want you to come back. But we'll head into a little bit of a desert here for a little bit. Thank you, Karl.

Sean Gonsalves (25:55)
yeah, that's right.

Come back please, yes.

Karl (26:13)
Thank You

Christopher Mitchell (26:14)
Thank you, Sean. I appreciate you coming on the big smile on your face after I was poking at you in our meeting just an hour ago. thank you all for listening.