When Starlink Rewrites the Rules of Broadband Funding - Episode 675 of the Community Broadband Bits Podcast

Christopher Mitchell (00:12)
Welcome to another episode of the Community Broadband Bits Podcast. I'm Christopher Mitchell at the Institute for Local Self-Reliance. I'm in St. Paul, Minnesota, which I to say, I've never been more proud to be from, and I've always been pretty proud if you listen to me. So also I've been told to look at the camera more. It feels super natural. So I'm going to do it from time to time. We're here today. I'm excited to have Doug Adams on the show, who is the head of Broadband Marketers.

Doug Adams (00:28)
Yeah

Christopher Mitchell (00:39)
He is a rider for Broadband.io and he has been doing tremendous work trying to figure out what's actually happening with NTIA and BEAD and then writing about that in a way that people can be informed on. Thank you, Doug.

Doug Adams (00:50)
Absolutely, thanks for having me.

Christopher Mitchell (00:51)
And then we also have Karl Bode who is a guest who comes in from time to time. He is the rider for Community Networks as well as Techdirt He's a general freelance reporter. He's been doing this for a whole heck of a long time. Thanks for coming back again, Karl.

Karl (01:05)
Thank you for having me.

Christopher Mitchell (01:06)
so we are going to start by talking about Starlink and then we're going to, think, talk about a couple of other things a little, less expansively, but we want to spend most of the time, think getting a sense of what's happening because, I'll talk about this at the end as I've done a couple of times, just what's been going on with me, but I have, had my attention diverted. Fortunately, other people at, ⁓ on our Community Broadband Networks team are picking up the Slack, but I've not been able.

to follow the BEAD News super closely with everything that is happening in Minnesota. But I do gather that Starlink has agreed with all of us that have long said it doesn't fit the BEAD program and they've decided that they wanna see a bunch of changes. So Doug, let me ask you how you wanna structure this. If you just wanna start off with what you think is a key point and then Karl and I can banter around with you about it.

Doug Adams (01:43)
you

Well, I think the key point when you look at the rider and you look at the accompanying letter that went with it, the key point to me, the takeaway is they don't like the NOFO. That they don't think that this applies to them. they, yeah, I think it's as simple as that. The asks that they have are pretty astounding, if you ask me.

And we'll see what happens because I have not gotten a quote from either Starlink nor NTIA. No lack of trying, but we'll see what comes of this.

Christopher Mitchell (02:20)
Let's step back for a second to make sure everyone's tracking this. So if I'm getting this correctly, basically, Starlink sent out communication to all the state offices, basically. Now, they've done that before and we've talked about this, where they've kind of sent out something and they've said, this is top secret, you can't share it with anyone. then, right, they put confidential on top. And most of the states tend to respect that, but sometimes it comes out.

Doug Adams (02:23)
Mm-hmm.

Right, they put confidential on the top.

Christopher Mitchell (02:44)
and we get a sense of what they're saying. Sometimes it feels like they're coordinated with NTIA on this. This feels to me like they might not be. What were the facts? Like how did this start and what happened?

Doug Adams (02:53)
So the facts of the matter is for those of people who don't obsessively have no life, was the fact that Starlink has won, I believe, most locations throughout the nation. Let's remember that Starlink also said that all of BEAD should be going to us after the June 6th guidance because we can serve everyone.

Christopher Mitchell (02:57)
Obsessively read broadband.io.

Doug Adams (03:14)
And honestly, they say that that was the fact prior to the BEADs. So why they need funding is another story altogether. They have put both the rider and an accompanying letter together that really says a lot. It says a lot. It's saying.

When it comes to testing, want you to let us pick the sample size. You can't randomly select homes. They're saying we acknowledge that there's going to be trees in people's yards and it will make the service, yeah, is reliable. Thank you for the help with the words. Even though we had prior said that these were no issues.

Christopher Mitchell (03:48)
as reliable or fast.

Doug Adams (03:55)
As someone who used to have DirecTV, I'll tell you, it can be an issue. Thank you, YouTube TV Anyway, they're saying that somebody should be covered, even if they were covered prior to BEAD, even if they take up the service for a month and say, yeah, I don't like this. ⁓

Karl (04:00)
hehe

Christopher Mitchell (04:12)
Okay,

basically like they're trying to set out terms and conditions for what constitutes success that are different from what was specified in the NOFO.

Doug Adams (04:15)
They're flying in the correct.

Correct. And lastly, and I think what we saw in letter and what you see in the, there's so much in this rider that it can be overwhelming. But one of the things that they asked for is 50 % of their allotted money upfront.

They want half upfront as soon as they self-certify that they can deliver service to different states, BSL. And not only do they want half upfront, they do not have to build capacity until the demand is such that they need to build capacity. So the states are paying for half without any assurances of take rates. ⁓

Christopher Mitchell (04:57)
So

let's break this down a little bit. ⁓ First of all, Karl, is it your impression that there are other ISPs that also would like to change the federal rules to suit them better and just do that and declare it?

Doug Adams (05:00)
Yeah.

Karl (05:08)
No, of course. Yeah,

there's a 25 year history of the biggest telecom monopolies basically writing state law, know, pretending a ghost writing state law and then pretending that this is in the best interest of the public. So yeah, this is nothing new. The wrinkle here is that Starlink had already hijacked this program to kind of marginalize fiber and better and cheaper deployments. And now they're basically, I think the rider didn't also say that they can't be held accountable for sloppy and bungled installations.

Doug Adams (05:35)
Correct, because their standard installation is to just put it in the mail and send it to somebody and say, good luck with this.

Karl (05:40)
Yeah.

So this is historically they want their cake and they want to eat it too, right? They want the billions of taxpayer dollars, but they want zero real accountability or oversight. you know, Musk has already played a key role with DOGE and, you know, lobotomizing the federal regulatory state. So these agencies, who's going to hold him accountable when he doesn't deliver what he promises on the taxpayer dime. So right there last obstacle now is the States. So they're to start targeting like, is the NTIA going to come in and actually hold them accountable? Should they miss targets?

Do we think that, you know, the Ted Cruz former staffer that now runs NTIA is going to have the courage to stand up to Musk? You know, I would be skeptical about that.

Doug Adams (06:18)
I how you slipped that in there. go back to Chris, one of the things that you said real quick, I got this rider, now I've developed a relationship with the state offices for the past several years, I get this rider from no less than five.

Karl (06:20)
lol

Doug Adams (06:36)
states who are going through the process right now. The letter was a separate thing that was sent to all the states. The rider was sent to those states who were starting to disperse the money. So there you go.

Christopher Mitchell (06:47)
So I do want to say, Karl, I do think there's a difference. Like there's like corruption and, you know, the founders of the United States of America were keenly concerned. Like, I mean, it might've been the biggest issue they were worried about was the corruption of decision-making, right? Because they felt that King George had been unfair, King George III. And they were deeply concerned that a President of the United States would be corrupted by foreign practices or by various interests within the country. And I think we've come to live with more corruption than our founders wanted in the modern era.

At the same time, that's like, that's the game, right? Is that like you pay money to lobbyists, you set the rules, and then you argue about the rules in court. Sending out these riders to me, it seems like something that's very different. I mean, like these rules for these programs are supposed to be set and then they're supposed to be rigid and the courts follow up on that. And I feel like this is different. I really feel like this is really changing the rules at a time in which we had previously agreed we would fight about the rules earlier and then stick with them.

Karl (07:36)
It's

Musk is a new form corruption. He's a new age corruption, right? Traditionally, this system was dominated by the entrenched monopolies like AT&T's lobbying people who are super effective, especially on the state level. They effectively own the state legislatures in countless states. We have probably like five, six states that kind of buck their interests sometimes, sporadically. Musk is a new thing because...

Christopher Mitchell (08:02)
Mm-hmm. Right, and it changes. We've seen progress

since the pandemic where California has not been captive anymore. Wisconsin is no longer controlled by AT&T. There's change, but historically that's the way it was.

Karl (08:10)
Yeah, right. Yeah,

and you see them, but like, you know, the CPUC you see in California just actually, you know, past merger conditions for the Verizon merger with Frontier that actually are fairly decent because there's some activists now there that have done some work. But by and large, you know, most states could not care less about consumer protection and they've been corrupted for years. Musk is a whole new animal because he's built this reputation as a magic man. I mean, I think a lot of people think

Starlink is akin to some sort of magic. I think you sprinkle it around and everybody has access and it's great. You you don't see a lot of, you see some, but you don't see a lot of coverage about how Starlink lacks the capacity to scale. It's got a lot of environmental impact issues, both on the ozone layer and you know, the problems with the satellites degrading in orbit. There's a lot of problems here. And so not only did, must come in and completely hijack this program to redirect a lot of funding away from not just traditional monopolies, but community

broadband access, but now he's telling states that they basically, and the federal government, they cannot hold him accountable for pretty much anything. So the rider's to me, is just an extension of what he was already doing on the federal level, right? So it's more of the same in many ways.

Christopher Mitchell (09:20)
So what Doug? What

Doug Adams (09:20)
You know, there

Christopher Mitchell (09:21)
Doug?

Doug Adams (09:22)
are a couple instances, without me completely understanding it, they're basically saying, we don't want accountability. Some of these compliance landmarks and road milestones that you're holding other carriers to, that doesn't apply to us. They're just basically, yeah.

Karl (09:36)
Yeah.

Christopher Mitchell (09:36)
Which is fair. Like

to some extent, like, mean, I think it is correct to say if you allow Starlink to participate in this, they cannot be held accountable in the same way that others could. Because if you give money to the public utility district in Kitsap in Washington and they build out a fiber network and then they screw the dog and it doesn't perform, the federal government can seize the assets, right? This is all part of the program.

Doug Adams (09:44)
Mm-hmm.

Christopher Mitchell (10:03)
The federal government can't seize a satellite for like a minute and a half that it's transiting overhead, right? To like, recover the federal interest that, you know, that goes into it, right? Like, and, and, and so like, is like, we'll say that like accountability has to work different, which is why we've said Starlink doesn't fit, like for so many different reasons. But now they're determined to, to jimmy it in. The question is, how do you make them fit? And I feel like they're basically saying,

Well, we want to fit in this totally unaccountable way. And, and I guess that my question is, what happens next in terms of, of, some level of accountability? mean, this, thing about them getting money upfront just drives me crazy because it just reminds me of, of Bruce Kushnick who if you've ever been on an email list for more than five minutes in the telecom space, you've seen him talking about.

the games that the incumbent local exchange providers played in Pennsylvania, in New York, in New Jersey, and so many other states where in the 90s, they said, if you allow us to raise the rates of every last grandma in this state and charge them twice as much, then we will make sure that everyone has super high quality broadband in a few years. And we will sign these documents that will guarantee it, but we need the money now to make the investments later.

Doug Adams (11:14)
I'm gonna be...

Karl (11:14)
fiber.

Christopher Mitchell (11:20)
And it is much later now. And as Bruce has documented, none of those investments have come. And so like, it's just a Hamburglar problem, right? That's what we're dealing with.

Karl (11:24)
Yeah, whipsadaisy.

But now we're gonna really fix it with Starlink right? We're gonna permanently fix it and we're gonna do it super cheap because it costs less to deploy Starlink so it's gonna be easy.

Christopher Mitchell (11:31)
Great!

Yeah. And

I mean, it drives me nuts because like, if this was a situation where we were like, where I would say that like we felt that Starlink was able to scale better and was run by someone who was responsible and hadn't spent the last 10 years lying to us about everything all the time. Right. I mean, just the sheer number of bald faced lies this man has said, and then we're going to take him at his word now. Like it's just, it's, it is aggravating.

Karl (11:49)
Yeah, yeah, that's the

Yeah. And

we're going to flood a capacity constrained system with a whole bunch of new users when there's already indications that it can't scale to meet capacity. Like an ideal federal program, yeah.

Christopher Mitchell (12:08)
And I think it will. mean, I call you

and I disagree on this. think I actually think technically they will be able to scale more. Um, but I still think it's not a good federal investment for most of these homes. Like for 10 % of these homes, it's probably the best thing, but for 90 % of them, we could have done better. think so anyway, but I cut you off.

Karl (12:19)
No, I-

Any competent

plan should have pushed fiber as deeply into neighborhoods as possible. Then you take 5G and fixed wireless, you pepper that. And then Starlink was supposed to be, you know, like a useful niche option that fills in the gaps in a lot of remote areas. Instead, they've taken Starlink and prioritized it and now given him carte blanche to basically tell states that like, you're going to give me money and you have no recourse or accountability to do anything if I don't deliver. At the same time, he's lobotomized the federal regulatory state. I mean, we're going to be writing about the

impacted us for a decade, I suspect. And I think Starlink isn't useless. It works well, but it's not the other key problems. It's not affordable to a lot of people that need connectivity the most. So I guess this rider and this agreement is basically getting rid of the hardware upfront costs, which is nice, but they're still going to be charging people 80 to 120 or whatever it raises to in the future for service that's going to be capacity constrained. And they're going to start implementing stupid restrictions.

Christopher Mitchell (13:15)
no, Karl.

Karl (13:20)
know, inevitably throttling 4K video or whatever, whatever, you know, the history of satellite is filled with these companies being really restrictive.

Christopher Mitchell (13:24)
No, I mean, this is what drives me crazy. I haven't tracked

all of the news closely, but what I have seen is I get these news periodically and it's like, Starlink gets rid of the $10 plan. Starlink has a $40 plan. Now Starlink doesn't have a $40 plan. Now they have a $50 plan. Now they don't have a $50 plan. it's just.

Karl (13:37)
Now there's a $750 congestion fee, you know, that sometimes is

$500 and sometimes it's $400 and there's no regulators left that are going to hold anybody accountable for anything.

Christopher Mitchell (13:47)
I mean, this is not

Doug Adams (13:47)
And how do I pay

Christopher Mitchell (13:48)
what people want.

Doug Adams (13:48)
for how much is unlimited data as I get into AI and 4K video, et cetera, et Yeah.

Karl (13:52)
Yeah, yeah, exactly

Christopher Mitchell (13:54)
Yes,

Karl (13:55)
right. And we got rid of net neutrality rules. you know, yeah, sorry, go ahead.

Christopher Mitchell (13:55)
yes. So Doug, let's talk.

Sorry,

hope the mic's not carrying through. My dog is barking at the fact that someone else exists in our neighborhood.

Doug Adams (14:04)
Well, someone walking

has the nerve to walk by the front of the house. I'm familiar with that.

Christopher Mitchell (14:07)
Yes.

Karl (14:07)
You

Christopher Mitchell (14:09)
So now I didn't pay this close attention to it, but Doug, you may have in the course of reporting about now how they wanna be accounted for regarding the number of users that they have, because there are people that are in the, there are locations, I'll say locations, the broadband serviceable locations, the BSLs that everyone talks about, right? Some of those today are Starlink customers. And most of those, theoretically all of them,

today could take service from Starlink before Starlink has signed a contract with the state. And if a different provider got that contract from the from the this program from the BEAD program and built out, they would get money when they had finished the build out right and then actually connected people and ⁓ achieve that.

Doug Adams (14:55)
Right, right.

Christopher Mitchell (14:56)
That's not what Starlink wants to be measured by. And it's harder because Starlink was available already and some of these people already taking service. It seems like they want a triple count wherever they can.

Doug Adams (15:06)
Well, let's go back to another fact, because a couple of states have told me when they were forced to go through this bottom round was that, I don't know what we're paying for. don't know. So they're paying for capacity. OK, great. I understand that. I think we more satellites to go up in the air and serve everyone. But they're also paying for the hardware that in many states they're giving away as a free marketing promotion.

Christopher Mitchell (15:20)
Mm-hmm.

Doug Adams (15:31)
So Starlink wants to be counted? Yeah, Starlink is. So Starlink wants... Let's say, Chris, you said, I'm going to try this Starlink. It's not going to cost me any money. Let's give this a shot. And if you have it for a month and you hate it, then you're served. They count you as served. They count as, check, we delivered Chris' service, even though you cancel it after 30 days.

Christopher Mitchell (15:32)
Starlink is giving away.

Doug Adams (15:54)
They also want, let's say Chris, you've had satellites since 2021, 2022, you're an early adopter. Well, Chris has satellites, so he's one of the people that we serve through BEAD. Well, what? Yes, yes. And in many states, I ask them, I say, are you paying for actually reaching,

Christopher Mitchell (16:07)
So the federal government is writing them a check to continue doing what they had already financed with private funds.

Doug Adams (16:19)
actually service or are you paying just for the capacity? Most of them say that they have an NDA and they can't talk about it. This would suggest that they're getting paid regardless. And you know, when we've seen these programs, there was one specific program in Maine that said, 9,000 RB locations, they're just not going to be fiber or wireless capable.

They said so today it was the summer of last year. They said you can get on on LEO right now you can get on space Starlink get SpaceX and Starlink confused you could be on Starlink tomorrow No cost to you other than the monthly charge The people who took that were less than 10 % Maybe even less than 5 % I don't know how that's evolved so

They know that this is a difficult driving uptake and one of the reasons that I've been so... I've been a thousand times more bullish on Amazon than almost everyone else because at least they know how to market. At least they have a desire to drive for the LEO. Okay, they have zero infrastructure. I get that. But yeah.

Christopher Mitchell (17:25)
Hyper. Or LEO, they call him LEO yeah.

Karl (17:27)
Yeah.

⁓

Christopher Mitchell (17:32)
And they have less spectrum. Yeah.

Doug Adams (17:34)
Yeah, so maybe it's a fool's errand and they're never going be able to do it. But what I will say is ⁓ they can sell, they can drive uptake, they can get people to try it. Whereas Tesla has never needed to spend a dime on marketing. And that's where we come from with SpaceX.

Christopher Mitchell (17:41)
They can sell.

Karl (17:54)
And Tesla

companies are notoriously bad for having like zero customer service. People who would like put down their down payments for the thing and then write in and ask them, okay, I didn't get service. Do I get my money back? And they would just, there'd be no answer for a year and a half. Whereas Amazon not only has cloud infrastructure, but Amazon does at least know how to do functional customer service. I don't know if it'll translate, but.

Doug Adams (18:00)
That too.

Christopher Mitchell (18:10)
I mean, I think...

Doug Adams (18:15)
Correct.

Christopher Mitchell (18:15)
I mean, I imagine that

fanboys of Musk would be saying, well, actually they're great at marketing because look at the demand that they built for Tesla without running an ad. Doug, feel like as a marketing person, you might distinguish between someone who's really good at marketing the first 10 % of a population versus being able to market 80 % of the population.

Doug Adams (18:36)
Yeah, mean, there's, you know, Jeffery Moore back in the fricking 90s was, had the ⁓ technology adoption curve. And he said that no matter what, there's about 10 % of people who are early adopters. They want the new and shiny thing. They just have to have it. Be it ego or wanting to keep up with, or being ahead of the curve or keeping up with technology. There's about 10 % of people who will buy no matter what.

The question is how do you get a majority of folks?

Christopher Mitchell (19:04)
Yeah, now the question I guess I have is I think with SpaceX, want to get 50 % of the money upfront and then they would need to hit a certain number of users to unlock more of the funds. And that's what we're talking about here in terms of what counts as a user, right?

Doug Adams (19:20)
Yes, yes. But a user is a loose term, but yes, that's how they would recoup the rest of the 50%.

Christopher Mitchell (19:28)
Karl, I'm just so frustrated.

Karl (19:33)
Yeah, yeah, I know the feeling. Yeah, these were

systems that didn't work well in the first place. Counting available serve users, making sure consumer protection exists, making sure stuff's affordable. Like these systems were already pretty broken in the United States and now they're much, much more broken. You know, our federal regulators are non-existent effectively.

Christopher Mitchell (19:47)
One minute.

And I'll say that like, I want to go to you in part, because like DSL reports, I think being grounded in what real people think, you know, is helpful. And the people that you've built such trust among are like the people that actually use stuff and buy stuff. And my impression is, is that for 30 years, people have wanted the Internet to be more like a utility in the sense of being reliable, affordable, predictable, not

You know, they don't want it to be more, entrepreneurial where like the deals change, you know, like the electric system for many States changed from being like this predictable thing to being like every month you get a mail and it's like, get two months and then you get, and then you get this and then, and then the rate goes up for, for only five minutes. then like, nobody wants that. Right. That's, but that's the direction that I feel like Starlink is pulling us.

Karl (20:29)
Yeah. No.

Christopher Mitchell (20:34)
And that's also the direction that to some extent the cable companies have laid the groundwork for with these ever-changing offers.

Karl (20:40)
Yeah, the shifting landscape where your promotional price is constantly changing and they're constantly trying to bundle you into other services. And a lot of people do just want a simple, affordable connection that works. But there was always, if you remember in the DSL reports era, there was a every six months, there'd be a fight over whether broadband was a luxury or a utility. And the broadband providers would get all agitated and they'd say, it's, know, it's clearly a luxury because they didn't want it regulated like a functional utility where there's somebody actually making sure you're getting what you pay for. And, know, we've spent 25, you and I, all of us,

have spent two decades plus just trying to get some kind of basic framework in place to make sure people are getting what they actually pay for. And in my career, I've watched it just consistently get worse, where the federal government does a worse and worse job, gets lobbied into useless, feckless corruption. And now we've hit this point where we had this historic influx of billions and billions of dollars that really could have been truly transformative. I know a lot of that money would have still gone to Comcast and AT&T and it still will.

there

was real potential there to drive it to a lot of really affordable, interesting, local, fiber, municipal options that actually care about just offering people a cheap, easy, fast, reliable connection. So it's gonna be, I'm just, mostly frustrated because I know I'm gonna be writing about this for the next decade when people finally who are on this network are like, oh, why, why at Thursday at four does my $170 a month capped?

Doug Adams (21:54)
You

Karl (22:00)
shitty Starlink connection not connect me to the Internet and i can just see the path we're headed in it's frustrating because i know i know what i'm gonna have to listen to

Christopher Mitchell (22:07)
Well, this

is one other thing I wanted to hit on, is that like, Doug, I'm curious, do you want to react to this a little bit as someone who like understands public opinion, thinks a lot about marketing and public opinion type things is that one of the best parts of BEAD and this slowed it down, I admit, was that there was supposed to be public engagement. There was town halls, there was public comment required multiple periods for different aspects of this because in the past,

the federal government would say, who doesn't have Internet access? And they would throw darts at a dartboard. And then they would like pick different companies and never consult anyone on the ground as to what technologies they wanted, what their priorities were or anything like that. The BEAD program changed that. The BEAD program said, you're an American citizen, you're here and you have a voice. And we want to know for the next several years, decades, what service do you want? What are the things that you're interested in? And nobody, but nobody said, please, please Starlink Like it's just,

And so like one of the things that's been totally lost here is that people got a chance to express their preferences and Doug my impression was that this really happened

Doug Adams (23:13)
This really happened. SBOs went out and to all over the state, state broadband offices, not to get hyperbolic, but I've heard stories where community members would come up to the, after the state broadband and they would, and they would, you know, thank and hug the,

Christopher Mitchell (23:16)
state broadband officials.

Doug Adams (23:29)
directors and the members of the office to say, oh, I can't believe this is actually finally happening. You're finally going to bring fiber to us. And they're like, yeah, this is real. This is real. Because so many times they've been promised a better connection and they've been screwed for lack of a better, a more graceful way of saying it. So I think that a lot of the state directors

I don't know if anger is the right word. Dissatisfaction with the changes is that they went out and they promised that this was different. And it's not different. It's actually maybe even worse.

Christopher Mitchell (24:00)
The state broadband officers themselves were basically told like, you're going to be a part of a historic transformative program for rural America for generations and you're going to put in 80 hour weeks and you're not going to get paid anywhere near what you should for it. And it's going to be a giant hassle, but you're going to help transform rural America, know? Yeah. And now they, now they have to think about the fact that they were put over a barrel and forced to abandon the promises that they had made in good faith to people.

Doug Adams (24:02)
themselves.

Correct.

Right, this is going to be your legacy of sorts. ⁓

Karl (24:19)
Mm-hmm.

And they're

going to be blamed for the rug pull when the rug is inevitably pulled out and people realize that the connections aren't quite what was promised, they're going to be directly blamed. So yeah, yeah, that's frustrating. What I would like to remind people is like last election season, there was the big complaint about how this bungling bureaucratic program was taking so long, right? know, Ezra Klein had a whole segment on Jon Stewart's podcast where BEAD was taking so long. And now I don't see a lot of those same people, you know.

Christopher Mitchell (24:46)
Mm-hmm.

Karl (24:54)
concern that not only are we introducing new entirely new massive delays for states, we've redirected billions of dollars to an unreliable white supremacist, you know, if I may be so bold, which is hugely problematic and I don't

Christopher Mitchell (25:06)
No, those are accidental sig-hiles.

I don't know what you're talking about.

Karl (25:08)
right right whoopsie

daisy but i don't see those same abundance people that were really very concerned about broadband policy for a very brief window there in the fall there i don't see them now i don't hear them talking about any of this so i find that frustrating and i got frustrated too because ARPA really did deliver a lot of the stuff that was promised

Christopher Mitchell (25:24)
Yeah, the American Rescue Plan Act.

Karl (25:25)
know, every

week I talk to a different municipality who really did deploy, you know, next generation affordable fiber to people who've never seen that in their life. And that doesn't get discussed much at all by those same people. I get, there's multiple layers of frustration I have around. ⁓

Christopher Mitchell (25:39)
I want to come back to that in a second.

Doug, is there anything else on SpaceX that we should cover regarding this? Do you have a sense of what you think happens next? And was NTIA blindsided by this, do you think, or do you think that they were a part of it? So I'm just going to keep asking you questions while you can answer them.

Doug Adams (25:51)
They're not part of it. They're not

part of it. They've told states not to sign this. But my question becomes, okay, then what? Does Starlink, who is well known for caving and cooperative deals, are they going to say, okay, we'll back off on the rider? Or are they gonna walk away?

and then what happens if they walk away? ⁓ How many delays? And already we're dealing with...

Karl (26:16)
How many delays does that introduce?

Christopher Mitchell (26:19)
Well, interesting thing is

this is an area where we actually have the winning hand as the public because from the perspective of someone who's living in a rural area, it doesn't matter whether or not the federal government gives SpaceX money. The service is available.

Doug Adams (26:32)
No,

And they haven't had any market penetration. None. None is hyperbolic, but that's what I do in marketing.

Christopher Mitchell (26:41)
I mean, there's millions of people who like the service and that's great. Yeah. Yeah. mean, I don't, Elon has done, I mean, the, the, the Tesla car, it's truly like remarkable and like, you know, the Falcon nine truly remarkable, like Elon and his engineers and mostly as engineers, think, but like, to some extent, his vision has achieved things, but he's also lied about tons of stuff along the way. And so you really got to take him by what he does and not what he says he will do. So I just want to get that out there. Cause I feel like people always assume that I'm super anti-Elon and can't see any good in him.

Doug Adams (26:44)
There are, it's great, great.

Christopher Mitchell (27:10)
Like he's done some pretty impressive things and I'm willing to admit that it's just a matter of I want to see the thing not assuming it's going to happen based on the fact that he's lied so much about what's coming next.

Doug Adams (27:19)
Well then my question for satellite also is we didn't even know what AI was three or four years ago other than a great plot for Terminator.

You know, we need more and more bandwidth and capacity. Does Starlink, are they able to increase their capacity? Are we building?

We're not really building anything, but we're sending up satellites and we're investing in this. Are we investing in a platform that just isn't going to be able to support tomorrow's needs? One of my little irritations is you hear about technologies that say, well, this is all you ever need. Most homes only need a hundred meg blah, blah, blah, blah, blah. Well, that's great for today. But if we're investing in building something, it better work tomorrow and in five years and in 10 years.

I don't think we should be investing in something that works for today.

Christopher Mitchell (28:05)
Well, and I will also say there's another difference with Starlink compared to other terrestrial based technologies, which is that I don't think we're likely to be at war with China, North Korea, Russia, you know, but I've also read enough history to know like before World War One, they were patting themselves on the back on how the world was more interconnected than ever and the new technologies reduced the reduced all this and they weren't going to have major wars again. The idea that like 10

Doug Adams (28:27)
Right.

Christopher Mitchell (28:29)
20 million people could lose Internet access. One of the first things that happens is the satellites are going down in the next war, we assume, of a global war of that kind. You can't allow your enemies to have that kind of tool. you know, this is just one of those things that like there's a number of things. And then there's solar storms that we talked about that on a previous show. There's all kinds of things that present an unacceptable risk, I would think, when we, it would be better to have 3 million people dependent on that than 12 million people dependent on.

Karl (28:56)
And technology aside, the founder is foundationally not a stable person. I mean, that has to be, you have to consider that the founder of this company is not stable. His empire is starting to look a little shaky around the edges in terms of, you know, the dodgy finances. And ⁓ yeah, there's a big question there about whether this service is going to be there for the long, long haul.

Doug Adams (28:56)
This is a pretty good.

Christopher Mitchell (29:00)
Right.

I mean, I would say that like, I've said this before, whether it's through, I think there's different routes to get there. I think it's possible that Starlink is nationalized in the next three or four years.

Doug Adams (29:23)
Meaning.

Christopher Mitchell (29:24)
Well, you can imagine if this, if, if the finances fall apart on the way Elon Musk runs his businesses, the federal government, if it's sitting there looking at this thing, going into bankruptcy, you know, there's, this is a national strategic asset. Super important. And, and so there's different routes of, getting there and not only that, but also let me just point out that like, from like 1945 until today, the federal government had taken stakes in private companies.

Very rarely in an extreme circumstances and now we have stakes in like 15 different companies. And so like, you know,

Doug Adams (29:49)
Right, right.

Karl (29:54)
Yeah, it

was treated as radical socialism, but yeah, we could suddenly, yeah.

Doug Adams (29:58)
I mean you've got a lot of ideas. you thought of screenplays and going to Hollywood and pitching these ideas? know, I know that post-apocalyptic movies are quite popular.

Karl (30:02)
Ha ha ha.

Christopher Mitchell (30:03)
I have, but yeah.

I like to think my creativity is limited by the occupation I'm dealing with and not my inability to be disciplined and write things down. So

I want to, I want to come back to something. Doug, ⁓ do you have another couple of minutes and do you want to talk about municipal broadband? You got to go. Okay. I just, I want to check in on municipal broadband because of, you know, Karl, you just mentioned talking with the rescue plan. ⁓ and so Karl, I want you to tell us what's going on in New York state. You wrote about that recently for us on CommunityNetworks.org.

Doug Adams (30:19)
Sure, no I don't have to go, but I'd be happy to jump in.

Christopher Mitchell (30:33)
And then Doug, I'm not sure if you're still keeping up with the Ohio networks, but I'd love to, if you have any thoughts on what's happening there lately or want to give us just the top line benefit, but we'll start with Karl.

Karl (30:33)
yeah.

Well, New York State, but back to the American Rescue Plan Act, New York State took a big chunk of that money and actually dedicated it to Minnesota broadband. And so you've seen a lot of towns like I think Dryden, New York, where close to where I grew up, have gone out and deployed really affordable, know, $60 a month gigabit symmetrical fiber. And so New York State is. Yes, right.

Christopher Mitchell (30:58)
often in partnership with private companies. I don't think in that case necessarily, but in many

of these cases.

Karl (31:02)
Sometimes, yeah,

yeah, there's many, there's many different approaches, public private partnerships, they can take go on their own, you know, you get coalitions of different municipalities, point bonding together, but New York State has, I've historically not always been a fan of their policymaking on broadband, but I think in this instance, they did set aside a really large chunk of ARPA funding that's really going and making some meaningful change. And I don't think it gets covered enough in the press. I don't know why the press finds this sort of thing boring for some reason.

especially with all the abundance, not to come back to that, but all the abundance rhetoric, we want government to actually work for the people, right? There was the whole fall thing about how we really, and then ARPA comes along and deploys community housing and arts centers and gigabit broadband to rural communities and nobody pays attention to it in the press. It was barely covered. So New York state is, just recently, I think she doled out another $30 million.

Christopher Mitchell (31:33)
Right.

So what's the latest?

Governor Hochul

Karl (31:51)
Yeah, Governor Hochul just came out with another 30 million that they're going to funnel to a lot of these pilot. They started with some pilot projects that were promising, and I think Dryden was, you know, inspirational for a lot of them. And I think I don't know how many projects are going to be funded by this 30 million. And I think last I saw is going to be chunks of like eight to ten million dollars. So probably only a handful, but it's still significantly more than we're seeing in a lot of states. And I've been really impressed because a lot of these municipalities are focusing on the important thing, which to me is affordability to

communities that have long been neglected, especially the marginalized populations in places that are historically overlooked by private monopolies who are just there to largely extract profits as quickly and efficiently as possible.

Christopher Mitchell (32:32)
Right. And Doug, you've done a lot of work with Fairlawn. were rapid response when there was an effort by Charter Spectrum two years ago now, maybe three years ago, a lifetime ago. Yeah. When, there was an effort to try to make it illegal in Ohio to do this sort of thing. But what's the latest for some of those networks?

Doug Adams (32:40)
to, ⁓ gosh, I don't know, a lifetime ago.

Brilliant.

Now there hasn't been any chicanery in that sense, but really when you look at both the state that I have customers in and the state that I live in, which is Colorado, you see two states that followed the Bob rules and ended up with only around a half of fiber and a lot of satellite. What I would say is, yes, yes, and we're less

Christopher Mitchell (33:09)
You've seen they followed the benefit of the bargain rules.

Doug Adams (33:13)
aggressive in, let me see Colorado's numbers, they were less aggressive than some states, but they were following the rules.

Yeah, Colorado I think was ended up in less than half of fiber. And when you're looking at wireless and you're looking at satellite, I don't mean to drag wireless into this, you're looking at technologies that may meet today's but may not meet tomorrow's needs. I think it's yet to be seen what happens with the savings of $20 billion. I've seen Senator Wicker wants to use it towards...

You know, for whatever reason, he doesn't want to use the term middle mile, but a more robust infrastructure throughout the state. So if there's a more robust middle mile infrastructure, are more and more communities who got satellite, what I might call the digital divide of tomorrow, the satellite, the LEO recipients, are they going to step up and start saying, okay, it's time to do, you know, everybody has tried, you know, tried.

it's time for us to take matters into our own hands. So I would predict that you're going to see a lot of communities, if not the rest of the decade, then early next saying ⁓ nobody's going to help us, it's time for us to do it on our own.

Karl (34:19)
Do either of you think we're ever going to see this amount of subsidies again in the next 30 years, this volume of BEAD subsidies?

Christopher Mitchell (34:25)
When you say this volume, 42 and a half billion, I don't think so. But per capita, I think we may like in terms of like, because there's fewer households. mean, some of the BEAD dollars will be spent wisely. A lot of the rescue plan dollars will allow for networks that are built that then locally rooted providers will then edge out from there and figure out how to expand slowly. States, I think will, will, you know, have line extension programs that will help. But I can imagine that if there's a significant economic downturn,

Karl (34:28)
Well, that scale,

Christopher Mitchell (34:51)
as part of a program to boost sort of the anti-cyclical spending that government does to prevent the depression from forming during a recession, I would expect to see some money for like the Digital Equity Act reinvigorated, but also some more infrastructure funds to allow for building out. But it won't be that, I mean, it'll be costlier per premise because we missed this opportunity, we squandered it, but.

⁓ It will still be less in total because so many locations will have ultimately been served.

Doug Adams (35:22)
Well, mean, sooner or later, and maybe I'm naive, don't we at some point in time have to get to the point where fiber is needed at every location? Just period. ⁓ If that's in 10 years or 50 years, sooner or later, the government, if not private, private sector is going to have to invest in every single home, just like we have electricity in the boondocks.

Christopher Mitchell (35:34)
I think so.

Doug Adams (35:45)
everyone is going to need.

Christopher Mitchell (35:47)
I would say like 99, 99.5%. I don't know exactly how it breaks down. Like the point at which, yeah.

Doug Adams (35:49)
I mean, there's there's some

people who said who tell me in their states they're like, well, people come come here to get away and disconnect. Okay, that's fine. If you know, and some people just want to get away. They don't want anything to do with it. I would say fully served in the United States is probably 98%. And I would say that it should be fiber.

Karl (36:09)
Verizon told me in 1997 that that job was completed. when I used to ask them for quotes, know, back in Pennsylvania, I think through untold billions of them in exchange for what was supposed to be, you know, symmetrical fiber everywhere, they would say, yep, we did it. Mission accomplished. Yeah, we look at our super reliable broadband map. It's very obvious.

Christopher Mitchell (36:09)
Yeah, no, I think that's roughly right.

Doug Adams (36:24)
Well just look at the map.

Christopher Mitchell (36:25)
Right.

I mean,

you know, I will, I will say this. If the way that we would have a higher amount of money, more than $42 and a half billion in real dollars, whatever that is, would be if the federal government decided we need to have competition, you know, and that's where it would come from is like, is get rid of this nonsense about like, well, like, sorry, like some, some company that we're not going to audit has claimed that they serve you. So you're not on the map.

But if there was a true reckoning and a true effort to build competitive networks with like open access principles or whatever it was going to be, I could imagine that being an investment that would be worthwhile over 20 or 30 years. I mean, you could spend $50 billion. And if you then result in competition that provides price discipline and benefits, you will absolutely like the stock market. Like I hope you're not owning Comcast, you know, but like

Karl (37:05)
problem.

Christopher Mitchell (37:17)
You bring real competition out there. The American taxpayer and the American economy will benefit by more than that amount over the long term, I think. Now that's a question of like from a public policy point of view, but like whether or not you're going to convince people that's a good use of taxpayer dollars, I don't know. Doug?

Doug Adams (37:32)
Well, I would say invite me back to your utility versus technology podcast because we could go into this. You just 30 minutes ago said that we've been fighting to see that that the broadband is a utility. One thing that I would say is that consumers see it as a technology. They might buy 100 megs. They might buy two megs, two gigs. That's how consumers are. And meanwhile, all we do is just a race to the bottom with speed and price.

Speed up, price down. I would say that it's, what I'm trying to say is that a utility, the government does not pay for competition to make sure that there's multiple utilities within an area. ⁓ And what you're asking is for there to be private competition within areas for the Internet. I don't see that happening.

Christopher Mitchell (37:56)
I mean, I'm confused by what you're saying, Doug.

Yes, it does not. It has not.

Doug Adams (38:18)
And if you wanted to say that broadband is utility, why should it happen? Other than to, you can't have it both ways is what I'm trying to say.

Christopher Mitchell (38:26)
No, no, no, I understand

your point and it is a very good one. And I think that this would actually be a really good future show. ⁓ Yeah. But briefly, what I guess I would say is that like, if it's going to be a utility monopoly model, like we've done with electricity, the question is who guarantees it does a good job and doesn't return to this era of, of slow.

Doug Adams (38:32)
That's what I'm saying, invite me back to that one.

Christopher Mitchell (38:47)
innovation, right? AT&T runs Bell Labs and Bell Labs is magnificent, right? It creates so much of the technology we rely on today. There's a lot of benefits for having a regulated monopoly system. At the same time, we couldn't have a football or princess phone or hush a phone, right? They were so protective of their monopoly and they had such control over it and they capture all the regulators. And so there are those problems with it. And so, you know, I will say that like, if the federal government continues to set policy as though it should be competitive,

I think we need government investment in order to make sure there's truly competitive options out there. What people want is a low price and a stable service, you know, ultimately, and we associate that with utility. And I don't know that because we've run natural gas utility, electric utility, water utilities that way, that we have to do that for this technology. I guess I continue to...

to argue with myself about what is the best way and what is the realistic way.

Doug Adams (39:43)
Ha ha ha.

Right.

Pragmatic and idealistic Chris are arguing with each other.

Karl (39:50)
My

problem with this theoretically is that, I know that private industry hates the idea of being regulated, but to have a functional market, you need competent regulators. And there have been, and we're discussing this like we're still in 2010 and we still have an FCC that works and we still have an NTIA that isn't staffed by weird zealots. Right.

Christopher Mitchell (40:07)
which we complain about all the time, the FCC, when it

worked, right?

Karl (40:10)
But the series of Supreme Court rulings that have basically made it impossible for regulators to hold companies accountable for anything, as we just saw when they tried to hold AT&T and accountable for, know, hoovering up user location data and spying on their own users and selling that data to data brokers. You know, the Fifth Circuit just said, no, we're not gonna.

FCC doesn't have the authority. We've seen that repeatedly over and over again on everything related to telecom. The scale is slowly moving to the point where we don't really have functional federal regulatory oversight of these companies anymore. We like to pretend that I think the business interest in telecom trade magazines like to pretend that we do, but we do not. We don't have a federal government that cares about affordability right now. We don't have a federal government that has regulators in place that care about consumer interests at all.

Christopher Mitchell (40:54)
Right.

That's not an anti-Trump statement. Two years ago under Biden, two years ago under Biden, we would have said the exact same thing. And we did, in fact.

Karl (40:56)
I don't mean that critically or even, yeah. ⁓

The Jessica ⁓ Rosenworcel for the Biden FCC, she was kind of a performative regulator. She would do things that sounded good, but she couldn't openly acknowledge that monopoly power was constraining markets and like had destroying consumer protections. You know, they weren't honest about this stuff. And we're at a point where we really don't have.

functional federal oversight and I think any any effort to kind of guide the market towards you know a lot of open access fiber markets that are kind of functionally regulated to ensure there's some competitive that stuff's not going to happen without some dramatic

policy reform and I just don't where we are right now where we're being operated as like a cacistocracy by a lot of corruption. It seems very far away for me to start talking about, okay, how do we build, you know, a nationalized even nationalizing Starlink or, you know, ⁓ breaking up local monopolies or having an antitrust renaissance of any kind. I just feel so far away to me right now.

Doug Adams (41:53)
And of course, how Elon can help with the whole regulation and everything like that. ⁓

Karl (41:58)
Right, right, right.

I mean, I've spent 25 years trying to argue for a little competent adult regulation and Elon Musk comes in with DOGE and destroys half of the federal government under the pretense of innovation efficiencies. So I'm frustrated personally.

Christopher Mitchell (42:00)
Yeah, I mean, I-

Doug Adams (42:02)
I'm

Christopher Mitchell (42:13)
So yeah, I mean, let me

say like I live in Minnesota. was, if I could have a sound effect, it'd be like, Chris says 10,000 times, like I live in Minnesota. And like, have significant fraud here. If you watch Fox news, you're well aware of that. And we don't know the scale of it. I think it's been overstated in terms of 18 billion to me seems like unimaginable. If that's the case, then good Lord, people really were asleep at the switch. When I talk to people I know, having gone to public policy school in Minnesota, I know a fair amount of people.

You know, one of the things they tell me is that, I'm going to tell you that like I do, I am concerned that like some white guy middle-aged like me sitting there and being told like you're racist for going after, you know, a person of Somali descent for fraud. Like, I don't think it would stop me, but I can imagine it may slow down some other people who are concerned about that and under certain periods. But honestly, the thing that I hear from people is that we don't have, we haven't invested in people to actually do the investigations and to check in on this sort of thing.

And so we've, we've cut government to the point at which we have programs that we cannot cut because they're essential for people's lives. But then we cut the oversight. We don't have the right amount. And I'm one who always believes in inspector generals. I don't always think they get it right. I think auditors are sometimes embarrassingly naive about the things that they're auditing. They just don't even know what they're talking about. But like these things are necessary in order to like have checks and balances. So like,

When we talk about this from the government point of view, it isn't just us complaining about it. It has impacts all across government when we cut things back in this way. And it's not just matter of cutting back, but we just have government designed not to work. And that's kind of where we are right now, unfortunately.

Karl (43:46)
Yeah, and people, if they really want to be concerned about fraud, I can tell them many tales of telecom chicanery over the years from AT&T, getting billions upon billions of dollars for networks that were always half delivered across every state. I don't see a lot of people freaking out about that on Fox News or anywhere else. So if we really want to talk about fraud, come talk to me and I can provide ample documentation to prove that corporate America is at the heart of most of it.

Christopher Mitchell (43:58)
There's even right now.

Yeah, there's someone that stole like

Doug Adams (44:03)
You

Christopher Mitchell (44:12)
Please? Yeah, like, I mean, like, there are so many places that would point that audit gun, you know, to like save real money.

Karl (44:18)
Like Bruce, you brought

up Bruce Kushnick. The poor guy has been out there like pointing out how Verizon has been ripping off state taxpayers for literally 35 years. And he gets downplayed. So yeah, it's frustrating.

Christopher Mitchell (44:29)
Yeah. Doug, last thought.

Doug Adams (44:31)
Last thought is...

I don't know that people who are cynically saying that this is RDOF version 2 are wrong. want to know, I want to see, I really want to see where the 20 billion dollars goes and what that's going to fund. The NTIA right now puts out a sheet for every final proposal that is...

approved and they'll say, and there's two bars. One is Biden's number and one is Trump's number with Bob and the savings. They're calling it savings. They're calling monies that were legally allocated to states as savings.

Now the Wicker bill and some other things have said, we need to do something productive with these. And I'm really looking right now to see where that's going to be pointed and what that means to the future of municipal networks and the future of feasibility to get fiber to more folks. Hopefully when they say they're going to improve the infrastructure, that means middle mile, that means more availability for communities to take matters into their own hands where

the federal government, unlike not the state government, has let them down.

Christopher Mitchell (45:37)
Right. Yeah, I don't know if you caught it, Doug. I'd said before that if you if you want to do savings and you go out to a federal one of the highways, the the interstates and you grab the construction crews as they're preparing to like you ever you ever like drive down the interstate and you have to go to the other side where you have like one on one traffic because they're rebuilding the whole other side of the lane. You just tell them all to go home after they finish grading the dirt and then you saved

Doug Adams (45:53)
yeah. Yeah.

Christopher Mitchell (46:00)
You know, you've saved on the order of what, of thousands of dollars per mile, millions of dollars per mile? Yeah, yeah, I mean, I could save money any day, any day. You want money, I savings ideas like. ⁓

Doug Adams (46:02)
Correct. That's impressive savings. Impressive savings. Impressive savings.

Karl (46:03)
Very smart, very smart.

Doug Adams (46:10)
I think you've missed your calling Chris.

Karl (46:12)
Yeah,

Doug Adams (46:13)
Perhaps

Karl (46:13)
run for office. Let's get you into office.

Doug Adams (46:13)
you should be in Washington. Yes, yes.

Christopher Mitchell (46:16)
I, I do want to, I just want to leave a note about what's going on here. which is that, you know, things are getting better in some ways, which is to say that, we don't have random checkpoints on the highway or, or, exits. we don't seem to have random people who are not white just being asked for their papers because they're walking down the street. And that is an improvement. this is, the, you free, free country. should not be picking on.

people that appear to not be white. We, however, are still seeing a lot of arrests and the claim, I mean, Tom Homan was just on television saying that they're only going to be doing targeted arrests of criminals. And I just want to give people a sense of what that means because I said before, my wife has helped to patrol the schools and particularly

⁓ one that my son goes to behind that is a food shelf and at seven 30, yesterday morning as we recording this, I believe it was, the ICE grabbed someone. ⁓ it was a volunteer at the food shelf and, the pioneer press wrote a story about him later. ⁓ he's a young man, probably middle-aged man at this point. I don't know. I'm an old man, I guess, but like he had, he had committed crimes. He had been a drug dealer and he's open about this and he is now a community leader. He turned his life around. He realized.

at some point in the way that we desperately hope people who do terrible things do and he's a community are trying to stop kids from getting into trouble and now they're taking him out of Minnesota is a young man named Tao I don't know what his situation is in terms of like I would expect that he is here permanently legally but he had committed a violation and they're trying to pull him out of my community he might already been all Paso

Doug Adams (47:34)
Right.

Christopher Mitchell (47:55)
One of the people that I've talked to, a person that she was familiar with, stopped showing up at work and they got a phone call a few days later said, hey, I got picked up. I am a citizen. They didn't realize that until they shipped me to El Paso and they've just released me from El Paso. So whenever I get home, I'll come back to work. You know, the biggest question we have for people getting out is do you still have your cell phone and stuff like that? Because they just, take your stuff. It's just, that is continuing.

Doug Adams (48:14)
I'm sorry.

Christopher Mitchell (48:22)
And so when they say they're only going for people that have committed crimes, understand that's not like someone who's out as a predator in our community. These are often people who may have done something 40 years ago, paid the price and served the community to try to make it better. And they're being pulled out and we are worse off for it. So that is what we're dealing with right now. And I really hope the next show that we do, I can say things are looking better, but I really appreciate, mean, like I can't tell you how.

important is for all of us to see all the stuff going out there like people doing protests people You know sending money to help our neighbors. It really means a lot. So I appreciate that

Doug Adams (48:58)
Yeah, it does.

Karl (49:00)
We've been really proud of you guys watching that organization and the local people pulling together has been really impressive and we have lot of compassion headed your way.

Doug Adams (49:01)
Yeah, great job, Chris.

Christopher Mitchell (49:07)
Yeah, appreciate it. Thank you guys.

Doug Adams (49:08)
Keep it up, keep it up.

Thank you, appreciate it.