Broadband Reality Check: BEAD, Competition, and What Comes Next - Episode 672 of the Community Broadband Bits Podcast

Christopher Mitchell (00:12)
Welcome to another episode of the Community Broadband Bits podcast. I'm Christopher Mitchell. I'm at the Institute for Local Self-Reliance in St. Paul, Minnesota, and I'm joined by a frequent guest on our shows, Doug Dawson from CCG Consulting, the author of Pots and Pans by CCG, the wonderful daily blog. Welcome back, Doug.

Douglas Dawson (00:34)
Welcome back to USOL Christopher. I hope you're having a great new year. This is always interesting to talk about these topics with you.

Christopher Mitchell (00:40)
Well, thank you. We are, you're on here. Usually we do this sort of thing on Connect This! And I'll say that the intro to community broadband bits and connect this is going to change because we're, we're just, we're trying to figure out what we're going to do. But I could tell you that, I don't know. And in six weeks, perhaps we will have settled on a strategy and we will probably have one new show that unifies this together.

Douglas Dawson (00:52)
Hahaha

Christopher Mitchell (01:04)
⁓ We'll be doing some of these like one-on-one interviews and then also a the occasional, you know, four to five person show. I hope that you'll be there for most of those, Doug. ⁓ But we're gonna we're changing it up a little bit and trying to get more bang for the buck, I think.

Douglas Dawson (01:14)
I hope so, yes.

New year, fresh approach. I'm all for it. So, yes.

Christopher Mitchell (01:22)
Yeah. And we're

open to ideas. So if people have thoughts, I would appreciate it. I, I definitely, I've talked to Travis and Kim and, both of them expressed relief that they wouldn't have to spend as much time with me in the future. ⁓ so that's good for them. have a good, they're having a good year, but honestly, like we had a great thing for a lot of years, but I do feel like it feels like it's time to change things up a little bit. And I think we're going to have a little more variety.

Douglas Dawson (01:33)
you

Christopher Mitchell (01:46)
and a little less frequent of the four to five person shows. It takes a lot out of us to do it. It takes a lot out of me anyway.

Douglas Dawson (01:53)
Indeed, I'm all for it. Yep.

Christopher Mitchell (01:55)
So Doug, you and I are gonna talk a little bit about some of the stuff that's going on. We actually have numbers from the Fiber Broadband Association from last year. We can talk a little bit about the nature of the fiber business, the number of passings. You also had recently wrote about the wireless mobile decrease in speeds. We'll probably touch on that a little bit, a little bit industry trends. We're gonna talk a little bit about what...

you're expecting in 2026 that will be popping up that we'll have to pay attention to. And I think we're going to deconstruct a editorial from the Wall Street Journal that is titled Trump Unbreaks the Internet. And we'll talk about that. And then finally, I think at the end, I'm just going to have a couple of comments about some of the stuff that's

that's going on. And I'll say that I hope that we get through this. But right now, you know, family members of mine are actually at my son's school, keeping an eye on things. We have, you know, in Minnesota here in Minneapolis and St. Paul, we're having a major challenge with disruption to normal order from the federal government. And I'll just talk briefly about that at the end, but it's possible I get a text or a phone call and have to run away ⁓ here in the middle of the interview. So I hope that doesn't happen.

So Doug, we're going to talk first about the fiber trend, I think. And so ⁓ we got the numbers from the fiber broadband association. You know, not surprisingly, they say that last year was the best year ever for fiber.

Douglas Dawson (03:21)
And they're not wrong. I mean, there's a lot of companies building fiber. We spend all of our time talking about grants because, and the group that we've been talking through, we're very rural-oriented, but the money's not coming from grants. It's coming from AT&T and Frontier and...

Christopher Mitchell (03:25)
Yeah, not least about the previous year too.

Douglas Dawson (03:38)
and 40 other folks who are rebuilding fiber and they're all going crazy. mean, towns of 20,000 and up are all gonna get fiber. I mean, they're just doing it. It's amazing. We're now seeing a lot of communities getting two and three fiber providers overbuilding each other.

That's what we've always hoped for. That's true competition. I mean, I did some work in Lansing, Michigan, and they have three fiber providers on some of the streets. Those folks are spoiled, man. I mean, that's what we all hope to get to someday. that, know, so we're, yeah, yeah.

Christopher Mitchell (04:05)
Well, let me ask you about that.

So one of the things that they said, I didn't excerpt this in the, in the prep, but like, the, when a first fiber provider comes to town, I think the expectation was that they would get 40 to 45 % of the market. When a second fiber provider comes to town, there's a question of whether they would just cannibalize the first, but it sounds like often when a second provider comes on the audio on the order of 60 % of the market then takes a fiber service. And so there is a, there's a growth there.

Douglas Dawson (04:10)
Cough

Christopher Mitchell (04:33)
Would you say 60 % is a low number or a high number? Because I feel like why are only 60 % of people taking the best technology?

Douglas Dawson (04:39)
That's the answer is that's the loan. What you got to realize is it's economics. People are going to stick with DSL or FWA cellular because it's cheap. And it's not because they wouldn't love to have fiber in their house. It's because it's 30 or $40 a month. so, you know, every market has 20, 30, 40 % of the people who are in the category of lowest cost matters a lot more than quality. And we've got, let's face it, we've all got

parents and grandparents and they are gonna stick with, and as long as they can stream their Netflix and get their email, they don't really care about fiber. mean, some of them do, most of them don't. But over time, what we know is that 60 % will eventually grow to 80 and 90%. And so the cable companies are gonna have to go to DOCSIS 4.0 to match them.

And effectively when they do that, they're another fiber provider. we're going to, you know, at that point, the whole market will get to the fast speeds eventually, because, you know, the only low option will eventually be FWA wireless. So they're going to have their cheap folks, everyone else will be on multiple gigabit symmetrical. So it does take time to convince your parents to change the fiber. It just does. You know, takes them two, three, four. Finally, they go, okay, okay, I'll try it. And then they love it, right?

mean, that's what happens.

Christopher Mitchell (05:55)
Well, let me

ask you about the cable when, we transition. So Comcast made a significant investment in the, in the mid split, right? So they have much better upload speeds, still not fiber speeds. When they go to the new DOCSIS, which I thought was like this year, it was when we're going to see some of that transition for them and a little later for charter maybe. But the question I have is they're going to be able to offer, you know, 10 gigabits symmetrical. ⁓ and, and so when that

Douglas Dawson (06:03)
Yeah.

Christopher Mitchell (06:18)
happens, they still have many more single points of failure on the network with amplifiers and things like that. Are they able to get rid of a lot of that and offer a more reliable product than they had before?

Douglas Dawson (06:28)
No.

Christopher Mitchell (06:28)
So, okay.

Douglas Dawson (06:29)
It's

still the it's still there's still coax in the system. And so that had that hasn't changed. There's not fiber to the home. There's still fiber to the node. And there's already fiber to the node today. So now what they will probably do when they go to DOCSIS 4.0, that'll be an opportunity to split the nodes even further. Today fiber goes roughly to every 100 to 150 homes. They'll probably lower that to 75 or something that really makes them start to look like a fiber company at that point. Right. So but but still

Christopher Mitchell (06:54)
Mm-hmm.

Douglas Dawson (06:55)
You know, those, the coax is subject to freezing and water getting in the lines and, you know, it's subject to true interference of literally somebody's running a chainsaw in the yard and down the street and they interfere with my reception. mean, they're still subject to all those analog things that happens on copper. yeah.

Christopher Mitchell (07:13)
Okay.

Well, what we're seeing is that more than 60 % of US households have fiber available to them. And one of the things that I FBA said, we kind of contradicts a little bit what you said, maybe not, you you made the point that a lot of the money has come from the big companies putting in their own dollars to expand. But the art often bead. Well, they said they said challenges are often be they said government investment is still significantly boosting.

FDTH passings construction. I that's the rescue plan dollars and other Biden programs that expanded fiber. But the thing I would note is that like, what I find interesting is people think of that as being the government intervention in the market when the the BBB changed federal tax law for the 100 % bonus depreciation is also government putting a thumb on the scale to encourage more investment and and that is expected to do a lot, right?

Douglas Dawson (08:00)
Correct, Yeah,

let me put what you just said into perspective. Dollar-wise, grants look big. Here in 2026, there's gonna be about $13 billion spent from grant funding, which doesn't count BEAD assuming that if any BEAD gets actually started this year, which it might because...

Louisiana just actually said they signed six contracts yesterday So so we might see a little bit of construction even there there's engineering and stuff to do first But even without bead getting a dollar there's 13 billion dollars 13 billion dollars of grant funding. It's going to cover maybe three or four million homes versus There will be 30 or 40 million homes covered by these private investors They just happen to only spend two or three thousand dollars a home. So it sounds big

Christopher Mitchell (08:28)
Mm-hmm.

Douglas Dawson (08:47)
But in actual passing, it's not very big. It's still small piece of the market, and it's completely rural. And our whole background is let's make sure rural areas get fiber, so we're very thrilled to see it. It's still a small drop in the big bucket. Now, the vendors love it. I if you sell fiber, it takes 10 times more fiber to get to a rural house than it does to get to an apartment building. So they love rural.

construction because that's a big dollars and that's where all the money goes but but it's not it's not the predominant recent fibers expanding so

Christopher Mitchell (09:16)
Okay. one thing, the next thing we wanted to talk about was what's on the future. 2026, what should we be thinking about paying attention to? Did the show last week with Blair Levin. He talked about some of his expectations and things like that. What are some of the top line things that you think we'll be talking about over the course of this year?

Douglas Dawson (09:38)
One is I'm expecting a really interesting fight to get going on spectrum. Congress came out in the big beautiful bill, which I have a hard time saying that name because there's nothing beautiful about it. it was big. Correct.

Christopher Mitchell (09:49)
No, I mean, I'll just say like, it drives me crazy. Yeah. I mean, it's a big, beautiful tax on my son because like when you lower

taxes and increase spending, it's not, you know, you get the economy revved up, but it just means that the next generation gets to spend more.

Douglas Dawson (09:59)
You're right. Right.

But anyway, that bill forces the FCC to set aside 800 megahertz of spectrum over the next three years. And this is the first of those three years for auction.

And auctions are all going to go to cellular. So that's an absolute giveaway to the cellular companies. And the FCC is going to have to do it. And it's going to have to be what they call mid-range spectrum, which is between about 700 megahertz and about six or seven gigahertz. And so that's the sweet spot. That's the spectrum everybody wants. There's 100 different uses in there today. And so they're going to have to cannibalize some of those uses, which means we're going to have some big, big fights because

The math to get to that much spectrum, they're almost going to have to rob Wi-Fi to do it. And Wi-Fi is the most valuable spectrum by a factor of 100 that we've ever had. It's so much more valuable than the spectrum because everything runs on it, right? We wouldn't be having this podcast if you and I weren't on Wi-Fi. We could because we're nerdy enough to have hardware computers.

Christopher Mitchell (10:58)
No, I wouldn't.

Without. Yeah. No. So let's play that out for a second. Even if we hardwired the computers, there would be no market demand because we wouldn't have these wireless devices. If people were paying the kind of prices that like the mobile carriers wanted to pay if they weren't disciplined by the ability to have hotspots and Wi-Fi. I don't think this I don't think we would see industry have developed in the way that it has at all. ⁓ So yeah, I mean, I think it's a really good point. But I want to

Douglas Dawson (11:03)
Yeah, yes, there would be. No.

Yes. Yes. Yes.

I don't think we'd have

5G if Wi-Fi wasn't there. You're absolutely right. So there's going to be a big fight and it's going to be the big boys against the big boys. mean, the cellular carriers won that battle because somehow they got to the lobbyists. mean, they got into that bill. Tech guys want the Wi-Fi. So we have two really big factions here who are going to fight like hell over the spectrum. It's going to be very interesting to watch that battle.

Christopher Mitchell (11:27)
So, but I I see.

Mm-hmm.

So let me put it in context for people though. So you said between 700 and seven gigahertz. And for people that I think appreciate a lot of that spectrum is being used by government agencies. Yes. so like some of it's being used for like, some of it's being used for things that are inefficient, right? Because the way it was used 30 or 40 years ago, you required a broad swath of it to use and now it can be more efficient with it. And so it needs to be repurposed.

Douglas Dawson (11:58)
It's all being used. It's all being used, yes.

Yes.

Christopher Mitchell (12:11)
This is what the federal communications commission literally exists to do. And the challenge is, that if they have to, if they have to upset people that they're going to take spectrum away from, because there's a value to it, even if you're using it inefficiently, the fact that you have access to it provides value to you. You don't have to like invest in new equipment and depending on whether that's the department of defense or whether that is an industry, um, you know, so they have to take it away from someone.

Douglas Dawson (12:15)
Yeah, it's their number one function. Yes.

Christopher Mitchell (12:36)
Now I've been sort of poised because you remember our friend Travis had been saying last year that he thought the federal communications commission would pleasantly surprise us. Well, I think I was pleasantly surprised by the federal communications commission a day ago when they announced they're going to have this vote on six gigahertz, which is used by Wi-Fi and is going to be have some different power limits that seem like it will be better for future devices and faster transmissions and things like that. But you think that's not actually, I think, the end of the story, right?

Douglas Dawson (13:04)
It's not the end of the story. That's a giveaway to the Wi-Fi industry. It's really a giveaway to rural broadband more than anything else. And so that's a giveaway that we like because it's going to allow for some faster broadband speeds on Wi-Fi.

Christopher Mitchell (13:10)
Right, so it's a giveaway that we like.

Douglas Dawson (13:16)
However, that doesn't mean you're still not going to come back and take half of the spectrum away. It'll just be the high powers on the half that's left. And that's not going to please Travis at all that they actually come and rob the spectrum away. There are some inefficient uses. Like there's a little slice the FCC gave 15 years ago for self-driving cars. Total failure. They need to take it back. It was a failure. Everyone convinced them. Yeah.

Christopher Mitchell (13:37)
That's the DSRC, right? The Dedicated Short

Range Communications? Yeah.

Douglas Dawson (13:40)
I mean

everyone convinced them cars would be talking to each other and the fact is they could talk to each other better with Lidar than they can with spectrum anyway So they just don't need that so so but that's a really tiny piece of what they have to put up to auction So all the rest of it they have to steal it from somebody some of its good. They're gonna kick unfortunately, they're gonna kick the

the military off of some of it, because they're not going to give them a choice. They're going to say, we're taking your spectrum. Well, I kind of like that military to have spectrum. I don't know about you. But one of the big ones that's really useful is weather satellites. It's like, kind of like weather satellites and GPS, right? So mean, every one of these slices has really important stuff on it. So yeah.

Christopher Mitchell (14:13)
Right. Well, that's the thing is that I feel like.

Yes. And the thing is, is that like, there's this question then of like, well, if we take it away from the department of defense, if we take it away from the weather satellites, we'll be able to auction it and make more money of it from AT&T. But the net loss to society will be greater because like we will lose more in terms of potential defense capacity or others when, ⁓ so AT&T can charge us for it as opposed to if it went to some sort of open ⁓ shared spectrum. and this for me, that this is the future is not so much.

Douglas Dawson (14:34)
much greater. Yes.

Right.

Christopher Mitchell (14:48)
carving up the existing spectrum, it is making sure that spectrum that is not being used in a given location could be repurposed in a way that didn't interfere with the owners of it or the primary license of it. That's the future, but I feel like this FCC doesn't take that very seriously.

Douglas Dawson (14:50)
It's sharing it. ⁓

And that's the actual real travesty of it, because people win these nationwide licenses and they only use it in 10 % of the geography. It's like, why don't you let someone else use it in the other 90 % of the geography? And they're going, and they won't, because that threatens their 10 % that they are using. so people are sitting on unused spectrum in just piles. so there's a whole lot of better way to solve the problems. Yes, so.

Christopher Mitchell (15:27)
And this is where,

I mean, I always appreciate again, ⁓ people that have come on our show that bring a lot of financial literacy. One of the things that we don't talk a lot about is just the value of a firm and a firm that is sitting on spectrum is more valuable and therefore commands more value on wall street because they have spectrum that they could put to use in the future. They do not want to give it up even if they don't have a current plan for it.

Douglas Dawson (15:39)
Yes.

EchoStar, which was on the way out the door as a company, because let's face it, satellite TV is dying. mean, 10 years from now, there will be no satellite TV customers. And it's sinking fast. They got bailed out. mean, they're making like $60 or $70 billion by selling this spectrum they were sitting on. They're going to leave the market.

Very wealthy, nothing to do with what they did for a living. just, years ago, they got a hold of the spectrum for cheap. Now look, sitting on, and they sat on that spectrum for a decade, and the FCC should have taken it back long ago. So, but instead they sold it to AT&T and they sold it to T-Mobile, so. ⁓

Christopher Mitchell (16:23)
What else are we still looking

at? So spectrum is a big issue, what else?

Douglas Dawson (16:26)
Well,

here's an interesting one, and this is just a week old. Is there a chance that Congress just developed a tiny little minuscule backbone? They're starting to legislate on topics where they're disagreeing with the administration, because if they are, there's 10 or 15.

topics just in our space alone that really need legislation. They need to fix the universal service fund. mean, you name it. We've all talked about all these topics for the last year, right? So it's very possible. I think that that's going to be an interesting thing to watch to see if they actually start legislating again, because for a year they've been absent. Congress only passed 36 bills last year, 20 of which were putting plaques up to name some, you know.

congratulate somebody. So there's almost no real legislation last year. But all of a sudden, just in the last week, they've passed four or five interesting things that no one expected. So I think that's a very, very interesting trend to watch. And maybe it's just, yeah.

Christopher Mitchell (17:19)
Yeah. And I think, I for people, for people

who aren't paying attention, like there's significant changes in that, you know, it appears that president Trump vetoed a bill for infrastructure projects in Colorado solely because he's mad at representative Boebert who's in his party. Right. And similarly in Florida, and there can be repercussions there where we see backbones starting to develop. And some of these people that are a part of Trump's party who will not feel like they have to be beholden him if he's going to cut them off at the legs in front of their voters.

Douglas Dawson (17:30)
Yeah. Yes.

Well, and the other trend that we have is the administration's losing 95 % of its lawsuits. And so all the things that they've canceled about broadband may still come back with the courts. The only question will be, it too late? Yes. All right.

Christopher Mitchell (17:59)
Well, that's, yeah, I want to do a show in the future on Wicker's bill, because there's a question that I think of whether the lawsuit happens more quickly or if, or if some in

Congress rubber stamp an approval for illegal changes to the programs.

Douglas Dawson (18:11)
Correct, correct. that's another interesting trend to watch. You know, the other interesting trend is the FCC declaring itself to not be an independent agency. It's like, well, by law they are, and they're supposed to be independent of everybody. by saying that they're not independent, he simply said, I'm going to do whatever the president tells me, essentially. And that's really not his role. And at some point,

I don't even know what that means, but it's mind boggling that they would take that approach because it weakens them. It actually weakens their ability to get anything done because it makes it so much easier to challenge them in court now. mean, if he wouldn't have said, he literally just made it 50 % easier for lawsuits against the FCC to succeed by saying that, because you can say, this isn't even their position, they're just mimicking the White House position. So yeah.

Christopher Mitchell (18:54)
Well, I I feel

like I agree with you 100%. They're clearly an independent agency. Like the, the precedents, there's just, there's not a doubt about it. Um, what I would say they're not a serious agency anymore. Right? I mean, like they've, they're down to what they have three commissioners currently. Like, you know, we'll see how long that even lasts. They're supposed to have five. Um, uh, you know, it's been, we've constantly complained about them. They, they, they, they're, don't take their job very seriously, um, on, most issues.

Douglas Dawson (19:00)
Yes.

Yeah, yeah.

Christopher Mitchell (19:20)
It's incredibly frustrating when you look at the fact that here it is in 2026 and we still have to argue about who has access to the Internet. We don't know because the federal government doesn't bother to track it in any kind of way that like passed this little laugh test.

Douglas Dawson (19:33)
Right, right. so anyhow, that's something worth watching. You know, as far as other topics, you know,

But everything else is just we're kind of in hold waiting all the things I mean, you know is bead ever gonna actually be built Travis isn't here today, but it's still a valid question because They're not done making changes to it. They're letting states sign contracts now, but they could pull those back I mean, we're not at all done yet till there's actually construction done. So, you know, we're just simply not there There's there's still a bunch of states that haven't got their play. Will they ever approve California's bead plans because of the

Christopher Mitchell (20:06)
My understanding is

they're going after, NTIA is going after Washington and Vermont because their plans in those two states significantly involve public entities getting the funds. know, like these are proven models that have worked in both places. And, you know, I'm strongly supportive of municipal broadband. I think we should see a lot more of it. At the same time, if Nevada told me that like most of their money was going to municipal broadband, I think I would be like kind of confused, you know, like, but in Washington and Vermont, it makes a lot of sense. And the, the federal government.

Douglas Dawson (20:07)
Yes.

Yeah.

Right, right, right, right.

Right.

It does.

Christopher Mitchell (20:34)
⁓ under under Trump and particularly Arielle Roth, they want to try and punish those states for going that direction.

Douglas Dawson (20:40)
And they're just punishing them for whatever. I don't know. At this point, politics sort of override all the other trends. I think we're kind of on hold for everything else. That's unfortunate to say, but you know.

Christopher Mitchell (20:52)
Yeah, no, I mean, I

think we want to be honest here. Like, I don't like there's things that I say where people like Chris, you're clearly partisan and you have political beliefs and you know, and the fact that they're complicated doesn't change the fact that I want to hear them. Well, like it is not controversial in my mind to say that we are not how we don't have a federal government that follows the rule, the law, right? When the federal government, when the government is constantly losing its lawsuits, when it cannot find lawyers that will defend its actions.

When its own attorneys are being told by the court, they literally cannot put their name on documents because they've not been appointed according to the law. Like these are not, like this isn't me putting my opinion on things. This is like the fact that the federal government is engaged in more lawlessness now than it has throughout most of its history. I'm not gonna say all of it, but most of it.

Douglas Dawson (21:22)
Hahaha

No, they're certainly not partisan. I mean, the fact is when laws are passed and they simply only obey half of it, and that's what they did to BEAD when they simply didn't give the dollars to Fiber because they decided not to. No particular reason. They just, they called it the benefit of the bargain. It's like, which was no benefit or no bargain. Yes.

Christopher Mitchell (21:50)
Right. Right. And, yeah,

and they, are processes they could go through in which they would have changed the rules that would have fit with the way the system works. And they decided that would take too long. So, so it's very frustrating. ⁓ I want to, I actually want to, I want to ask, is there anything else on predictions? Because I want to get to the Wall Street Journal article here as well.

Douglas Dawson (21:57)
Yes. Yes.

Right.

Nah, my other predictions at this point feel lame.

Christopher Mitchell (22:13)
Hahaha!

I mean, I do, think it's hard to predict. and, ⁓ and, and just deeply frustrating. okay. So, ⁓ this is an article, not an article, this is an editorial. And I say that because like, boy, the, the, the Delta between a, article written by professional reporters at the wall street journal and the editorial board. I don't know if there's a bigger Delta in the world right now between the credibility of these things. but the wall street journal editorial board is its own world.

Douglas Dawson (22:17)
Yeah.

Yeah.

Christopher Mitchell (22:40)
And granted they're against regulations that I think are reasonable, difference of opinion. But let's see. He said, and I know that you haven't read this closely, but they're talking about how the Trump administration got rid of a lot of the barriers. So Congress appropriated 42 billion in the 2021 infrastructure bill for states to expand broadband to unserved and rural communities.

The spending was unnecessary since satellite services like SpaceX, Starlink and 5G fixed wireless services were rapidly closing the so-called digital divide. Upward of 99 % of households already had high speed Internet So Doug, the Wall Street Journal is saying that, you know, like this is the market was solving this problem. We did not need any kind of program to address this.

Douglas Dawson (23:21)
Now, first off, let's start with the basics. Somewhere between 88 and 90 % of houses actually buy broadband. So there's still 10 to 12 % of all houses who don't have it for some reason, whether it's not available at their house or they can't afford it, they don't have it, right? And if you're in a rural area, it might be both because it's like, hey, you if my only choice is satellite and I can't afford $120 a month, there is no option in my house. So we certainly have not solved the digital divide.

But their real issue there is that somehow Biden had policies in place that were hurting the carriers. And you just can't point to any that did that. Again, Fiber Broadband Associated said it. The amount of fiber that was built in and 2023 under Biden broke all sorts of records. And the people who build broadband, other than people who get grants, are doing it out of their own pocket. And obviously,

regulation didn't stop any of them from building more fiber. You know, they just decided it was a good business plan. And, and we and they're actually five years later than we thought they should be. It took them a long time to get there because these are big conservative companies. How many years did we beg Verizon and AT&T to please start building fiber over your copper? But once they finally decided to do it, my god, they're going gangbusters, right? So I mean, I mean, AT&T is covering the country in fiber. I mean, they're going to be by far the biggest

Christopher Mitchell (24:40)
You get a, you get a wonder where

Douglas Dawson (24:41)
Yeah.

Christopher Mitchell (24:42)
if AT&T had decided to focus on telecom infrastructure rather than adventuring around and content and owning HBO and those things, you have to wonder where AT&T would be. I got to think its stock price would be much higher. There'd be a lot more value. They would be in a much better position. There'd be less competition. So maybe it's good that AT&T has been so poorly managed. And for those of us that care about competition, which does not include the Wall Street Journal, let's be clear about this, because when you read this, it is very clear the Wall Street Journal's position.

Douglas Dawson (24:53)
Yeah.

Yeah.

Christopher Mitchell (25:08)
is basically if people have a service available, it is good enough, right? There is no market for these services. They'll talk about how it's important to have markets for it, but as soon as there's one provider, they're happy with that provider and they don't think there should be further competition. Certainly not a problem that government should solve.

Douglas Dawson (25:13)
Yes.

Well, let's talk FWA wireless, because that's the other half of their statement. In rural areas, you have to be within about two miles of a cell tower to buy that.

And if I go to most rural counties and I plot where the six, eight or even 20 cell towers are, it usually still doesn't cover, and you draw two mile circles, it probably doesn't cover more than a third of the geography of the county. So that means that two thirds of the county does not have that as an option. And the cell carriers are not building new towers. so, and there's nothing they can do to make that any better. They can make it faster for the people within the two miles as they improve the technology, but they can't make it go any further. It's just a natural limitation of the

spectrum they use. that's not that turns out, believe it or not, that turns out to be a great product for urban areas. know, friend Alan at Open Broadband just posted on my blog yesterday that he hooked up an FWA customer to 500 gigabits in Charlotte. Of course he did. They're in Charlotte. You know, they're close to a tower. It's a great, that's not a bad broadband product.

Christopher Mitchell (26:19)
Right, they're close. They're close to the, yeah.

Douglas Dawson (26:25)
It's like, hey, congratulations to them. But there's nobody in the Royals is getting that product unless they unless they happen to be under I talked to a farmer who was thrilled with his FWA. Literally, he said the towers on my land. It's it's about three, you know, three lots away from my house and I own where they came and bought the place to put the tower. His neighbor a mile away bought it. They didn't like it all that much because they were getting half the speed. One another mile away bought it and they instantly turn it back in. They go this stuff doesn't work at all. It's very, very distance limited.

And so in that case, that tower maybe serves six people. It's like, really, that's not a giant benefit to that county to have that there. yeah.

Christopher Mitchell (26:54)
Well, that's

Well, let's also be clear that you've said FWA. What Allen is doing with open broadband is fixed wireless using probably like a Tirana product. A lot of the FWA is no.

Douglas Dawson (27:15)
⁓ no, no, no, no, no.

He does every technology. He will sign you up to Starlink. He will sign you up to FWA. He will build his own fixed wireless. He will build fiber. He connects you to the fastest thing you can get. So he actually hooked them up. He does a professional installation, yes.

Christopher Mitchell (27:29)
But my point is, but I don't think,

right, but like, but I don't think you're getting 500 megabits, certainly not symmetrical from like a T-Mobile connection.

Douglas Dawson (27:37)
yeah, you are. ⁓

it wasn't symmetrical. ⁓ not at all symmetrical. The upload speeds are probably 15 megabits.

Christopher Mitchell (27:44)
But was he, was

he using like a T-Mobile, like mobile wireless spectrum for a home product? and he was getting 500. Okay. I'm just totally wrong. Okay.

Douglas Dawson (27:47)
Yes. Yes. Yes.

Yes. But because he will hook you up to almost any technology they charged for the professional installation to make sure and they follow up to make sure it keeps working and that sort of thing. He does a lot of people on his own network, but he also hooks you up to other people's networks. But you're absolutely right. That product did not have its metrical speeds. The upload was probably crap.

Christopher Mitchell (27:57)
Okay.

Okay, all right.

But

on Toronto, you can also get pretty good upload

Douglas Dawson (28:12)
And now

I'm going to get an email from him going, don't say I signed up somebody with crap.

Christopher Mitchell (28:17)
Well, I mean, let's say not as good as fiber, but probably something that allows them to do well. ⁓

Douglas Dawson (28:20)
not as good as fiber. Oh, they're probably, well,

they're probably happy with it. Is that all that really matters? That the customer's happy with it, yes.

Christopher Mitchell (28:30)
So the, this, this editorial goes on to say fiber projects were also given heavy preference over satellite and fixed wireless services, even though the latter could be installed faster and at a fraction of the costs. It goes on to say, Ms. Roth said this month, the administration's deregulation is on track to save taxpayers $21 billion. You know, I want to, I want to go to the app ed board, to the editorial board and say, you know how we could actually save this country? We could have saved it hundreds of billions of dollars.

When you build an interstate, you know that you actually, the first thing you do is you build a dirt road and then you put a bunch of infrastructure on top of it, including concrete, reinforced concrete. And that takes a lot of time and effort. And if we would just decide to stick with the dirt road rather than go into the trouble of putting the reinforced concrete on top of it, we would save so much money. Wouldn't that be great? Because if you take all the context out of it, yeah, it's a savings. Like if you do less,

Douglas Dawson (29:21)
Yes. ⁓

Christopher Mitchell (29:23)
and you invest less and you have fewer jobs, you save money. It's not a hard math problem.

Douglas Dawson (29:29)
Well, the funny thing is they may not have saved anything. She also admitted in a forum in late December that they might have to give the other 21 million to the states anyway, which case they should have mice well used on an infrastructure, then to give them for purposes of an infrastructure. But this was the one, we always called that a lifetime opportunity, $40 billion of grants to build infrastructure, because it's around for the next 50 to 75 years.

Christopher Mitchell (29:53)
Right, to build infrastructure that would learn from and not duplicate the failures of 20 years of poor spending decisions. And the Trump administration literally came in and said, we're just going to do those bad decisions again and ensure that in the future we need to spend more money again.

Douglas Dawson (30:01)
Well...

And then let's also talk about my neighborhood. Six counties around me, for some reason that none of us understand, the broadband office gave 100 % of the bead locations to Amazon One. So talk, you can build it faster? Well, they don't even have a business. don't have a, it would be faster to build fiber than it is to wait for them to hook those folks up. They're not even an ISP.

As of December, they had 102 satellites in the air. They need 3,000 for this to work. So it's like, really? So that's going to be faster than building fiber? Correct, correct. So those counties, 100 % went to that ISP who's a non-existent ISP. Wall Street Journal kind of missed that little footnote there. So yes.

Christopher Mitchell (30:38)
Not if you don't care about those people and you just totally ignore them.

Yeah,

you know, this is why we don't take the editorial page seriously. ⁓

Douglas Dawson (30:54)
No. Well, no, because editorial

pages talk about big policies and you started it off right. They don't like any regulation. so that's their starting premise for, yeah.

Christopher Mitchell (31:02)
Yeah. Yeah, they want to see this. But this is

the waving of the hand like they want to see markets allocate capital. Well, okay, this interesting to me because first of all, markets are allocating capital, right? Like like a lot of these projects still require private capital in order to work. The federal government is putting a thumb on the scale to say we want to make sure that these rural markets are not left off. We want to make sure they're not just ignored. And because we built a telephone system 100 years ago.

to make sure that everyone was connected with roughly comparable technology. That led, as well as electrification, that led to significant productivity improvements that benefited the entire economy. If we had let markets just decide who had telephone service and who had electricity service, we would be relatively impoverished right now, all of us, because our farms would be far less productive, we would have less people on the planet, frankly, given the power of our farms, and we would all be so much worse off.

Like the thing that drives me crazy is I am 100 % about markets, you know, resolving these issues. And the federal government should be involving, should be involving itself in a way that is, is like reciprocal and helpful to markets, not ignoring them. But the idea that just markets alone should do it without any oversight or any sort of planning is, is, is totally failed by history.

Douglas Dawson (32:13)
Wow.

Let's talk about three reasons why BEAD was the right solution. One is our largest economic driver in this country is still agriculture and farms need broadband. so they've now cut back on farms getting broadband. And it's really hard to understand why you would do that. I mean, there's no farmer now that doesn't tell you he needs it. Secondly, the federal government now is making everything they do go online.

And you can't go online and interface with the government if you don't have broadband. And so it's like, well, if you do A, which is force everybody online, you ought to probably help them get online. Third, this government has said the future is AI. Well, you can't take part in the AI economy if you don't have broadband. It's like, maybe.

finishing those infrastructure projects was the way to go if those three things are all true and they are all true. So it's like, this doesn't make any policy sense. mean, you know, every home that got connected to fiber is now able to do all those things. The farm is happy. They can take part in the AI economy. They can take care of working online with working with governments. That's what we're supposed to be getting to, right?

Christopher Mitchell (33:22)
Well, one of the things that is left out of the Wall Street Journal economics is the cost. So the farm will now have a solution from SpaceX, which it already had before. So we're spending money that's totally unneeded in the sense that like that farm could have bought SpaceX three years ago. And now we're going to give Elon Musk a check so that farm could buy the same product tomorrow. They're going to be paying more than they would have if a local co-op had built that fiber out.

Douglas Dawson (33:27)
Yeah.

Yes.

Christopher Mitchell (33:46)
And so they're gonna be getting a service that is five to 10 times worse just from a bandwidth capacity. Now, you're just ignoring the quality of service issues and the interruptions, but they're gonna be paying more like on the order of 20 to 30 % more than they would have paid for a fiber connection for five to 10 times less connectivity. It's a terrible proposition, but that part they treat like a...

Douglas Dawson (34:04)
Well,

it's even worse. It doesn't work because farmers now upload terabit files about surveys of their fields. They can't do that over Starlink. There's just not enough upload. They couldn't upload it in a week. So they still have to drive that file out to somewhere and give it to somebody.

I mean, this is not solving their problem, and it's something they do routinely. mean, it's simply an unworkable solution. It doesn't actually function. Yes, they can watch Netflix on Starlink, absolutely. And we've now proven through Travis that you can do a webcast, but that's not the same thing as having a working farm.

Christopher Mitchell (34:39)
Yep. All right. Any any last thoughts on this first show for you and I of the new year?

Douglas Dawson (34:45)
It was a total success.

Christopher Mitchell (34:46)
You know, I...

Douglas Dawson (34:47)
These are

all good topics. I mean, there's a lot to talk about right now. It's just amazing. Every week there's more topics than you can deal with. It's like, you have to kind of whitter the list down to what do we talk about, right? It's really kind of mind boggling. so.

Christopher Mitchell (34:59)
Yeah, it's exciting. ⁓ Just the amount of technology that's out there. And I think one of the things that I would expect over time, I don't think it'll change anytime soon, but I think we may talk about more tech beyond the Internet. Although ⁓ we will always ground ourselves in the Internet because I feel like kind of like electricity was the basis of everything moving forward. You know, all the technology. It's hard to imagine a technology that is created in the next few years or next decades that isn't assuming connectivity.

Douglas Dawson (35:03)
Yeah.

Yes, yes.

Christopher Mitchell (35:27)
Right? mean, like the network is essential for all technology moving forward is what it seems like.

Douglas Dawson (35:27)
Yes, yes.

I mean, I just wrote a blog about a new technology that implants a thing in your brain to communicate with computers. It's still based on the Internet, right? And it scares the hell out of me. I don't know about you.

Christopher Mitchell (35:39)
Wow. Yeah.

Yeah. I mean, I read a lot of sci-fi about it for people that are interested. The Nexus Trilogy by Ramis Naam N-A-A-M is a tremendous ⁓ book about what can happen with that and what happens when that is a network as opposed to just an interface for you. ⁓ So I did want to, I want to follow up with something and for people that aren't interested in

Douglas Dawson (35:46)
Yeah. Yeah.

Yes.

Yes. Yes.

Christopher Mitchell (36:02)
Kind of what's happening in Minneapolis and St. Paul. ⁓ you know, you can feel free to tune out, but, I have to say that like, it's been very distracting for me. ⁓ it's been, it's difficult. you know, I was up here during the George Floyd, murder and then protests and, and looting. I mean, I'll say that like, am firmly frustrated with the way the media covered things because there were people that engaged in looting. Many of them were not from, the twin cities. Actually people came in from further away to engage in arson and looting.

There were some people as part of protests that did terrible things and looted and burned, but a lot of the looting was separate from protests. And when you're in the middle of some of this stuff, it is hard to reconcile what you're seeing and also the feeling of powerlessness that comes. And I'm just frustrated because around Minnesota, around the Twin Cities in particular, like, I mean, I just found out there was an ice scout at my son's school this morning, scouting out what was happening. Parents have organized themselves.

to be watching after Roosevelt high school in Minneapolis had a major altercation with border patrol in that case, think, ⁓ escalating things, pushing students and teachers. There's ⁓ just a lot of things going on and it's hard to live here and watch whether it's here or whether it's in LA masked federal agents who are acting without accountability, who are not following their own rules of engagement in many cases, who don't seem to have any sort of accountability.

⁓ taking these actions and it just feels at times like no one cares, right? We have large protests and things like that, but it is, it is difficult. And I find it hard to reconcile as someone who is very pro-government. think government is important. I think it needs to be controlled. think government violence needs to be like, you know, very carefully monitored, even though I'm in support of it at times, I think it's necessary. but it just feels like it feels very difficult. And I went to an undergrad college.

where I was mostly, I mean, it was a college that's a small school. It's the only private school I've gone to in my whole life. And it was amazing experience. I met lots of people from overseas. 20 % of the student body is international students. Many of them now work in the United States and they have to travel with documents, even though they've become US citizens. They've been here for 20 years contributing and they're afraid that they're going to be abducted by someone, ⁓ even though they're citizens and have to spend days.

hoping that the federal system will recognize that they actually have the right to be here rather than being imprisoned while that's being sorted out. It's, this is not the country I wanted to live in and this is a telecom show. I'm not going to talk about it in the future. I don't think, but like this is a, it's a major impact. And I just feel like I can't sit here and not talk about it, even if it turns some people off. ⁓ you know, I take it seriously and I want to live in a country where people disagree with me. ⁓ but when we have government power acting this way, it is dangerous and we need to get a handle on

We need to follow the rule of law and I don't feel like we're doing that. So I want to share that at the end and Doug, not gonna, I don't want to ask you to comment on it. You know, I appreciate you, you know, doing this great show with me and I want to thank you for your time. I want to thank people for their work and I want to build a great country. Like the last thing I guess I would say is that as I was being shaped and doing this work, I was very influenced by Jim Baller and Jim Baller focused on developing a national strategy for broadband in the 2000s.

And the thing that he always said was, we want to be a great nation and a great nation needs a strategy for this. This is that important. And I've long thought about the work that I do is focused on communities, but I want to build a great nation. I want us to be a great country. And, and I think we can do that. I think it's going to take a lot of work. But I don't think we're heading in that direction right now. It's really frustrating. Doug, thank you again for joining me on this show. We're going to be doing.

A couple more shows like this in the community broadband bit space. I think we're eventually going to have a consolidated feed for our various shows. We're talking about the Internet. We're trying to think of a new name. We're going to be doing the old shows, you know, similarly, but not as frequently in terms of that style of connect this. So for everyone who's been with us, thank you so much. And Doug, thank you again.

Douglas Dawson (39:51)
Yes,

and let's build a better nation, 100 % with you. Yes, sir.

Christopher Mitchell (39:55)
Yes,

yeah, absolutely. ⁓ One that I think will continue to lead the world. So I want to thank everyone and I hope everyone is safe and having a good new year. We'll be keeping to the telecom topics in the future shows.