Biden administration signals incumbents likely to be favored in challenges of proposed state FTTP builds under infrastructure bill

Federal grant money for advanced telecommunications infrastructure that would flow to states appropriated in the Infrastructure Investment and Jobs Act prioritizes projects in areas determined by maps under development by the Federal Communications Commission (FCC) that would serve premises where at least 8 of 10 prems cannot order advanced telecommunications service providing minimum throughput of 25/3 Mbps.

Under the bill expected to be signed into law next week, states receiving the funding can award up to 75 percent of the project’s capital cost as subgrants. The measure specifies states first fund builds that would serve these “unserved” premises. States can then award grant funds to projects where at least 80 percent of prems in a proposed project are “underserved,” which as defined in the bill means those that cannot order service providing minimum throughput of 100/20 Mbps and with latency sufficient to support real-time, interactive applications.

But in order to do so, states must first certify to the Department of Commerce’s National Telecommunications and Information Administration (NTIA) that the bill authorizes to oversee the grants there are no “unserved” premises in the state.

Combined, these provisions stringently proscribe the scope of state sponsored projects in most states.

However, the bill affords the NTIA a fair degree of discretion. It authorizes it to fund “priority broadband projects” that provide advanced telecommunications service that meets throughput and quality of service standards as determined by the NTIA. As well as those that would “easily scale speeds over time to meet the evolving connectivity needs of households and businesses and support the deployment of 5G, successor wireless technologies, and other advanced services.” That could reasonably be interpreted as a fiber to the premises (FTTP) infrastructure standard.

A likely scenario is states and particularly those wishing to fund publicly and consumer cooperative owned FTTP projects will face push back from incumbent investor-owned telephone, cable and fixed wireless operators challenging their funding under the bill, contending they already provide 25/3 Mbps or 100/20 Mbps throughput to at least 80 percent of prems where FTTP is proposed to be built – what they term as “overbuilding.”

States must establish a “transparent, evidence-based, and expeditious challenge process” in which advanced telecommunications providers can contest a proposed project’s eligibility and whether a particular prem within the proposed project is unserved or underserved. States would have 60 days to resolve challenges. The bill authorizes the NTIA to modify the challenge process and overrule state determinations of challenges.

A question as the bill is implemented is to what extent the NTIA will exercise its discretion as permitted under the bill to favor publicly or cooperatively owned FTTP projects. Or side with commercial incumbents bringing challenges to proposed state projects. Department of Commerce Secretary Gina Raimondo offered a clue the Biden administration may be inclined to side with incumbents on challenges. "We have to make sure we don't spend this money overbuilding," Raimondo was quoted as saying in this November 9, 2021 Reuters story.