IIJA challenge process sets stage for battles between WISPs and telcos

The advanced telecommunications infrastructure (ATI) component of the Infrastructure Investment and Jobs Act (IIJA) allows for challenges of proposed projects that request states award 75 percent grant subsidies appropriated for ATI in the bill. Challengers can claim a proposed project does not meet the funding eligibility standard of at least 80 percent of premises within the project scope as being “unserved." That's defined as being unable to obtain reliable service with a minimum throughput of 25 Mbps/3Mbps with latency sufficient to support real-time, interactive applications. The statute authorizes states to adjudicate challenges. The National Telecommunications and Information Administration can reverse state determinations and modify the challenge process.

The challenge process sets the stage for battles between fixed Wireless Internet Service Providers (WISPs) and telephone companies once the funding becomes available next year. Verizon, AT&T are looking at C-band spectrum as a cheaper alternative to building fiber to the home. Should these telcos seek IIJA grant subsidies to expand their fixed premise wireless presence using C-band spectrum as AT&T CEO John Stankey suggested this week, WISPs could conceivably contest proposed projects as ineligible because WISPs already offer service meeting the minimum throughput standard. WISPs could use the same rationale to challenge proposed telco fiber to the premise (FTTP) builds using IIJA subsidy funds. Either way, FTTP deployment – already decades behind where it should be in terms of modernizing legacy copper telephone lines and building capacity for future bandwidth demand – would be further delayed.

WISPs are likely to view both IIJA subsidized telco expansion scenarios as an existential threat to their business model. Telcos could easily undercut their relatively high monthly rates for fixed prem wireless service. Telcos also benefit from greater economies of scale and lower costs since they could deploy their own fiber backhaul circuits. And telco owned FTTP would decimate WISPs since most customers would quickly switch to telco fiber once it became available and at lower monthly rates than WISP service. 

The forthcoming fixed wireless fights -- and most importantly the prolonged delay of modernizing copper to fiber -- could be avoided if the IIJA was revised to establish an FTTP infrastructure subsidy eligibility standard rather than the throughput-based standard in the bill as enacted.