Terry Gerton U.S. Telecom has a whole puzzle of things that you’re dealing with right now. I thought we might start first with the Broadband Equity Access and Deployment (BEAD) Program. How are you addressing this program that’s really focused on closing the digital divide across the country?

Jonathan Spalter It is an extraordinary moment where we are on the precipice as a nation, both industry, the broadband sector, working hand in glove with government to deploy $42.5 billion to ensure that we can provide the best possible broadband options to millions of Americans that still are not served in communities around the country, particularly in rural communities where getting broadband has been hard. It’s been three and a half years now that we’ve been ramped up and ready to go to start deploying this broadband, but our partners in the federal government have been going very, very slowly. We hope that we’re going to be able to begin to dig the trenches, pull the fiber and get the broadband out. It’s an extremely important necessity for communities, and we believe that particularly fiber broadband, the kind of broadband that many of our members at U.S. Telecom provide is the kind of quality, scalability and fast option that Americans really need in order to become part of our innovation economy of the future.

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Terry Gerton What are the biggest hurdles that you’re facing from the government? Is it regulation? Is it permitting? Is it some part of all of that?

Jonathan Spalter Well, it’s been simply, I think, an over-emphasis on process rather than outcomes. The previous administration, rather than really revving up the engines and moving quickly to get the dollars out to the states obligated and into the communities that needed it most, decided to layer on to the program that Congress authorized all kinds of requirements and rules and policy Christmas ornaments that really had nothing to do with the core purpose of getting broadband out where it’s needed most. The good news is that I think we are now in a situation where, working closely with Congress and with the Commerce Department, we are on the verge of being able to crack through a lot of those impediments and get going. We’ve been urging the Commerce Department to not delay any further. Look, it’s almost the middle of summer. We have a very small build window in many states where if it’s too cold, or snow cover or ice make it more difficult to get the broadband where it needs to go. So speed is of the essence and we’re really pushing the Commerce Department — and it’s not just us, it’s states around the country, Republican and Democrat — to giddy up and stop the woe.

Terry Gerton So is Commerce listening, are they making those kinds of changes that you’re suggesting?

Jonathan Spalter They have been. There have been really important efforts to strip some of these, as I said, Christmas ornaments from the tree, put them in a box, and stick them back up in the attic so that we can unencumber states in all kinds of rules that were completely unrelated to the core program. The Commerce Department has, however, added more time to our hopes of getting the broadband out. Recently, the Commerce Department added a new requirement that we’re going to essentially have to start from scratch in our bidding process, adding what could be an additional six months, at the very least, to getting the money out and the houses and communities and enterprises that need the broadband to begin to get it. So we’ve been patient, but we are ready to go. The states want to have the flexibility to determine. What would be the best mix of technologies to be able to bring to their citizens. And we’re hoping that Washington will listen, that it will allow the expertise of our state broadband offices, our state governors, to make the real decisions about how to allocate the dollars, but also the broadband options to their states, rather than our friends in the bureaucracies.

Terry Gerton I’m speaking with Jonathan Spalter. He’s president and CEO of the trade group, U.S. Telecom. Well, even if all of those things happen, it sounds like you’re still six to eight months, maybe a year away from the green flag to go.

Jonathan Spalter Yes, that is about right. We are right now, all of the states have been tasked with rebidding the proposals. It’s a big process. That’s a huge Gordian knot that you have to cut through. We’ve been working with the state offices, with the Commerce Department and with Congress to help expedite that process, to make it as seamless as possible. But part of the problem, Terry, is that the Commerce Department has advised states that it also has to rethink. What kind of broadband choices it needs to make. We’ve been advocating that what needs to get to the communities is the kind of broadband that they need and want most. And everybody understands that it’s fiber broadband that is the critical input to our ability to do things like remote learning, remote health care, being able to allow rural communities to become part of our advanced manufacturing future, to become part of our AI future. We need to have other types of technologies, like fixed wireless, satellite, but we can’t say to our rural citizens that Washington will decide for them what would be the best technology option, and we also think that it’s not always the best choice to say it has to be the cheapest option. Cheap is a very fungible word. Over time, we know that fiber is the most cost-effective option because it lasts longest. The life cycle for fiber is 30 years for something like satellite, you have to replace those satellites every five to seven years. So we need to be rational, we need to have a common sense approach, and we need to move aggressively in getting the right kind of broadband options to ensure that we will be able to be globally competitive and all connected. The good news is, this week, the Commerce Department sent out new guidance. In fact, just yesterday, where it said it’s going to be now important for fiber options to actually have pride of place in the program. We’re conveying that to all of the states and we’re ready to go. We’re ready to actually get much needed broadband to the last Americans that still don’t have it.

Terry Gerton That last tactical mile, as we used to say, is always the hardest part to finally deliver.

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Jonathan Spalter Absolutely, it’s exactly right.

Terry Gerton So as you’re thinking about the BEAD program, and you mentioned $42 billion for it, there’s another funding source that I know you’re trying to integrate here, and that’s the Universal Service Fund. Could you explain to us how those two pieces work together to deliver this kind of comprehensive broadband solution?

Jonathan Spalter The Universal Service Fund was a national commitment that we made as a nation a generation ago to ensure that nobody in America will be left behind when it comes to our being able to have basic communications. At the time, it was the telephone, voice service. Well, now the Universal Service fund also supports next generation communications technology like broadband. Working together, the BEAD program, which will allow providers to build new networks into communities that don’t yet have it, will be wonderfully supported by a vibrant and secure and future-proofed Universal Service Fund, the dollars for which are used principally to maintain and manage the networks that have already been built. So those two programs really do work synergistically together. But the tough news is that the Universal Service Fund has been under assault. There have been some folks who have sued to call the Universal Service Fund somehow unconstitutional, even though this has been a critical national program, bipartisan-supported program, for 30 years. In fact, this week, the Supreme Court is going to make a decision on the constitutionality of the program. U.S. Telecom has been party to that Supreme Court process. Our fingers are crossed that the justices will make the right decision to uphold its constitutionality. And then we’re going to go to Congress and the administration to work together to make sure that we can have a future-ready USF program that will be reformed, that will actually invite more parts of the technology ecosystem who benefit from the Universal Service Fund to be contributors to the program and to make sure that we can streamline it and get it ship-shape for our broadband future.

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