ACA Connects' Spellmeyer: Industry 'Optimistic' About Next FCC Administration

What is the next FCC administration going to look like for your members compared with the past four years?

This is going to look pretty good. We are certainly positive and optimistic about what the future holds for the FCC and, more broadly, in Congress and Washington, D.C. I have got 530 members scattered across all 50 states, they pass about 32 million households between them, and there's a lot of high-speed broadband deployed, but there's more to do, and we think that this next two years will bring a more-reasoned, pro-deregulatory environment. That's good for them.

My members had a good four years during [President Joe] Biden['s] administration, and we've gotten through a pandemic and continue to deploy networks, but there's more work to be done, and it can be done faster if we can clear some of the unnecessary regulation out of the way. Every dollar that gets invested in regulatory compliance is $1 that isn't left over to put in the ground, and I'm pretty optimistic that the Carr FCC will set the right tone, both in terms of rolling back whatever the courts don't roll back themselves, and having an outlook that’s focused on encouraging deployment.

That [deployment focus] starts with siting issues, although I see that probably first and foremost being a congressional priority. You're going to see us active in the next Congress, trying to push things like the legislation that was authored by [Georgia Republican Rep.] Buddy Carter [the American Broadband Deployment Act (HR-3557)]. It's a good piece of legislation. I expect that they'll relook at it and maybe make tweaks coming into the next Congress, but that's what we're going to be [pushing] first out of the gate.

What are your FCC priorities?

We would like to see the FCC roll back some of the broadband label provisions [dealing with record retention] that were put in place. The whole thing was an exercise, although well-intentioned, that kind of created nothing but a big bureaucracy, and I'm not at all convinced it has lessened consumer confusion over what's being offered.

Fundamentally, it's a pretty competitive marketplace; many of my members started as incumbent cable providers, and in most of those places, there's an incumbent telco that's in place as well that they compete against. There are also fiber overbuilders that are coming into places. There are fixed wireless alternatives, and there's [SpaceX’s] Starlink. All of those ... yield consumers plenty of choices in most places.

Some of the things related to all-in pricing we were dissatisfied with. [FCC Chairwoman Jessica Rosenworcel’s administration] had teed up a number of onerous provisions that, I hope, fall to the wayside, things like bulk billing, retransmission blackout [rebates], [and] early termination fee [rebates]. It sounds like we'll have nothing to do, but making sure that those things get properly cleaned up and things like tower sightings get executed correctly is going to keep us busy.

There's obviously also the BEAD program and where that's going to go. There's a little cloud of uncertainty as to exactly how that will play out. There clearly are players in Washington that would like to see the BEAD program changed in a number of different ways, be it who's eligible and what the state requirements are, to people who would probably shelve the program altogether. It's not clear to me who's going to win that fight and how serious that fight is going to be and whether places like Texas and Alaska and South Dakota are really willing to shut the program down. Time will tell, but we'll get a little bit of a clue once we see who is going to run the NTIA.

Given the sort of staggered way this is working, with some states being much further along than others in the process, I wonder if changes sometime in 2025 would be problematic for members because of the uncertainty.

Yeah, there's probably a hesitancy to rush headlong into bidding right now, with being uncertain whether that will actually come to fruition. If you're in Texas, you have more time to wait and figure out what Texas is going to be, and Louisiana has already conducted their [bidding] process. So, it's a little bit of luck as to where you fall in the queue, and who your governor is, and how aggressive NTIA is going to be, and then whether the Congress somehow decides to just shut the whole thing down.

What do you expect to see that would affect ACA members from the White House?

I think the White House will have an impact, one way or another, on a lot of things that my members care about. Tax reform -- I expect the Trump White House and the Republicans controlling the House and Senate will work together pretty closely to move things like tax reform.

And there will be opportunities to impact the corporate tax rate and things like depreciation schedules for capital deployment. We will be paying careful attention to what goes on there. Taxability of broadband grant programs is another issue that we've been supportive, along with a number of other trade associations, in trying to fix.

Obviously, [it was] a good decision to designate Brandon Carr [as] the chair. I think he's the most qualified incoming FCC chair in a long time, certainly in my tenure in Washington. He's got a lot of experience ... and I think he's got a green light from the White House to do what he sees fit.

There's merger oversight stuff, and there's media consolidation issues that we're concerned about, that I know the incoming president is interested in, and so we'll see how that plays.

A year from now, how many more companies will have gone the route of being a YouTube TV supplier rather than a video service provider?

The trend will continue. There is a long tail still on the cable television market, but the trend continues. I don't know that any of my members would [say] that they find it profitable. They find it break-even. Break-evenable, maybe. Still, there's enough customer demand to justify hanging on to it. But the cable market is changing.

I'd like to fix retransmission consent before it no longer matters to anybody. And you'll see us talk a little bit about that issue, but I don't expect Congress to dive headlong into retransmission consent legislation in the first quarter of 2025. But, I think, at some point Washington is going to find it in everybody's best interest to go back and look at some of that stuff. Maybe it's in conjunction with media consolidation, media ownership legislation. But it remains a problem.

Are we going to see notably more numbers of your members getting into mobile through mobile virtual network operator agreements?

Certainly. I know that some of my larger members have done it directly [through the National Content & Technology Cooperative], which has stood up an MVNO product. It’s been a little slow out of the gate, but I think you’re going to see that trend continue. There’s enough customer demand for a bundled product that it makes sense to keep it out there.

Major cable ISPs, like Comcast and Charter Communications, talk about heavy competition from fiber overbuilders and fixed wireless. Is it the same for your members?

The more rural you get, the less likely you are to see a large fiber overbuilder arrive. But there are exceptions to that, and certainly I have members who have been overbuilt in some parts of their service territory by fiber. And I have some members that have turned around, done the opposite and overbuilt other people using fiber. Fixed wireless is a product that is showing up probably more than fiber overbuilders are. The issues related to price and capacity and long-term viability remain, but it's there.

And some people get [broadband] from mobile, and some people get it from Starlink. I expect to see more of Starlink, not less of Starlink, but I don't think they can absorb the entirety of today's broadband networks. I've had members tell me that ... as soon as they turn up fiber to a neighborhood, they've actually had a campaign where people are turning in their Starlink equipment back to them.

I'm curious: For a trade organization, what do you do in lame-duck periods? Is there much lobbying at the FCC? Does everybody just wait until after the inauguration?

This month is kind of quiet at the FCC. I don’t think we have been doing a lot of ex parte meetings. I have not been to the Hill since probably September. I've talked to a number of members of Congress, but it's pretty much been out in America. We're all focused on what's coming -- the implications of universal service reform and the Supreme Court taking the Fifth Circuit [USF] case -- and we'll be engaged. But it's a nice time to rest.