As the Republican Party prepares to sweep into Washington early next year, two of the most prominent leaders set to impact communications infrastructure are incoming FCC Chair Brendan Carr and the presumptive chair of the Senate Commerce Committee, Ted Cruz (R-TX). These two oppose one another on what promises to be one of the biggest issues in telecom during 2025: the beleaguered Universal Service Fund (USF), through which the FCC collects money from consumers based on their use of voice services. The agency uses the funds to subsidize high-cost rural internet, Lifeline, E-Rate and rural healthcare.
Senator Cruz wants to replace the USF with Congressional appropriations, although he has published a paper stating that “it may make sense to keep the High-Cost program within the current USF funding framework given ongoing multiyear commitments to providers.”
Commissioner Carr wants to keep the USF at the FCC, and force tech giants like Google (NASDAQ: GOOG) and Amazon (NASDAQ: AMZN) to contribute to it. Not surprisingly, those companies are supporting advocates of congressional control.
Meanwhile, as Inside Towers has reported, the Supreme Court is set to rule on the constitutionality of the USF. A decision is expected as soon as summer 2025, assuming Cruz does not wrest control of the fund from the FCC before then.
The USF has pitted Carr and Cruz against one another, and any compromise between them could ultimately involve more funding for a technology both men champion: Starlink. Both Carr and Cruz have advocated for the use of Starlink as an alternative to fiber broadband.
Late last year, Carr spoke about Starlink on the podcast This Week in Startups. “As a matter of first principles, what’s the most efficient thing for the government to do to bridge the digital divide? One argument is just cut everybody a coupon for $600 which is effectively the price of a Starlink dish, mail that coupon to everybody and call it a day,” said Carr. He lamented the fact that fiber is currently set to win most of the Broadband, Equity Access and Deployment (BEAD) grants, and said fiber broadband takes longer to deploy and costs more than Starlink. But Carr also noted that fiber is generally a better fronthaul/backhaul option for cell towers than satellite.
Cruz has also complained about “the Biden administration’s extreme fiber bias,” saying it will “invariably lead to overspending and diminished competition at the expense of unserved communities.” Cruz recently authored a paper called The Red Report, calling for the suspension of waste, fraud and abuse in broadband funding. Like Carr, he highlighted the affordability of Starlink, noting that a New Mexico school district had deployed the service for $500/location, while two fiber providers in the state were together spending about $26 million to cover 135 households.
Cruz and Carr both argue that satellite service is faster and cheaper to deploy than fiber on a per household basis, and similar arguments can be made for fixed wireless access (FWA). While satellites in general, and Starlink in particular, seem to be a focus for both these Republican leaders, the policy changes they support are likely to favor FWA as well, by expanding the definition of broadband services that can be eligible for subsidized deployment.
By Martha DeGrasse, Inside Towers Contributing Analyst
This article represents the opinions of veteran telecom industry editor and journalist Martha DeGrasse, an Inside Towers Contributing Analyst with features appearing monthly. DeGrasse owns Network Builder Reports and contributes regularly to several publications. She was formerly a writer and editor with RCR Wireless and a TV business news producer.
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