Building America: Challenges In Wireline Broadband Deployment
Most people do not spend much time thinking about the wires and cables that run under or along the streets and public rights-of-way where we walk, drive our cars, and ride our bikes every day. But these rights-of-way are critical to the delivery of our broadband, video, and telecommunications services. Ensuring providers can deploy facilities to reach our homes and businesses is essential to our everyday lives and to achieving the goal of giving every American access to broadband service. I recently had a chance to lead a CLE exploring these issues and offer the following points to think about—whether you are in the business or simply curious about what is going on.
Federal and state funding initiatives are driving massive deployment efforts.
The goal of making broadband available to all Americans has bipartisan support and long predates the COVID-19 pandemic. But with the pandemic highlighting the difficulty for those without a broadband connection to work or attend school and supercharged efforts to close the gap. Congress and the FCC have made more than $70 billion in funds available this decade to address buildout to rural areas through the American Rescue Plan Act (ARPA), the Rural Digital Opportunity Fund (RDOF), and the Broadband Equity, Access, and Deployment (BEAD) program. Many states have kicked in, too, with their own grant programs.
Most broadband providers need access to public rights-of-way.
While it is possible to beam broadband service from space, most broadband service is still provided through facilities placed over or under public rights-of-way. Broadband providers include companies that started as telephone and cable providers, who have always put their facilities in the rights of way, but also include new players who are actively installing new fiber optic cable primarily—or entirely dedicated to—broadband use. Even wireless providers, who do not need to run wires to connect to the customers they serve, increasingly rely on “small cell” facilities placed in the rights of way. And those small cell facilities in turn connect to the providers’ distribution facilities by cables that are also in the right-of-way.
Placing facilities in the rights-of-way requires local government approval.
Depending upon the types of services a provider offers, the provider may or may not need to obtain Federal Communications Commission (FCC) and/or state approval to operate. But once a provider receives that approval, it still cannot serve anyone. Building networks often requires two types of authority: (1) a general grant of authority, often called a “franchise,” authorizing use of rights-of-way to offer service, and (2) a specific authorization, typically called a “permit,” to deploy facilities in particular places.
In some states, a state agency grants the franchise right and the provider does not need to obtain further local approval to offer service. In other states, providers must get franchises from each local government where they intend to provide service. Regardless, all providers must get permits authorizing them to build particular projects and deploy facilities in particular areas. Cities, towns, and counties (or village, townships, boroughs, etc., depending upon how the state allows local governments to organize) grant these permits.
The rules around what local governments can require vary based on the service or services the provider offers.
Although cable, telecommunications, and broadband services all travel over the same types of wires and occupy approximately the same amount of space in the rights-of-way, the rules governing what local governments can and cannot require of a given provider varies significantly depending upon which service(s) the provider offers.
For example, local governments can recover significant fees from cable service providers—up to 5% of their gross revenue on cable service—but cannot recover any fees from the cable provider’s non-cable services. Local governments may also impose customer service standards on cable providers and regulate some aspects of their cable service offerings.
For telecommunications service, on the other hand, federal law allows local governments to manage the rights-of-way and recover “reasonable compensation” for their use but cannot impose requirements that “may prohibit or have the effect of prohibiting” provision of telecommunications service. Local governments can, however, require telecommunication providers to obtain a separate authorization to provide cable service.
And for those providing only broadband service over their networks, local governments cannot regulate any aspect of the service itself, but the rules concerning buildout of facilities--meaning franchise and permitting requirements--can apply. State law varies significantly in this space, with some states broadly preempting local authority over broadband service and others providing no clear rules at all.
The disparate legal framework has created issues between providers and local governments that are delaying broadband deployment.
The most obvious, but certainly not the only, friction point created by the current legal and regulatory environment is fees. Public rights-of-way, like other public spaces such as parks, belong to the public. Local governments hold the rights-of-way in trust for the benefit of the public. No one disputes that local governments should be permitted to recover their costs in performing this managerial role. But some local governments seek to maximize the revenue generated from providers’ use of the rights-of-way, resulting in fee structures that can render projects infeasible. Some local governments have adopted a percentage-based fee on telecommunications and broadband services, similar to the fee on cable service. Other governments have imposed significant per foot fees, charging providers for the distance of facilities in the right-of-way. Both models raise questions as to whether the amount paid by providers has any relation to the cost to the local government of managing the rights-of-way.
In addition, while federal law does explicitly allow local governments to charge a percentage-based fee on gross revenues to cable service providers, as consumers shift away from traditional cable service packages this source of revenue is diminishing. This led some local governments to seek fees on non-cable services. The FCC adopted a rule in 2019, based on language in federal statute, which preempted this practice, and this rule was upheld by the United States Court of Appeals for the Sixth Circuit.
But disputes over fees are not the only source of issues between providers and local governments. Delays in processing permits, whether due to inadequate manpower or more nefarious reasons, such as holding consideration of all permits in abeyance to allow time for local governments to explore building their own broadband networks, have slowed broadband deployment efforts. Some local governments have sought to condition approval to build facilities upon providers agreeing to offer in-kind services, such as free broadband to municipal buildings, free conduit, or free dark fiber. And municipally owned utilities can control access to the utility poles and conduit they own, often with significantly less oversight than on poles owned by investor-owned utilities.
Congress, federal regulators, and even some states are considering reforms to address these deployment issues.
In December 2025, the House Energy and Commerce Committee voted to recommend passage of several bills addressing rights-of-way issues, including the American Broadband Deployment Act of 2025 (ABDA). If passed, ABDA would impose shot clocks on local government’s consideration franchise and permit applications and impose limits on imposition of non-cost-based fees by local governments. And while ABDA passed purely on party lines, Committee support for other bills proposing more narrow reforms was unanimous.
Simultaneously, the FCC commenced a proceeding in 2025 to consider whether to adopt rules clarifying that fees for deployment of wireline telecommunications facilities must be cost-based and establishing shot clocks for consideration of both franchising and permitting requests, among other things. Local governments have already made clear they will challenge any FCC reforms in this area.
States are also considering reforms around forced relocations, pole management, and broadband access rights. Getting into the weeds of these proposals might be a topic for a future article!
Why does any of this matter to me if I am not a broadband provider?
Delays and excessive fees impact anyone who is a consumer of broadband services, as higher deployment costs result in higher rates. But it is not just consumer advocates or policy wonks who should take interest in these issues. For example, with considerable transaction activity expected as broadband buildout efforts mature, investors looking to acquire the assets of network providers will need to ensure they understand what authority a provider has to deploy its facilities and what issues that may create. Regardless of how you arrived at this issue, the next time you are walking down the street and see wires running overhead, at least you know that some of us are paying a lot attention to what is happening in that space.
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