States Weigh Federal Relationship in a Trump 2nd Act

“There is a very real possibility that we are looking at an Act 2” of the Trump administration, former Nebraska PSC Commissioner Crystal Rhoades said, referring to a possible Trump victory. A Democrat, Rhoades was vice chair of the NARUC Telecom Committee during the Trump administration. People should take seriously the former U.S. president’s comments about political retribution, she added. “For whatever people think of Trump, he has done what he said he was going to do.”

If Trump tries dismantling the administrative state, some states, such as California, could try filling the regulatory void, said Ray Gifford, a Republican and former chair of the Colorado Public Utilities Commission. “It’ll be complete trench warfare [and] hand-to-hand combat,” and a return to 2016 when certain states took up “the mantle of resistance.”

Brandon Presley understands “the practical side of politics,” said the Democrat who was NARUC president during the Trump administration from November 2019 to November 2020. Presley left the Mississippi PSC to run for governor but lost the 2023 election to Gov. Tate Reeves (R) by 3.2 percentage points. “If you’re not a member of the party in power in the White House, [as NARUC president] you’ve got to make sure states’ issues are heard.” At NARUC, Presley appointed a Republican state commissioner, Louisiana PSC Commissioner Eric Skrmetta, as the association’s White House liaison. It helped communication, he said. Also, Presley said he formed an “unlikely couple” with Republican then-FCC Chairman Ajit Pai to reduce prison call rates. “I purposely sought out ways to work across the aisle to do things that were smart for consumers and made sense for industry.”

But state-federal relations could always improve, Presley said. When Trump was president “there was never any real meaningful dialogue on [USF] contribution reform” on the Federal-State Joint Board on Universal Service, he said. The FCC never even called a joint board meeting, Presley noted. “You can’t ignore states and have a successful telecommunications policy federally.” State commissioners are “on the ground … fielding the complaints.”

USF joint board engagement hasn't increased meaningfully under President Joe Biden, said South Dakota PUC Commissioner Chris Nelson (R), who has been the joint board’s state chair for about a decade. The last time the USF joint board “actually function[ed]” was under former President Barack Obama (D), he said. “We had correspondence with our federal colleagues, and we actually worked together.” Nelson said he hopes that will return during the next presidential administration.

States' relationship with FCC commissioners was about the same under Trump and Biden, said Nelson: The commissioners "are willing to listen, and we’re able to work with them.” States saw much greater contrast between Trump and Biden administrations on energy issues, which utility commissions also oversee, said Nelson: Trump let states run the electric grid as they saw fit, while Biden intruded into state jurisdiction.

“There weren’t strong open lines of communication” between states and the Trump administration, said Rhoades, who was vice chair of NARUC’s Telecom Committee and a member of its broadband task force. Rhoades now is Douglas County Clerk of the District Court in Nebraska. It was better when Obama was president, said the Democrat, noting that two FCC commissioners joined a NARUC panel she moderated in 2015. “You routinely saw engagement from the FCC” through meetings and other communications, she said. However, that “tapered off” under Trump amid uncertainty about FCC appointments, Rhoades said. “Nobody knew who to talk to.” Rhoades blamed a “philosophy of the Trump administration that the government is inherently ineffective … and so why bother stacking these agencies?”

The concept of "cooperative federalism" in telecom has become more of a “convenient cudgel or defense, depending on your point of view of what the given administration is up to,” said Gifford, now a communications attorney with Wilkinson Barker. The term, which refers to cooperation between state and federal governments, isn’t “used with much sincerity,” he said. Due to thorough preemption, telecom has become the “appendix of state regulation,” a “vestigial organ that just doesn’t have that much to do,” added Gifford: He doesn’t see that changing even though the FCC made “slight nods” to state authority in its recent net neutrality order.

BEAD Changes Possible

States’ top priority is getting people connected to high-speed internet, and that will continue in 2025, Benton's Sohn said. The former FCC nominee fears how NTIA's BEAD program would fare under a Trump administration.“There’s not going to be any money given out until 2025, and what I worry about is that there may be some change” or “even a rollback in the distribution of the money.”

Federal attempts at clawing back BEAD funds could spur “a revolution both from red and blue states,” but rule changes don’t seem impossible given complaints about the program from key Trump supporters like Elon Musk and FCC Commissioner Brendan Carr, Sohn said. There are complaints that Biden’s NTIA is too heavy-handed overseeing states in the BEAD program, Sohn noted, adding she expects a Trump administration would take a lighter touch on issues. For example, who states select for awards and how they use non-deployment funds and monitor network construction progress. However, Sohn doesn’t expect a revival of Republicans’ Rural Digital Opportunity Fund funding model because lawmakers from both parties have condemned RDOF.

“To the extent that there’s always retribution on the mind of Donald Trump” and that “feeds into his agency heads and his executive branch people,” blue states probably should be concerned about a second Trump administration, Sohn added. Still, tinkering with BEAD in blue states but not red is “a lawsuit waiting to happen,” she said. Plus, red states like Texas ($3.3 billion) and Missouri ($1.74 billion) received some of the biggest BEAD allocations, she said. “This is all with the caveat that we're talking about the most unpredictable president in our lifetime.”

Nelson flagged problems with Trump and Biden expanding broadband. RDOF initially awarded some companies that were unfit -- but at least the program empowered states to use their eligible telecom carrier (ETC) designation authority to find those problems, Nelson said. The South Dakota PUC used its ETC powers to block RDOF support to LTD Broadband (see 2210110054). With BEAD, states assumed award responsibilities under Biden, but the program is slow-moving, Nelson said: And “it really remains to be seen how many businesses are going to be willing to actually pursue the BEAD dollars given all the strings that are attached.” Whether a second Trump administration would address those issues is unclear, he added.

The next administration shouldn’t change BEAD rules while billions of dollars in broadband funding flow across the country, Presley argued: Industry and consumers expect “predictability in the regulatory environment.” Rhoades praised Washington's current approach under BEAD of letting states decide where to send federal broadband dollars, while holding them accountable for those decisions. “I hope that doesn’t change.”

Meanwhile, Rhoades sees no "hope” for funding the expired affordable connectivity program (ACP) under Trump because it is a partisan issue. The former commissioner sponsored several NARUC resolutions on low-income support. Sohn predicted that states would take up the cause. They could try making service affordable through creating their own digital equity funds, requiring that ISPs offer low-cost options or by copying New York state’s law that sets price caps for certain speeds, she said.

Rhoades credited the Trump administration for efforts at replacing network equipment that foreign adversaries manufactured and investing in broadband deployment and adoption during the COVID-19 pandemic. “They got serious about rip and replace, which was incredibly important to the integrity of our infrastructure,” and something that states don’t have the money to do on their own, she said.

But the U.S. Supreme Court's reversal of Chevron was "one of the worst things that could happen to the integrity of our infrastructure," the Nebraska Democrat said. “These are complex issues that are not well understood” and “losing that regulatory expertise is catastrophic.” A state-by-state regulatory patchwork for infrastructure won’t work, Rhoades argued. “Having that strong federal oversight -- especially because that is where the lion’s share of the funding is coming from -- is critically important.”