Ask Me Anything! with Ajit Pai, Partner at Searchlight Capital

Jase Wison: Hello everybody.

Crowd: Hello.

Jase: How's the food? 

Crowd: Great.

Jase: Can we get a quick round of applause and appreciation for Ajit Pai here? 

Ajit Pai: Oh, no.

Jase: Please. He's a busy dude.

Ajit: No. You haven't heard what I'm gonna say yet, so I appreciate the...

Jase: Maybe withhold them, we'll pause until the end of the fireside Ask Me Anything with Ajit. But it is a real honor to get to hang out with Ajit for a little bit. He's a busy dude. He's done a lot of things in his career. He's gonna do a lot more, but we're among some of Broadband's best and brightest and we're at a really interesting time in the nation's history, and there's a lot that you have to share, Ajit. So, we'd love to get in. We could start with a quick introduction from you of you. Do you know you? You know you.

Crowd: That sounds like a very metaphysical question but, hey everybody, Ajit Pai. I know some of you to those of you who I haven't had the pleasure of meeting I hope to correct that in short order. I used to work at the FCC in a variety of capacities and now I'm a partner at Searchlight Capital, a firm based in New York but I'm based in the Washington DC metropolitan area where I invest in among other things, all kinds of tech telecom and media companies. And I really wanna appreciate first and foremost Jase and the Ready team for extending the invitation. Really great to see so many Broadband leaders in one place. Secondly, I wanna thank you for hosting this in New Orleans. It's almost surreal being here. My professional career started literally around the corner as a federal law clerk at the courthouse on that camp in Poydras, so this is a very familiar place to me. The first meal I had was at the corner at Mother's where I had a Debris po'boy. And the first wedding I ever crashed was in this hotel in this very room where after a few too many hurricanes, some buddies of mine decided, Hey let's just go see what's happening at the Windsor Court Hotel where...

Jase: Hurricanes are the weather pattern or the drink? 

Crowd: The libation, and so anyway. Now I'm here on a more formal yet routine capacity. So, it's great to be back. And also just a salute to all of those of you who are working at the state level in whatever capacity, governmental, non-governmental, to make these Broadband programs work. I know firsthand how challenging it is to take all of the puts and takes of a complex statutory scheme and implement it. And so, I wanna thank you for your public service. I was mentioning to somebody last night, this is truly a generational opportunity and when your work is done, the beneficiaries of your work may not know your names, but they're gonna be forever grateful that you're helping to close once and for all this digital divide. So, hats off to you for doing the hard work to get the job done.

Jase: That's well said Ajit. Can we get a quick round of applause for the state folks, state directors, state officers. They do have one of the most important and least thanked jobs in all of Broadband. So, appreciate you, appreciate it again. So, we'd love to jump into this stuff. I would love to start, Ajit, with the fact that you did a hell of a lot of stuff, 2017, 2021, a long list. Repeal net neutrality.

Ajit: Internet is still here.

Jase: It's still alive, it's still here. It still has great memes. You also, you were appointed by Obama and then you went through the Trump administration.

Ajit: Somewhat different administrations.

Jase: That was a bit of a change, right? 

Ajit: Yeah.

Jase: Okay. And you're still alive, and you're looking good.

Ajit: Well, thank you.

Jase: So, what advice do you have? How was that first and foremost, and then what advice do you have for people that are looking ahead to this next January 20th change of things? 

Ajit: Good question. Well, coffee always helps as you might know. I've always actually had a cup.

Jase: That's not a sorta hurricane? 

Ajit: Yeah. It's a somewhat smaller receptacle than I'm used to but I'm making do as best I can. But no. I think some things are obviously gonna change from administration to administration but I think some things are gonna continue. And I think Broadband honestly might be one of the few things that Americans agree on. There's a bipartisan recognition especially coming out of COVID, that Broadband is no longer a nice to have. It's really a must have, and not just for residential Broadband which of course all of you're charged with addressing, but even on the enterprise side too. When I talk to farmers and ranchers back home in the great state, one might say the greatest state of Kansas.

Crowd: Whoo! 

Jase: Whoa! Well, hold on.

Ajit: That's one of the things I hear is that, "I really need Broadband to enhance the productivity when I farm." Or when I talk to rural healthcare providers, my own parents were physicians in a rural county hospital for over 40 years, one of the things holding them back is a lack of telehealth and telemedicine and being able to reach patients who aren't able to take time off to travel for a job. Or even enterprises, small entrepreneurs who might be in places like Vermillion, South Dakota, where Broadband is enabling them to reach a worldwide audience. And these are the types of things that really help integrate every single American into, not just the digital economy but the digital society. And so, I truly think that Broadband is one of the things that, even though there are gonna be programmatic changes incrementally going forward, I do think the core promise of Broadband is something that every single elected official, Republican or Democrat, is going to embrace.

Jase: Well said. We'll dig into a couple of quick things that you did. One of the things you did while you were there, you authorized that...

Ajit: If you actually looked up my tweets, this is dangerous.

Jase: Well, you authorized an unknown startup that's building a crazy idea of low earth orbit satellite system space-wise SpaceX. SpaceX. It was SpaceX. And so, what was that like at the time? And then, how's that going now? 

Ajit: I think it's going great. It's interesting you mentioned net neutrality. One of the criticisms at the time was, well, how can you repeal these regulations and restore The Title 1 Framework when there isn't sufficient competition in the Broadband marketplace? And that's a fair argument. You're looking, there needs to be competitive choice. And so one of the things we try to do in concert with that is to promote much more competition and innovation in the Broadband sector. And at the time, back in 2017, it was thought that, okay, Broadband means terrestrial, maybe a little bit of fixed wireless but really it's just a wire, either HFC or fibre going to a location. We thought, well, there are all these innovative entrepreneurs in space that are doing all this great work. Let's authorize them, all these low earth orbit constellations, not the old GSOs that are providing a very high latency low bandwidth services but very low latency high bandwidth services.

Ajit: And we don't know if it's going to work, creating this mesh network in space. We don't know how the orbital slots are gonna play out or what spectrum assets they're going to leverage, but we do know that it's almost like a field of dreams. If you build it, they will come. If you allow these companies to innovate and innovate in the United States, critically, they will come. And so now of course it's a lot of talk about Starlink. Back in 2017, 2018, people were asking me, including some critics within the agency, why are you authorizing all of these LEOs? I mean, a bulk of them are gonna fail. We don't know what they're going to do. Doesn't even work. And that's the point of that tweet which I've just issued. But back then I was arguing, "That's the point," is that we need to allow people to innovate and see what great ideas rise to the top.

Ajit: And now, it is hard to remember, but not long ago you were going head in hand to the Russians and begging for launch capacity. Now we have US-based launch that is superior to anything else in the world. Not long ago it was thought that US-based satellite Broadband was just something that was a corner case for maybe IoT applications narrowband. Now we're seeing Starlink provide service at the price point and speed that is comparable in many cases. And as you heard from John, the terrific presentation to begin the day from all the Louisiana folks, it is really important use case for those high cost areas that are otherwise gonna be impossible to serve with fibre. So, I'm proud of the work the FCC did. I mean, I don't claim the credit for that. It's our FCC career staff that really helped do the hard work to authorize those LEOs. And I hope the consumers benefit in the time to come.

Jase: Yeah. Well, thank you for your leadership and supporting American innovation, because they seem to be doing pretty decent at what they're doing.

Ajit: Yeah. Definitely.

Jase: I got other questions. You were a major proponent of making sure that rural connectivity is improved for America and you launched among other things the Rural Digital Opportunity Fund. So, can we talk a little bit about what you see is, what is it now? And if you were starting over again what would you be doing right now? 

Ajit: I was just talking to John about this. John Hutt and I worked together at the FCC back when he was at the agency during my predecessor's time. And we find now, it is interesting because in many ways, as John outlined very thoughtfully, there's some good parts of RDOF concepts that I think served and are serving consumers very well. There as been the general reverse auction framework for example, giving a little bit more flexibility. There were certainly things I would change, I mean, needless to say. I think a lot of the shortcomings have been talked about a lot. But in terms of some of the bidders that were participating, some for example that were essentially trying to bite off more than they could chew, essentially a bid that outpaced their track record.

Jase: That happened? 

Ajit: That was a big problem.

Jase: You had some of those? 

Ajit: No question about it. And similarly, one of the other problems that had larger strategic bidders that were essentially engaging opportunistic behaviour bidding down such that either they would default and there wouldn't be enough of a penalty for them to pay, so there was essentially blocking competition, or they would take it and be guaranteed that nobody would ever overbuild them. And so, those are the kinds of things that we would change. Additionally, and in my defence I suppose, we didn't know when we were setting up this programme in 2018 that, hey, by the way two years from now three years from now Congress is gonna authorize a 42 billion fund in addition to other major vehicles like CPF to help solve this problem. Had we known that, because we had thought at the time when I did the event at the White House announcing this, we just assumed the only funding we can establish is gonna be essentially a 10-year 2 billion per year annuity.

Ajit: And so when you're thinking about the funding in those terms, you structure it very very differently. So, I commend the folks like John and Louisiana, Connect la, who structured things mindful of the lessons that we learned because I think this is iterative, and I think they've really done a good job. And in other states too, we've worked with Dr. Holmes, I don't know if Dr... Oh, and Dr. H is still here in Virginia, just trying to apply some of the lessons that we've learned in a way that's gonna be very thoughtful for those states. So, I would do things tremendously differently, but there were some good things that are happening, over 650 I think it's thousand consumers who have Broadband today that didn't prior to RDOF because of the programme.

Jase: You oversaw billions of dollars flowing out to providers to get folks connected. And the state directors in the room was collectively over 25 billion worth of BEAD represented. And there's a new administration coming into the office. Did you see the election earlier this month? 

Ajit: Was there one? 

Jase: Yeah, there was. Primary.

Ajit: Oh okay. Okay.

Jase: And so, in January 20th they're gonna be under new management in the United States of America and they have a mandate. They view themselves as having a mandate from the people and the mandate includes government efficiency. And there have been recently discussions of what to do with BEAD. And folks that have been working for the last three years would like to make the case to the incoming administration that the incoming administration can get done in three months what the prior administration invested three years into doing. And we'd love to hear your advice for folks thinking about how to look ahead to this big change, because survived a big transition like that and you still manage to get money out the door. So, what advice do you have for the people that are in the state seats right now? 

Ajit: Well, I guess part of it is more federal programmatic in the sense that there are going to be changes to the BEAD programme I would assume. But it was very interesting to hear some of the questions and commentary during the morning sessions about frustrations with NTIA either in terms of timeliness or ambiguity. And those are the types of things. Look, just as BEAD in some ways, its implementation in various states can improve upon RDOF, I'm hopeful that the new administration can take some of the lessons we've learned over the last three years through NTIA's experience with you and improve it to make sure that you're able to do your jobs. And so, if there are things that regulatory changes or programmatic changes otherwise that can help, I think you should let them know. I think they have a very open ear to doing that. And certainly there's gonna be changes with respect to things like LEO but I don't think that's necessarily going to be a bad thing. I mean, as John was pointing out, there's a very long tail of super high cost locations to serve. And it may well be that LEOs are very well positioned to help address that especially in those states where the allocation was, in my view and I think the view of many others, suboptimal. So, maybe LEO or fixed wireless can help address that and help you stretch, address as many possible locations.

Jase: So don't delete BEAD but streamline it, accelerate it and rethink some of the big obstacles to innovators, and efficient use of resources.

Ajit: Yeah. I think so.

Jase: That's a good answer.

Ajit: Definitely. I mean, obviously I defer on, I'm a recovering lawyer not a practising lawyer. So defer on the legal particulars about amending programmes that have already been legislated and appropriated and the like. But I think programmatically we really need to think about is, at the end of the day stepping back from the politics of all, again, this is a bipartisan cause.

Jase: 100%

Ajit: I truly believe that. I saw it when I was in office that those were the times when I'd see the heads nod the most vigorously among my democratic friends was when I said, "We need to get everybody connected to the internet." That's not a Republican issue or a democratic issue, it's simply an American issue.

Jase: It's an American issue.

Ajit: Yeah.

Jase: Oh man. So, you have so much to share. You were there. You've been there.

Ajit: Well, the value of it it might be in question. Yeah.

Jase: It's quantity not quality.

Ajit: Thank you. Exactly.

Jase: It's okay. Yeah.

Ajit: I've been faking it until I make it.

Jase: Listen though, there is a really clear thinker stepping into fill the shoes that you filled in the chairman role, Brendan Carr, who's had really good perspectives on also supporting innovation. Are you advising Carr on any informal capacity? Are you talking to him and what advice do you have for him? 

Ajit: Oh, so Brendan was an advisor of mine when I was a commissioner and was the general counsel and then a commissioner himself when I was chairman. And so yeah, he's been a longstanding friend. And so, if he ever asked for advice, my phone always rings and I'm always happy to offer it. But yeah. No. I think it's a very important role at a challenging time. So I'm hopeful when it comes to issues like this he will approach it with the same care and thoughtfulness that he has on other issues past.

Jase: So, Brendan, if you're listening Mr. Varadaraj Ajit. At minimum you should also advise him on dank memes. But once upon a time you were like a dank meme lord.

Ajit: Yeah. Sadly my kids are old enough now to start researching some of the detritus from the internet circa 2017, 2018. And yeah. It was an interesting time shall we say.

Jase: You used to have game. The internet is thirsty now for his "Ajit Pai meme tweets." I don't know if anybody remembers this. Folks remember these? Some legendary. Maybe I'll have some examples later.

Ajit: Yeah. Hopefully it's safe for sharing.

Jase: Can we switch gears for just a second and talk spectrum policy and space in the context of space. And we've got orders of magnitude more satellites now than we did when you'd taken the reins and there is a large number of satellites on their way up and they're using radio. Can you talk a little bit about that, the intersection of those topics? 

Ajit: Oh definitely. And I should have mentioned that was another core part of our strategy to promote more competition in the Broadband space was just pushing a whole lot more spectrum out there. And I think it's fair to say that our agency when I was there was by far the most aggressive and successful at pushing the public airways for the benefit of the public. Unprecedented number of spectrum options that raised over 100 billion for the US Treasury, and less remarked upon but I think also very important was a 5x increase in the amount of spectrum in the mid band that was available for Wi-Fi. We allocated the entire six gigahertz band for Wi-Fi. And now you see if you go to your neighbourhood Costco you'll find Wi-Fi 7 routers that can get you gigabit throughput symmetrical, which is unbelievable. I mean, compared to where we were in 2017 when you had these 2.4 channels that were very constrained. And so, I'm really excited about what all these spectrum assets, licensed and unlicensed, mean for American consumers. And when it comes to LEOs in particular, there's always going to be a fight. As we all know, space operators want more, terrestrial providers want more, US government agencies want more, want to have what they have.

Ajit: And so, it's very difficult to balance all those interests. And that's another thing that makes this so challenging. And plus on top of that, the United States, as folks might be aware, is unique among OECD countries. And then we bifurcate spectrum authority. Commercial spectrum is within the FCC's bailiwick, governmental spectrum is within the Department of Commerce. And so, essentially you have to have the two of them meet and collaborate in order to get things done. And so during my time that was, a lot of the grey hair I have is attributable to either trying to work with or otherwise fight with the Department of Defence, FAA, NASA, NOAA, you name it. But to get more of the spectrum into the hands of American consumers which is not an amazing thing to do.

Jase: Well said. Do you remember that time we had a global pandemic? 

Ajit: Yeah. I do recall it so much.

Jase: There was a part of that where you had to do some pretty tough work. Yeah. You basically told, you showed the PRC influenced equipment makers the door. It was tough, right? 

Ajit: It was very hard. Early on in my tenure, this wasn't publicly facing so I couldn't say anything about it. But I started to be, one of the things that I had at the time was a TS/SCI clearance since you start working with your friends in the National Security and Intelligence communities. And as we started to get these briefings, it became pretty clear that there was a national security threat presented by certain equipment services and services vendors whose equipment was all over the United States. And so we started to think about, well, what should we do about this? And the first easy thing was to say, going forward we're not gonna allow any of that into our networks. All fine. I mean, I don't think anyone would disagree with that. And they designated Huawei and CT among others as insecure. The bigger problem is what do you do retrospectively? Because as we saw, a lot of these vendors had equipment in US networks already which were curiously clustered around, shall we say, places with significant military installations across the United States. And so, we're working with some of the smaller rural companies.

Ajit: It became clear they couldn't fund the removal of this equipment. The FCC couldn't have funded. I mean, our budget was minuscule compared to the need. And so we worked with Congress in a bipartisan way to establish a rip-and-replace program, which is now being funded up. But it was really important. And so, it was unfortunate during the pandemic that, of course, this program had to happen at the same time, because it just makes things a little more complicated. But I don't know. When it comes to national security, I thought it was really important to change policy in a fundamental way.

Jase: Yeah. Thanks for helping to connect and protect Americans. That was a cool move.

Ajit: Yeah. It wasn't really easy.

Jase: So, I have a much more serious question for you, Ajit. It might be too personal.

Ajit: All right.

Jase: On an annual basis, how much by weight or quantity would you say the pie household consumes of Reese's products? 

Ajit: More than you would expect.

Jase: Pounds, kilos? 

Ajit: Yeah. Well, so one of the things we established around Halloween was a tradition of parental taxation. So my kids go over the neighborhood...

Jase: Oh my God! 

Ajit: Oh, absolutely.

Jase: Really! 

Ajit: They go collect. I give them pillowcases. They go through the neighborhood, collect all their stash, and they bring it home. And I essentially confiscate all the Reese's that they have.

Jase: Keep all that you can carry, but the Reese's are mine.

Ajit: Yeah. And so it's just a way of letting them know, like, "Look, either you help me knock out this mortgage, or you hand over some of your candy stash," just to help them understand what it's going to be like when they become adults. They have to fork over some of their hard-earned money.

Jase: Getting them used to taxation too, in the process.

Ajit: I know. I know. But I would love to know at Hershey's headquarters, is there some slide about the amount of, hopelessly we gave Reese's over the years that I was in office? I don't know.

Jase: I don't know either.

Ajit: It's a fantastic product. If you ever get a chance to go to Hershey PA, highly recommended. There's an entire board talking about how they came up with the idea. It is just absolutely brilliant. Now we're innovating in space, but previously we innovated in this little container, which is delightful. Absolutely delightful.

Jase: It reminds me of the theater school quote, like, we were promised flying cars, and instead we got 144 characters. We were promised reusable rockets, which, check. We should get back to serious innovation.

Ajit: I could not agree more.

Jase: And peanut butter chocolate desserts.

Ajit: Yeah.

Jase: Yeah. So, switching gears for a second, Ajit, you were FCC chairman. Now, you're a partner at Searchlight Capital Partners, not the 1990s movie Blockbuster guys, but the top dog TMTPE guys.

Ajit: Well, you're very kind.

Jase: So, the states that, let's say we all band together and help the new incoming administration see that BEAD can be a major first 100 days victory. Let's say we succeed in that task. Then the states need to go and find really great sub grantees. Can you put on your Searchlight partner hat for a second and talk about what you look for in excellence in operators? 

Ajit: Yeah. So a few things. First, and this might be unusual among financial sponsors. I don't know if other firms think of it the same way, but what we quickly realized is that there are terrific operators that are focused on a particular state. They wake up in the morning and go to sleep thinking about connectivity in that state. And to us, at least, that creates tremendous alignment with us as investors, because we know that we are all focused on building the best possible network that we can in that state. Moreover, they have a team behind them that is capable. What's the quality of their build team? For example. Do they have a good CFO and FP&A process? And things like that. Just so that we know that we're not backing somebody who tomorrow might wake up and say, "Hey, I want to go to a completely different industry," that kind of thing. And then similarly, does the state itself have a framework that is favorable for private investors? 

Jase: Interesting.

Ajit: So one of the reasons, full disclosure, we have a company called All Points Broadband in Virginia, and thanks in part to Dr. Holmes's leadership over many years before we made the investment, Virginia was at the front of the pack in terms of setting up a framework under the, I guess, two governors ago it was, to allocate subsidies from the state to various entities, counties and Broadband providers. And so we kind of had confidence in knowing, look, the state gets it, they understand the importance of Broadband. And more generally, they have a favorable business climate. They want to welcome private investment as a differnt context.

Jase: This is pure gold for state directors.

Ajit: I hope. Yeah.

Jase: Can you say more? Like what...

Ajit: Well, I think the thing... Look, I'm obviously preaching my book, but even taking off my Searchlight hat, I truly believe this now, that state Broadband directors should think of private capital as an aid to what you're trying to do. Because at the end of the day, public sector funds are only going to go so far, and you really need to invest in, one of the most powerful slides that I think Thomas was talking about was the number of local providers in Louisiana that got these awards. Many of these are going to be sub-scale. I mean, they can't tap the public markets in most cases. And even in the private markets, if they don't have private capital, they're essentially going to have to self-fund, which limits their build ambition. And so, that's where private capital can really step into the breach.

Ajit: And look, obviously we are underwriting, as every investor does, to a certain return on investment capital that we're hoping for. And so, that creates an expectation that the framework is going to incentivize that. And so, when we back a company like that, we're saying, "We're going to give you all the capital you need, in addition to the public subsidies, to achieve a very ambitious build." And we're confident at the end of the day the companies that we've backed are going to be able to do that. But I would encourage all of you to encourage some of these private investors to come into your state. At the end of the day, those are the ones who are really going to help. And even in unexpected ways. I know there was a question earlier about, what are the credit requirements or performance bonds? That, by definition, ties up working capital. The money that you have to tie up in that financial instrument cannot be allocated to the build, but if you have a financial sponsor that is willing to capitalize the company, that allows them to have the flexibility, the liquidity, to start building now. To really supply or give you an application that is strong and that is backed so that you don't have to worry about, "Okay. Is this company really going to be able to do it?" And so, we're really optimistic about BEAD and all sorts of different funding streams like that when they work in tandem with private capital.

Jase: Dig that. Okay. Switching gears for a second, Ajit. Let's say your car and you need to appoint somebody to the FCC, but they have to be a Star Wars character. Which do you choose and why? 

Ajit: Oh, this one is easy, I guess. Yoda. I think, because of when...

Jase: Yoda! 

Ajit: Oh, absolutely. Because in so many different ways...

Jase: Nice.

Ajit: And I think it was John who quoted out through the morning session, "We're always fighting yesterday's war." And so in some ways, I feel like channeling Yoda when he's instructing Luke in Dagobah in Empire Strikes Back, you must unlearn what you have learned. That is so true when it comes to Broadband policy because I think, as I found in government, one of the most powerful forces in inertia is like, the only reason why we do something is because we did it before. And I think the ability to unlearn some of the things, obviously maintain some of the wisdom from previous iterations, but really improve upon it and think in terms of step function improvements is really powerful. So, I don't know who else is going to be at the FCC or, of course, at NTIA, but I would hope that they would think anew about some of these paradigms so that they're not locked into the old way of doing things.

Jase: Yeah. Well said. You're very good at what you do. That was a half-assed last-minute joke. And you turned it into a really good answer with incense. That's pretty cool.

Ajit: I don't know.

Jase: Yeah. I have some more jokes, some dad jokes, and I'm going to ask you later in this show for some gently-worn dad jokes if you have any. So, be ready for that.

Ajit: All right.

Jase: In the meantime, another topic that keeps me up at night is the fact that the Buffalo Bills. And so you're from Buffalo originally? 

Ajit: I was born in Buffalo, yes.

Jase: But who do you root for in the...

Ajit: I root for America's team.

Jase: America's team.

Ajit: Kansas City Chiefs.

Jase: Kansas City Chiefs. You've heard of them? Has anybody heard of them? Let's go, Chiefs.

Ajit: I don't want to hear from you Dallas fans. Any Cinci fans out there? 

Jase: I see a Bengals fan over there. It's okay. It's okay.

Ajit: Three rings.

Ajit: No, I'm just kidding. I don't want to be one of those Patriots fans who over the years became so obnoxious. We were so... People like me are so grateful to be there because we suffered in the wilderness for 40 years of teams led by the likes of Steve Bono and Elvis Grbac that always failed. And so just to have someone like Patrick Mahomes finally get us to the promised land, it's so rewarding. So I'm really grateful to the team for giving me, before I die, some semblance of hope.

Jase: Some semblance of hope. Glorious hope. That reminds me of another question for you, Ajit. Are we living in a simulation? 

Ajit: Wow! 

Jase: Where it's 2020, Trump's president. The Olympics are going on. Dodgers won World Series. Dak is out for the season. The Steelers were in first place in AFC North. And the Bills beat the Chiefs in the regular season. Chiefs go on to win the Super Bowl. So, we're just living in a simulation and we can take that last part as a foregone conclusion, right? A three G? 

Ajit: One would hope. Although I think Buffalo and a number of other teams are gonna have something to say about that. But, yeah. We've been very lucky, two in a row. And I was at the Super Bowl this year and was seated in a niner section and I did not think we were gonna pull it out. So, we were very lucky to get there. And this year we've been getting by the skin of our teeth. So, this is all much more luck, I think, at the end of the day than anything else.

Jase: Yeah. Do you think we're living in a simulation? 

Ajit: I don't know. I sometimes wonder it's... Yeah. One of Nietzsche's favorite innovation was the eternal recurrence, like everything that's happened is going to happen again. I was skeptical when I was young, but now as you start to see these things happen over and over again, it's like, "Oh, I've been there or seen that, and life will be okay. We'll get past it."

Jase: You're a techie. As a recovering lawyer, you're also a techie.

Ajit: Yeah.

Jase: You're a peanut butter chocolate aficionado. You're a former FCC chairman. But you're a techie. I have a question for you. Do you see a role in which software can help make all of these processes that these folks that are dealing in the regulatory government funding and utility operator space more efficient, more effective? 

Ajit: Oh, definitely. So many different ways. As John knows, from the FCC alone, we used to do our auctions. We got auction authority in 1993, and we were running some of these auctions on paper, essentially. It's just unthinkable now, but that's the way these licenses were allocated. And fast forward to today, we have very enhanced, automated software that can just get this done in a much more efficient, transparent way. I'm sure the same is true for all of you. You have software tools at your disposal. When I think of things like deconfliction alone, oh my God! Can you imagine having to sit down there and think out by hand how to do this? It would just be impossible.

Ajit: Not to mention thankless, because the other advantage of software when it comes to systems like this that I think goes unremarked upon generally, but the folks in this room will appreciate it, is that the more automated or software-based a process is, the less likely it is to be attacked on political grounds. You're not gonna have a politician or a provider coming to you and saying, Hey, you just did such and such a favor by giving this an award." So the more likely you are able to focus on objective criteria and software that does the job, as opposed to you exercising discretion, the more likely it is to have public confidence.

Jase: Looking for people writing that down.

Ajit: No. I mean, it's not some great insight from me, but it's one of the things I found when I was in... When you're administering the Universal Service Fund, you're obviously a $10 billion revolving fund at the FCC. A huge amount of time was spent by me and our staff on handling all of these inquiries from politicians or stakeholders or constituents, companies, saying, "Hey, such and such application fell through the cracks." Or "Yes. We violated this rule, but give us a pass." And there are all kinds of public choice problems that attend to programs like this. And so, the more automated it can be, the better.

Jase: Well said, full life cycle too. Like the automation of reporting and compliance in the post-award period, such that you're not going, "Hey, where's that paperwork?" Because they got more important work to do their paperwork on the operator side. They got a job to get done.

Ajit: Right. And even on the accountability side. We, Searchlight, are looking for this, and if you guys know of any, let us know. But it's very difficult for us as an investor or sponsor to find software that tracks in real time how builds are going. How many miles did you build this week? What was the cost of? Those types of things. So that as board members, investors, as public officials, we can have full insight into how the build is going so that you don't hit this cadence of, oh, every milestone, somebody comes to you and says, "Oh, the dog ate my homework," and you're taken by surprise. Ideally, you'd like to have software that could help you track this stuff.

Jase: Yeah. Follow along with the journey of the design.

Ajit: Yeah. Because I think it's just much better for everybody involved.

Jase: As a partner. You're a partner.

Ajit: Yeah. And so you have full alignment of provider, investor, public stakeholder, and the like. So we're on the same page.

Jase: Well, Ajit, we want to make time for the Broadband leaders and luminaries in the room to ask really hard-hitting, important questions.

Ajit: Yeah.

Jase: But I still have some smart-ass questions to ask you, so we're gonna do that for just another couple minutes. Okay. We're gonna start, we're gonna get into some dad jokes. And do you have any gently-worn dad jokes that you can share with me? 

Ajit: Oh my God! I do. Yeah. I'm so sad that my daughter isn't here, because one of the great delights of being a dad and prerogatives, for those who are fathers in the room know, is embarrassing in front of their friends. And so now that she's 11, whenever she has her friends over, I just love telling her, "Annabelle, get this," and her eyes roll, and like all of her friends are just like, "oh, God! Here we go." So, one of the... There are many of them I could use, but I want to be mindful of time. Oh my God! You've got to be kidding me. That is hilarious.

Jase: Oh, yeah. This is a...

Ajit: That is...

Jase: This is for you.

Ajit: Yes. Oh my God! Get out.

Jase: This is for you.

Ajit: Yeah. This is a mug. I love it. This is the same size as the infinite shoes. That is more of a John Oliver mug, I have to say. That is incredible. Wow! For once, I'm speechless. That is something else. But, God! I can't even think of a good dad joke now. I'm so thrown for a loop. Oh, I guess the one I would say is, dad is walking with his daughter, and the daughter picks up a rock and says, "Well, do you know what the stone is?" And the dad says, "I'm not positive, but I wouldn't take it for granted."

Jase: Wow! Wow! 

Ajit: You may groan, but you love it.

Jase: All right. So, I'm gonna try a couple out on you. All right. So, mimes kidnapped my friend and they did unspeakable things to him.

Jase: It's from Doc Talk.

Ajit: Ah, that's pretty nice.

Jase: Check out Doc Talk.

Ajit: Pretty nice.

Jase: Do you know why I cannot stand elevator music? 

Ajit: Why? 

Jase: Because it's horrible, on so many levels.

Jase: We got elevator music fans in the audience? 

Ajit: Yeah. Right.

Jase: Yeah. So, Ajit, we super, super appreciate you. I wanna make sure to touch on something before we turn it over to the audience for questions. I'm gonna read it. I know you said this, and to me, you're like an embodiment of the American dream. So I wanna read this to people, and then we'll turn it over to some questions. So be thinking of your questions, y'all. But I'm gonna read it for folks that are back in the back room.

Jase: "Speaking of being blessed, I often marvel at how fortunate I have been. I think of my late grandparents in India. One of them lost his father young and had to drop out of high school to work; another ran a small spare auto parts store. I think of my parents, who came to this country 45 years ago with literally no assets other than $10, a transistor radio, and a desire to achieve the American dream. I think of all of their sacrifices, all those risks they took, all those long hours they worked, all those moments when they must have worned about what the future would hold. None of them could ever have imagined that their great-grandson, their son, would have the honor of being asked to lead by the President of the United States. I hope my tenure as chairman will show me to be worthy of sacrifices they made for me and the lessons they taught me. And I'm ever grateful that this wonderful country has given me and my family the opportunity to dream big." Wow. So, thanks for all you do. You're a cool dude. You're a major asset to America and to the people that need connectivity. So, we want to turn it over to these Broadband leaders that have real questions. So, what questions do you have? 

Ajit: I always get emotional thinking of that. Yeah. That was my first day, full day on the job at the FCC. And as most incoming chairman, you give a speech to the staff, and...

Jase: Wow.

Ajit: Yeah. That was a really special day.

Jase: We got some questions here.

Crowd: Just to get things started, thanks so much for spending time with us today. You referenced in the remarks about Spectrum. It's been a while since the FCC has had the ability to auction Spectrum. How long do you think it'll take Congress to give that back? 

Ajit: Oh my gosh. I'm hopeful it'll come back soon. I was listening to a podcast in which Senator Cruz, the incoming chair of the Senate Commerce Committee, said that his very top priority on that committee, and its jurisdiction is quite broad, covering everything from oceans to transportation, but his top priority is going to be Spectrum. And he has a bill, the Spectrum Pipeline Act, that would allocate, or direct the allocation of some 2,500 megahertz of licensed Spectrum into the marketplace. That would be a tremendous game changer. And it's really amazing when you think about it that. I mean, this is probably one of the greatest innovations in government history. This idea pioneered by Ronald Coase in 1959, allocating the scarce property right through the means of the market mechanism, as opposed to SEC commissioners saying, "I like you, but not you." Amazing. Generated hundreds of billions of revenue. And one year after Paul Milgrom won the Nobel Prize in economics, because he helped institute this auction mechanism, the SEC lost authority to do it. So, this is something that I hope comes back. And it's a pay for for the government. So it's not a partisan issue as well. So, stay tuned. I think good things are coming in the next Congress, the next White House.

Jase: Good question. Who else? 

Ajit: Hey.

Crowd: Thank you again for spending some time with us. I just was wondering if you would be able to touch on the intersection of BEAD and Carrier Of Last Resort. We're spending billions of dollars to build out to the last mile in many areas where there's not a business case, yet there's many providers that have a Carrier Of Last Resort responsibility for that same exact area. Do you think there should be any relief, or what action should be taken? 

Ajit: Yeah. And here, look, I'm preaching my book, but I'm also preaching what I believe. I do believe that those regulations should be relaxed in appropriate cases. And I think that ultimately, what you're doing is just distorting the investment incentives for a lot of these companies. Like, we have companies, for example, that are building these very rural areas and would be willing to underwrite a fiber bill to those areas. But the Kohler obligations are just so onerous that we can't get rid of some of the legacy network that we have. And it's weird, because the consumers that we serve want fiber. We want to supply it to them, but you have this archaic regulatory requirement that stands in the way.

Ajit: So look, I would encourage folks to really think future-proof infrastructure instead of yesterday's regulatory requirements. It sounds great in theory to have Kohler obligations, but at the end of the day, if you're essentially preventing some of your constituents from getting the technology of the future, are you really serving the public interest in those cases? So, I was very much deregulatory in that area when I was in office, and I would hope that others would be as well.

Crowd: Thank you again. We're just worried about some of the BEAD networks being cannibalized by Carrier Of Last Resort, when other networks have to go back to those areas.

Ajit: Yeah.

Crowd: All right. Thank you. Appreciate it. Nearly everyone agrees that the Universal Service Fund needs to be reformed. Many opinions on how we fund that reform. I'd love to hear you talk about some thoughts there.

Ajit: So now that I'm out of office, I can say, I think I might have said it in my last speech or hinted at it, but I do think that the time has come for Congress to shift this program to a general appropriation, as opposed to the SEC essentially overseeing what is currently, anyway, under the Fifth Circuit's decision, an unconstitutional exaction from consumers. Moreover, a regressive exaction, to the extent that it's allocated to phoned customers and doesn't include broadband services or big tech or whatever you pick your constituency. And I also think, as I mentioned earlier, the public choice problems that attend the Universal Service Fund, because the FCC administers it and oversees it, we spend an enormous amount of time and money just on the contribution and the distribution side.

Ajit: So what I would love to see is Congress say, "FCC, this is the USF budget for fiscal year 2025. Now, go structure programs to address these particular priorities like high cost or rural health care," whatever it is. I think we'd be much better off in that circumstance. And you wouldn't have the situation now where we're essentially getting more and more money from a declining base of contributors. And it's just a really unwieldy system right now. So, we'll see what happens in the Supreme Court, of course. I think, well, it's hard to say, but if they upheld the Fifth Circuit's decision, either the FCC would have to reform the program or if the program went away, I think you'd see a big bipartisan swell of support for this kind of idea that I've suggested.

Crowd: Hey, Ajit, thanks for that question. What do you think the future of the Affordable Connectivity Program is? 

Ajit: Well, there is no future now. As you know, this program has expired. And I would like to say that I'm grateful to Congress for establishing it, because we set it up during COVID. We called it EBB, the Broadband Benefit. And I think the benefits of it were shown such that they allocated a certain amount of money for ACP. So I do think it has been successful to some extent in, of course, helping those consumers who, at the lower end of the income scale, were just not able to afford broadband otherwise. But I'm not sure what the bipartisan appetite is in the view of the administration and Congress for establishing it. Obviously, Vice President, Vance, was a supporter of it, reauthorizing of it. But there are also others who were opposed to it. So I can't really forecast with any precision whether it's likely to come back. There are obviously some headwinds just generally. The country's fiscal situation is in a pretty dire state. And if anything, people are looking to pare back from public spends as opposed to adding. So I'm not sure. But one of the things I'm hopeful for, going back to the spectrum auction question, I'm hopeful, one of the ideas I had proposed to Congress, which was promptly dismissed, was allowing the FCC to redirect some of the auction proceeds to important national priorities.

Ajit: So one of the things the FCC could do, for example, if Congress gave the FCC this flexibility, is, to allocate, say, 10% of auction proceeds to help with the ACP and sort of create a revolving fund in that way. And to give you a sense of the quantum we're talking about, that Seabed auction, which was the last auction I administered, generated $93 billion revenue for the US Treasury. If we'd allocated 10% of that for the ACP, that's $9 billion just in one auction. So you can imagine, that could really help address some of the concerns that people had about ACP going away. So, we'll see where things go. But yeah. I wouldn't pencil in a reestablishment of the ACP just yet, sorry to say.

Crowd: So, one of the challenges with BEAD has been that we're all doing generally the same thing in 56 somewhat unique different manners, except for Louisiana, who just doesn't listen, apparently.

Ajit: Yeah. Hey.

S1: Which I appreciate.

Ajit: Laissez le bon temps rouler, right? 

Crowd: Putting on your investor hat, your Searchlight hat, or your carrier hat, what can we as states do to align, especially as we think about the long-term requirements, compliance and reporting, to align to promote greater efficiency for those sub grantees? 

Ajit: Oh, what a great question. I mean, I think the biggest thing is things like this, FORA, where you can share best practices, talk amongst yourselves about what is working and what's not. I mean, I think the FCC, again, rightfully gets a lot of criticism for RDOF. One good thing is, of course, that you had a uniform set of rules that everybody could see, and the administration was uniform across the country. One of the disadvantages of any mistake you made was, of course, replicated nationally. On the state level, of course, you have essentially 50 different programs, and so as an investor, it's been very very challenging. Some states, to be candid, have made the rules quite difficult to navigate. We just don't see a path to getting there, and so we're not going to invest in those states. Period. But in the states that are more open to encouraging private investment for the companies that they're looking to back, I think that sharing best practices is really really helpful. The letter of credit requirements, I know, sort of easy piñata, but I can tell you that it is a massive albatross for the companies, smaller companies, that we're looking to back. There just isn't a financial product for some of these companies to get in the market that would help them.

Ajit: So to the extent you can talk to some of your compadres who have relaxed those requirements, as Louisiana has done, that's really helpful. Or just different, I mean, it's probably too late now, but just project areas, deconfliction protocols, like all of the things, to the extent you can standardize it, it makes it so much easier. And I know it's difficult because your allocations are different, and so you've got to think about addressing the internet for all proposition in a very different way. But that's the kind of thing that makes it much easier to attract investment. Like I said, with Dr. Holmes in Virginia, I mean, we do basically what we were getting, and that just made it so much easier for the company we're backing, and for us, to say, "We're gonna make a major investment in this state." So, good luck. I mean, I really hope that you guys can coordinate as much as you can, because I know it's not easy, standing up a program can scratch you some cases.

Crowd: So, being familiar with the FCC, BDC, and the reporting and all of that, and seeing that, you know, for the most part, all the ISPs were responsible. But there were quite a few that might have been a little bit optimistic in their reporting.

Ajit: That's a fair thing to say, no kidding.

S1: So I see that the self-reporting isn't working. I'd like your thoughts on where we should go as an industry, not only with the funding but even beyond funding, of requiring performance testing on broadband. Now, I know we came up with this Broadband nutritional label or something like that to try and provide some more truth in Broadband. I'm just wondering if you had some thoughts on that.

Ajit: Oh God! Where to get started? I mean, it was so frustrating when I was in office to see these overstatements of coverage that you knew were overstatements, but the FCC is an agency with limited resources, we couldn't go out there, we're not gonna do drive testing, we couldn't in every single state ourselves, but you knew it was overstated. Mobility Fund was a good example of that, where we had carriers that were purporting to provide essentially 5G quality coverage when we knew there wasn't even 4G coverage. I mean, that's part of the reason why we couldn't pursue the 5G fund when I was in office, is that we just couldn't get to ground truth on where wireless coverage was and where it wasn't. And so I think part of what I'd like the FCC to do, and it's started down this road to its credit is, just enhancing the penalties for reporting inaccurate coverage. I mean, that's so important. With Jabbar from that Seinfeld episode, he worries trying to get the car rental. I mean, it's one thing to take the reservations, it's one thing to hold the reservation. It's one thing to say you have coverage, what really matters is having the coverage. And to the extent that you have penalties on the back end that are going to give these regulations some teeth, that's super important.

Ajit: And here too, I'd encourage you to enlist private resources to help you. In one of the states where we engaged, for example, we backed a company, we helped the state in trying to figure out how many BSLs they actually had. And so we did our own, we commissioned our own drive testing. We used Searchlight. And so we helped them increase the numbers of BSLs and increase their overall allocation by, we had to estimate, by some 27%. Because we were finding all of these locations were purportedly served by unlicensed fixed wireless, or in some cases even 5G that we knew, or a cable that had not been upgraded. The HFC plant might theoretically support 100 over 20, but we knew, based on what we were seeing, that it was under 25. So, there are a lot of people like us out there and we're not the only ones. So, you think of the private industry, both operators and investors, as partners with you. Because at the end of the day, our interests are aligned and we can help you get to ground truth much more quickly, and in some cases with no cost to you.

Jase: So email at ajit... Just like with your questions.

Ajit: Well, in all seriousness though, I honestly, this has nothing to do with Searchlight, but because I have the same laboring aura that you do in this enterprise, you can always find me on LinkedIn, and I'm not charging you, I'm not preaching my book, or if I am, I'll tell you. But I'm more than happy to help, because I know how difficult it is to navigate these tricky waters. And I want us to get all to get the job right. We're in it all together at the end of the day.

Jase: That's a pretty sweet offer.

Ajit: Yeah. No. No charge.

Jase: Have this guy on the team.

Ajit: Of course, it's gonna be worth what you paid for, but at least.

Jase: Yeah. Yeah. Quality, quantity.

Ajit: Yeah. Right.

Crowd: Well, I would love to have your predictions on what will come of USF reform, and then relatedly, it's my understanding that Commissioner Carr, soon to be chairman, wants Big Tech to contribute, whereas maybe Senator Cruz, who will have oversight authority, does not agree. So, how will that play out? 

Ajit: Wow! Going right to the heart of it. So I'll take the second one first. My understanding, based on the legal landscape, is that it would take an act of Congress to make an assessment on technology companies, and so we'll see. I mean, there's a big appetite for that, and in Europe, as you may know, the Digital Services Act and some of the other legislative vehicles the European Union has adopted essentially require contributions from Big Tech to support the infrastructure that they're riding over. And so, I think there's a growing appetite for that in the United States. I do think that there should be a broader assessment of the contribution. I mean, assessing USF on phone customers is just ridiculous. It's dope. This is going back to the Yoda conversation.

Ajit: I think we need to forget some of the old paradigms of doing things, and it used to drive me crazy when I was in office that USF is structured the way it is, or when it comes to the media marketplace, that for the purposes of the media ownership rules the FCC administers, we don't consider streaming or other types of internet-based platforms to be media products. Whereas my kids, when they think of, "We wanna watch TV," it's all streaming. It's just weird stuff like that, but anyway. So, I would like to see some legislative conversation about this because it would require legislative change. In terms of USF, it really does depend on what the Supreme Court does and how, if at all, the FCC responds. So, it's been a while since I looked at the Fifth Circuit's decision, but my understanding is it said that the FCC's rules delegating the authority to USAC essentially created a part or whole violation, part or whole being that the Supreme Court's basis said the governmental institution can't delegate to a non-governmental institution without rulemaking authority. And so, could an FCC order just update its rules to solve the problem? I don't know. I gonna find out. But yeah. I can't wait to attend the Supreme Court argument. It's going to be fascinating to see how that plays out.

Crowd: So thank you. I have a question, a little speculative in a bit. What do you see as the future of Broadband expansion beyond this phase of government-funded infrastructure? So beyond BEAD, ARPA, CPF, RDOF, what does the future of broadband expansion look like in your opinion? 

Ajit: Wow. That's a great question. I think it's incredibly bright, and I think that, of course, we've been talking a lot about residential Broadband, but I think there's such significant tailwinds for Broadband that I don't think yet are fully appreciated. We're at the dawn of a revolution in AI, for example. And one of the things we look at is the tremendous growth in data centers that are able to handle some of the internet traffic that's going to be generated by all these users. And those data centers come with tremendous requirements of their own. One of which, of course, is power and things like that. Another one is Broadband. Is there gonna be ever fatter and deeper pipes throughout the country to help accommodate that data center use. And moreover, some of the other verticals that I mentioned earlier, are gonna drive tremendous Broadband penetration, precision agriculture, telehealth. I mean, we're just scratching the surface. And so, to me it's not unthinkable. Oh, I should mention AR, VR as well, that you're gonna see a lot more, and other types of mobile applications that are gonna be very high bandwidth, require low latency.

Jase: See, you're a techie.

Ajit: I'm not a techie, but I just think it's incredible.

Jase: You're a closet techie.

Ajit: Well, for someone like me, it's just so unthinkable that when I was a kid, going back to that quote you mentioned, it's just amazing to me that when I was a kid, to talk to my grandparents in India, my grandparents had to reserve a 10-minute block of time from the local post office.

Jase: Oh my God! 

Ajit: And then my parents would have to get on the phone, a wired phone into the wall, and we'd have 10 minutes to just, all four of us, convey our thoughts. And now wherever I am, on a 5G or Wi-Fi connection, I can connect with my, I can have a Zoom call with all of my cousins from the UK, to Germany, to Austria, Australia, to India. So, flash forward a generation from now, there are things that those in this room would just laugh at, but they're gonna be commonplace. And so, the one thing that's a constant though, is the increase in bandwidth demand. So, I'm really confident that.

Jase: An insatiable demand for bandwidth. And to your point earlier about the digital services of tomorrow, it's not just the bandwidth. You were touching on the data centers, and we think a lot about information infrastructure as a three-legged stool, where transmission is one leg, but compute and store are the other legs.

Ajit: Oh, it's tremendous.

Jase: And having remote distributed compute and store resources, edge infrastructure, that's not just pipes crisscrossing, but capable of processing is gonna be essential to next generation telehealth.

Ajit: Definitely. And I mentioned power, by the way. And I don't know if any of you have jurisdiction over power, too. That is a major bottleneck in the United States, and you do not generate enough power to accommodate all of this bandwidth use. And so I know some, the temptation in some quarters might be, well, that's the energy sector's problem. It's our problem. It really is. And so, we need to think creatively, and regardless of party affiliation, I hope that we have a place where we can innovate more in terms of energy, whether it's in small modular reactors on the nuclear side, or just generating more power from traditional sources. We really need to get more power out there. And I think it's gonna help entrepreneurship and innovation too.

Jase: Yeah. You gotta talk to the guys at Amperage that are doing. They call it poly-utility, Brad Powell and Jack Lawrence, those guys. Because you're absolutely right, the more that you think of those things as sort of overlapping utilities, the better outcomes you're gonna drive.

Ajit: Right. Yeah.

Jase: And it is legally and morally, at this point, a utility. Broadband.

Ajit: Yeah.

Jase: Right. So, perfect. We have two more minutes, folks. I wanna make sure we get at least one more question. And we got a word from our sponsor, a note about some upcoming events.

Ajit: Yeah. It's either that or dad jokes, so take your pick.

Jase: You pick. Who here, raise your hand, dad jokes. You got a question.

Crowd: All right. So, thanks, Ajit. Appreciate you taking some time. One of my concerns in looking at the Fifth Circuit ruling is thinking about E-Rate. And as you... Can you identify a couple of the risks to the E-Rate program, number one. And then what should states, and then educational institutions that go after it themselves be thinking about for the future to help mitigate those risks? 

Ajit: Yeah. Good question. I mean, certainly, E-Rate faces the same general problems that the USF program does in both the sense of the declining contribution base and the legal foundation for the entire program. So, we'll see how those two things play out in the years to come. More generally, though, I think the problem that E-Rate has, and this is something that I thought of as a commissioner and proposed, and that's the one regret I have from my time in this term is that we didn't reform the program. It's just to make it more user-friendly. I know that there are some school districts and schools, individual schools and libraries that do fantastic work with E-Rate. But I remember very vividly going to my own hometown. I grew up in Parsons, Kansas, and relatively lower income community, south of Kansas City, very small school district, and they did not have the money to hire an E-Rate consultant or otherwise navigate the thicket of forms. Oh, I mistake on any one of which would have put them into this NUSAC appeal process. And so it really broke my heart when the school district administrator told me, "We don't even bother applying for E-Rate because it's so complicated."

Ajit: I would love to see future FCC just streamline this entire process, either make it a student-based process so you get a fixed amount of funding based on the number of students you have. Some objective criteria allows you to make an application process just one page, either for a school or a library or for a school district so that anybody, anywhere, should have the ability to apply for and get funding. And secondarily, I would say that E-Rate should be restructured to give school districts more flexibility.

Ajit: Some schools that are more advanced may need the sort of internal Wi-Fi connections. Other schools that are more in the starting blocks may need fiber. Like give them the flexibility to decide what it is that they want and institute accountability measures in the back end to make sure that they use those monies for the purpose intended. But where we are right now it's just, there's some school districts, and you see some of these are criminal cases where the school district gets a ridiculous amount of funding and you see computers or other equipment just sitting in closets because they never use it because it's just a waste of money, and then you see school districts like mine which just don't get anything. And so to me, at least, educational equity in the tech space means that your ability to leverage these technologies should not depend on who you are, where you happen to live, or the facility of your school district. It should just be a flat opportunity for everybody to benefit from the E-Rate program.

Jase: Wow.

Ajit: Oh, Dr. H.

Jase: I'm sorry. Dr. Holmes, please. Question. We'll go a couple minutes long.

Crowd: Ajit, so one question I have, and so you know in Virginia, just to bring up RDOF, it is the elephant in the room for a lot of directors with potential companies defaulting, right? 

Ajit: Right.

Crowd: And so we've been fortunate in Virginia where we've been able to work through a lot of 214s where the RDOF winner has now said, "Okay. We're really not gonna bill it out. We don't wanna default," and so we've been doing a lot of transfer of RDOF locations from RDOF winners to other providers that they might have beaten RDOF. And so, other states aren't even having those conversations yet, and so I'd just be curious, with you all working with a lot of providers in many other states, how are you all sharing that opportunity? Because I don't think a lot of folks know that states have the ability to do that if providers are willing to take on the RDOF. And so we've been really successful where we know that we've been able to get out in front of defaults and be able to either add them to BEAD or be able to move them to an existing body project and get them built out now.

Ajit: It's a great question. And this is one of the things I wish it could have been streamed, figured out before BEAD began in earnest. Of course, I was hoping that the FCC would rid out some of these RDOF zombies, you might call them, that they're just, they have the award but they're not gonna show and they're also not going to default because there's no sort of mechanism that forces them to default. And I would much prefer, look, I would love for them to be defaulted so that you can get those back into the BSL pool and you can address them in BEAD. Because the worst thing in the world would be, if after all of this is done, you spend all of this money and you still have tens of thousands of locations that don't have Broadband, there's not going to be a BEAD 2.0. This is it. And so, you should get it right now. S, o if a state doesn't have the FCC won't force them into default. I would definitely encourage all the RDOF recipients and others to be aware that there is this possibility of essentially transferring the RDOF liability or opportunity to another provider that's going to do the job. I bet you a lot of them, they don't wanna turn the RDOF board in because they're worried about what that might mean, but you sort of create a safe space for them to relinquish it.

Ajit: There are plenty of other, we back companies that do exactly this, and we want to build into those organizations. And if we knew them, and we knew them as valuable additions. So, that would be terrific. I don't know if NTIA is without guidance along those lines, or if the FCC might put out a notice saying, "Hey, we encourage this type of intercompany transaction and cooperation with your state." But that can be really powerful, especially before the competitive process is done, of course.

Jase: Folks, today's Fireside chat with the Ajit Pai is brought to you by teleguam.com. If you absolutely have to telecom, make sure it's teleguam.com. On that, I want to thank you.

Ajit: I'm actually, I'm genuinely afraid to look at the domain on my phone. I'm not sure what's going to pop up.

Jase: Ajit, thank you so much for all you do to get folks connected and making time. And go check out teleguam.com. I think you'll like it. Thanks so much.

Ajit: Really appreciate it.