Trusty: State Regulation Poses Threat to US Leadership on AI

Over the past year, more than 1,000 AI-related bills were introduced at the state level, Trusty said. “While well intentioned, this growing patchwork of approaches creates uncertainty, increases compliance costs and risks slowing deployment, especially for smaller innovators who lack the resources to navigate 50 different rule books.”

Innovation doesn’t “stop at a state’s borders, and our policy frameworks should reflect that reality,” she said. Prescriptive regulation doesn’t “work for fast-moving technologies.” She noted that the Trump administration’s AI action plan directs the FCC to look at whether state laws interfere with the agency’s “ability to carry out its obligations and authorities under the Communications Act” (see 2507230050).

Trusty also highlighted the role that AI will play in making networks “smarter.” AI-based spectrum management and network optimization “are increasing capacity, improving efficiency and enhancing performance, often without requiring additional bandwidth,” she said. These AI tools “allow networks to anticipate congestion, allocate resources dynamically and adapt in real time.”

Trusty argued that for AI to succeed, the FCC must continue to make permitting easier. The U.S. leads the world in computing power, “but computing power alone does not deliver impact,” she said. AI “is delivered by networks, and when networks are strong, the benefits of AI are already clear.” The U.S. is the global leader in AI today, “but our competitors are not far behind,” she added.

President Donald Trump “has been very clear” in his opposition to state regulation of AI, said Deputy Labor Secretary Keith Sonderling. Using AI to make employment decisions might prove “much more transparent” than “the black box of an algorithm,” he said. In the employment context, “we’ve been dealing with the black box of the human brain since the beginning of time.” The Department of Labor’s job is to establish the guidelines and parameters for using AI in a transparent and fair way, he said.

NetChoice CEO Steve DelBianco agreed that AI on a national basis “could run headlong into a patchwork of state laws.” By one account, 1,800 AI laws are now before lawmakers in the states, up from 1,100 in 2025, he said.

If there are gaps in federal and state law, DelBianco added, policymakers should fill those gaps to protect people from harm, rather than trying to regulate “the AI that was used.”

NCTA President Cory Gardner also warned that state laws threaten the future of AI in the U.S. “We need to be sure that all relevant stakeholders are at the table when policymakers at all levels” consider rules that will be in place “for decades to come.” States like California, Colorado and Utah must “collaborate” with industry as they examine AI laws, he said.

In a separate session, Public Knowledge CEO Chris Lewis said the federal government should take a lesson from states that are stepping into the void of AI oversight. “You may not like the regulations that they're enacting, you may like them, but they actually have the political will to do something.” There needs to be some form of federal digital regulator for digital platforms, including AI, he argued.

Evan Swarztrauber, a senior fellow at the Foundation for American Innovation, said that while there’s heavy competition in the AI space, it may not last as a few companies get a choke hold on the market. Legislation or enforcement actions might become necessary to ensure it remains competitive, he said.

David Don, Comcast's senior vice president of public policy, questioned whether there will be data portability, like phone number portability, so AI end users can move their chat and searches from one AI platform to another. It also remains to be seen whether market forces will force transparency, such as in the case of chatbots suggesting a good or service that turns out to be sponsored, or whether government action will be needed, he said.

In addition, Gardner said critical infrastructure is “the backbone” and “the foundational element” that makes AI possible, so it must be part of every U.S. economic and security plan. “A connectivity infrastructure industrial policy is core AI.”

NCTA members have invested more than $355 billion in high-speed broadband over the past 20 years, including $26 billion last year, Gardner noted. They have built more than 800,000 miles of fiber-optic network, and nearly 90% of the U.S. has access to broadband speeds of 1 Gbps or higher from cable providers, he said. Consumer and business use of AI “simply would not be possible without this enormous financial commitment from the nation’s leading broadband providers.”

USF Reform

The event saw agreement among speakers that USF needs reform but pessimism that Congress or the FCC would undertake it. New Street Research’s Blair Levin said reform has been a must for years, but it’s not an issue that any FCC chair has been willing to tackle. When BEAD is done, Trump and Commerce Secretary Howard Lutnick will declare mission accomplished, he predicted, though there will remain utilization shortfalls and digital divides.

Lewis noted that the bicameral USF working group seemingly hasn't done anything since it collected comments at the end of the summer, and election season is rapidly approaching, when Congress starts to do less. “The window is closing for them to take action.” BEAD and the affordable connectivity program were short-term fixes for the digital divide, but long-term fixes require USF reform, he added.

Swarztrauber said that if USF is to continue, but without funding from direct congressional appropriations, “the obvious place to look” for contributions is Big Tech. “It is not a punishment” but reflects the fact that USF has been an indirect subsidy to tech companies for years, allowing low-income consumers to use Big Tech services, he said. “I think it’s not unreasonable to ask them to contribute what would be a rounding error in any sort of quarterly earnings to this program.”

Conference Notebook

Physical infrastructure “is back” and will generate big returns in coming years for builders and deployers of towers, satellites and fiber, said Arpan Sura, an aide to FCC Chairman Brendan Carr. Sura highlighted the agency's work to make infrastructure deployment easier, calling its cutting regulations and closing dormant dockets “a regulatory rewiring.” Emerging tech such as orbital data centers, drone swarms and 6G will require substantial physical infrastructure in the form of power, fiber, spectrum and launch capacity, he said. Under the “abundance agenda” of the FCC, “the default should be ‘yes.’ Yes to building, yes to deployment.” The agency wants regulatory frameworks “that treat infrastructure as a positive-sum activity, not zero-sum, based on mentalities of scarcity and rationing.”

House Science, Space and Technology Committee member April McClain Delaney, D-Md., said Carr’s assertion that the FCC isn’t formally an independent agency (see 2512170067) “is absurd,” noting that it’s authorized and funded by Congress. She said communications infrastructure providers want long-term certainty about regulatory policy, which makes a bipartisan FCC focused on the public interest important.

NTIA Administrator Arielle Roth said the agency has approved BEAD plans for six additional states -- Oregon, Pennsylvania, Tennessee, Vermont, Mississippi and New Mexico -- as well as Puerto Rico and the U.S. Virgin Islands. She said she's “thrilled that we’ve been able to get these over the finish line.” That means 50 of 56 plans have been approved, NTIA said.