FCC Chairman Brendan Carr explains the humanoid robot import ban, space internet fast-tracking, and new national security lab checks

Speaker 1: Exactly what happened.

Speaker 2: Exactly what went down.

Speaker 1: But looking back on them, they did seem like crazy crazy things that had to come true.

Speaker 2: I think Ed should join an AI lab and

Speaker 1: With these predictions.

Speaker 2: Maybe as like a chief strategy officer. Maybe. Because he's imagining everything that could go wrong. But Yeah. Through that, he's imagining everything that could go right.

Speaker 1: Well said.

Speaker 2: And so, if he put his optimism cap on Yeah. He might make a great chief strategy officer. Yeah. Maybe at a deep mind. Maybe they could pick him up.

Speaker 1: That'd be great. Well, chairman Brendan Carr is in the waiting room. Let's bring him into the TBPN UltraDome. How are you doing, Brendan?

Speaker 6: I'm doing great. It's

Speaker 1: Long overdue. Thank you so much for joining. How are you?

Speaker 6: I know. I'm so glad to be with you guys. I love the show. Love what you're doing. I dressed down a little, no tie. I kept one extra button compared to you. I didn't go the full There

Speaker 1: you go.

Speaker 6: You know, preview.

Speaker 1: But take three down.

Speaker 2: The Kugan preview. The Kugan preview. That's that's an amazing line.

Speaker 6: As a bureaucrat, you know, as someone that regulates broadcast airwaves, not you guys, but airwaves, you know, decency still matters where I come from.

Speaker 2: Well, we wanted we wanted to have you on because we wanted to push for podcast safety. Yes. We think that it might be a little bit irresponsible for the US government to allow just anyone to grab a microphone Yeah.

Speaker 1: And get Yeah. What's it gonna take to airwaves? I want I want a, you know, multi year approval process for new RSS feeds I do.

Speaker 2: And maybe like annual, you should maybe need a million dollar fee annually Yeah. I mean sort of maintain that TBPN

Speaker 6: is doing so well. We need to build a moat around you guys. It'll make it harder for others to to do this.

Speaker 1: Yeah. I think they call it regulatory capture.

Speaker 2: That's what I wanna do. Let me let talk about podcast regulatory capture.

Speaker 1: No. We are here to talk about robots first or where do we wanna start? China, different supply chain pieces? What's newest in your world? Well, probably some

Speaker 6: of the newest stuff we've done. When we started, we stood up a new council on national security. We've been doing top to bottom review of all bad actors, foreign adversaries. Most recent thing we did just a couple of days ago was we added to our covered list. Yeah. So the FCC, there's no piece of electronics that you can use without going through FCC processes. Yeah. Putting on the covered list means new models of that thing can't be imported or sold in The US. So we've added a couple of things to that. Mhmm. We did advanced robotics. So think humanoid robots. Mhmm. Think those quadruped robot dogs. And the idea is if you look to the future, those advanced robotics are gonna be key to our economic security, to our national security. And president Trump is looking around the corner and saying, you know what? It's probably a good thing if we don't become dependent from a supply chain perspective on a foreign adversary nation or a bad actor for that stuff. So we're trying to onshore that. We've done similar stuff before with drones, for instance. At the end of last year, we added all foreign produced drones. But it's a balanced approach, meaning it's new models, so we're not gonna take anything out of your hands right now. You can still buy, quote unquote, new versions of existing models.

Speaker 1: Okay.

Speaker 9: But it's

Speaker 6: a way of signaling to the market, like, it's time to adjust, guys. We need, you know, a safe domestic supply chain. So it's good from a Nasdaq perspective, but it's also great for investment in jobs in terms of onshoring domestically as well.

Speaker 1: Yes. So you said it it it's good for the market or the market will adjust. I'm interested to know what is your process for assessing the capability of the American supply chain to actually step up to the call when there's, you know, basically there's going to be a gap in the market around drones, humanoids. Fortunately, it feels like we're not in a situation where I'm talking to entrepreneurs who say, look, I set up this business years ago. I am dependent on buying this particular thing from China or internationally on an ongoing basis and this ban is going to throw me way, way off like what might happen with other pieces of the supply chain. So there are there isn't a whole industry that's dependent yet. But what are you doing to actually understand how quickly and how capable the American industry is to fill the gap that that will be created by this?

Speaker 6: Well, there's a couple ways we take that into account, and I'll I'll walk through them. But just as as context, for instance, when we added drones to the covered list, we saw something like $5,000,000,000 flow newly Yeah. In The US domestic drone manufacturer. They're not making drone motors at scale in The US, which we've never really done That's crazy. Before. But the balanced approach is this. So, again, if you're buying a motor or a battery from overseas today, you can still continue to buy that because the prohibition is only on new models, and the the companies overseas can continue to produce the old ones. And then, again, there's also an exemption process. So for instance, on drones, we went through the the relevant agencies went through and exempted toy drones, for instance, from Sure. The ban. And so it's balanced that's forward looking. Let's not develop too much dependency. Okay. Maybe there's a couple thousand of these. Not a huge deal. We don't want a couple million. So the entire regulatory structure allows for exemptions plus transition. And then look. We can come back afterwards and remove the, quote, grandfathering for existing models. And in fact, we're doing that now Mhmm. For things that were added to the cover list before 2024. So things like Huawei Mhmm. ZTE, that type of equipment. Again, one, it's not consumer facing as much. Sure. But two, you had multiple years to adjust to to where we think the market's going.

Speaker 1: Do you have any optimism around these, frontier AI models have incredible cybersecurity capabilities? I could imagine a world where before there was a lot of fear, uncertainty and doubt about certain pieces of electronics that are made internationally potentially having backdoors or spyware. And if you can hammer one of these, you know, one of these systems with every possible test, are we going to wind up in a world where we can more confidently say yes or no? Does something have a backdoor? Or is this just, you know, everyone will just be stuck in a never ending race and we'll be back to where we were?

Speaker 6: Yeah. I I do think it's helpful from that perspective. And, obviously, there's telco companies that are on the early release list for a lot of these models, help identify any patches that might Oh, yeah. Be necessary. Yeah. But we're doing a couple things that are new as well. So it used to be if you wanted to sell electronics in The US, you had to go through a lab, and the lab would test it for power levels and interference, very basic technical stuff. We're now inserting national security checks in that lab process. In fact, we stood up something called a bad labs proceeding because it turns out that something like 70% of all electronics that ultimately arrive in The US are tested at labs located inside China. And some of those labs themselves were, you know, linked or controlled by or tied to the PLA.

Speaker 1: Yeah. That's

Speaker 6: fine. So not necessarily the most trustworthy. So we're kicking many bad labs out of the testing process. And again, it's helping to onshore some of that testing process. We do want to make sure throughout all of this that there's much more trustworthiness checks along the way.

Speaker 1: That's very interesting. Jordy, do have anything else on this?

Speaker 2: No. I'm I was I was very excited to see the news from last week or or maybe it was the week before just because I even processing the drone industry and even the consumer drones personally personally, I think drones are are great. I've seen drones that that have captured some cool footage of snowboarding or surfing and all these things. But the idea of having, you know, millions of, you know, if you could ask any foreign adversary government, hey, would you like to have millions of, you know, flying cameras in in one of your geopolitical adversaries within within their borders, they would say like, absolutely. That's that sounds that sounds great. Let's do that. And so the idea that let that we were gonna let the same thing happen that we the the the thing that we let happen in drones, that we would let that happen with humanoids, are much more of a risk to me. They can actually have the the, you know, they're not they're not they're not very significant today, but they can have a real effect on the world. And the idea that we would allow, you know, millions or eventually even billions of these into our borders just was very concerning. So personally, I'm I'm glad that you guys took action.

Speaker 1: I'd love for you to explain the e rate program, what's going on there with school Internet. I think it's under discussed story. What what sounds very good on the face of it. You want students in America to have Internet. How are things changing? What's the history of the program? What's the story going forward?

Speaker 6: This one's interesting. So this country over the last couple of years, I think we really experimented with going all in on screen time for kids, and the results of that are starting to show themselves. And the results aren't great. I mean, we have actually gone through one of the most significant losses of sort of human capital from a learning perspective that we've basically ever seen. I mean, going back to almost the the dark ages when you look at some of the the decline in test scores. And and to some extent, I don't know if it's, you know, correlation or or otherwise, but it it it coincides with this big uptick in screen time. And the FCC has a role to play. Mhmm. We fund Internet connections and, to some extent, internal connections at schools all across the country, multiple billions of dollars a year. And so we've done a top to bottom review of our program to make sure it reflects the current research on screen time for kids. And it's not just us. Obviously, you're looking at a big movement around the country. Different states, different school districts are all starting to say, you know, maybe put the smartphones away. Maybe put the screens away. When you got young kids, kindergarten, first grade, they're just swiping all day. Idea of this

Speaker 2: program this school nearby me, elementary school in PE, they spend more than half the time on iPads looking at physical exercise like diagrams. I'm like, these are children. Maybe just let them run around outside. Stupid. Yes. Exercise. Yeah. Odd. It's like we've gone too far.

Speaker 1: Get us up to speed on what's happening with Starlink and other space based internet connectivity programs. It feels like much to the benefit of the American Internet consumer, the race is heating up. There are more companies launching constellations. What are your KPIs? What do you want to see? Is it faster approval times for new constellations? Clarity around who owns what spectrum? Smoother auctions? Like, what is on your to do list for the next couple of years?

Speaker 6: Yes. A little bit there that we're doing on every of the points you hit. So for one, president Trump came in and gave a very clear direction. He said he wanted the The United States to lead the world again in technology. And in space in particular, we're now seeing that. So there's this new technology called direct to device where you can go straight from your smartphone right to a low Earth orbit satellite. You don't even need that little Starlink Mini or other satellite provider dish near you anymore. It's just starting to emerge. But we're putting the regulatory framework in place at the FCC for that to succeed. One, that means more spectrum. You need new airways for that technology to work. We've been facilitating many transactions to do that. Starlink, that was a big chunk of spectrum. Amazon is buying another company called Globalstar to basically take their spectrum and use that for their own version of direct to sell. And then inside the FCC, we're taking our space bureau, which historically processed applications for a lot of this stuff, and they would review individual applications and long narratives. It'd be very subjective. We've scrapped that entirely, and we've replaced it internally with an assembly line where we give you clear rules of the road. If you hit these targets, your applications will be on the fast track, and you're gonna go. Because, again, look at the the launch cadence. Look at the amount of mass going into orbit. We gotta keep up with that. And this is some place that I'm just super excited for the country, this hard tech area, these you know, the kids from the Gundo that are now everywhere outside the Gundo as well. I mean, what they are doing right now is a, I think, a huge part of the future of this country, and we wanna make sure the FCC is not sand in the gear when they continue to innovate the way they are.

Speaker 1: Does what does the FCC have any other roles to play in that? I mean, we've seen like every day there's a company, a startup that's coming on to announce an LOI or some sort of deal with a different piece of the government. Are there any other ways for the startup ecosystem or the tech community to interface with the FCC beyond, okay. I got approval for this thing.

Speaker 6: Yeah. We're working across the board to make sure that, you know, whether you're big or you're small, medium sized company, that you can get a yes or no answer from the FCC. And part of that is just getting rid of dead wood. So we started this proceeding at the agency called delete delete delete, which is about going through every single page of our rule books and getting rid of anything we don't need. Mhmm. We've obviously sort of resulted in, you know, thousands of words being taken out. I think 400 pages have been removed from our code of federal regulations already just so that, you know, whether you're small or unsophisticated, it should be much easier to engage with the government. We've cleared the application backlog in space, you know, by about 50%. So we're seeing some good results there for everyone to engage with the agency.

Speaker 1: That's very exciting. Jordy, anything else?

Speaker 2: Not for now, but let's do it again soon.

Speaker 1: For coming on the show. Have a great Honor to

Speaker 2: have you.

Speaker 1: Day. Have a great week, and we'll talk to you later.

Speaker 6: Good to see you guys. Thanks.

Speaker 1: Good to see you. Bye bye.

Speaker 2: SpaceX had earnings. Oh, yeah. How'd they do? Let's see first ever earnings as a public company.

Speaker 1: I Up 10% right now?

Speaker 2: Nope. Down Down Well, 5%. Was 9% today. Point 4% Down. Four and a half percent after hours.

Speaker 1: Okay.

Speaker 2: First up, SpaceX announces a new partnership with NVIDIA to design its Starmind AI one payload, bringing data center class compute into orbit. That makes a lot of sense. Let's find some actual numbers.

Speaker 1: So revenue was 7,810,000,000 versus 6,930,000,000 expected. Loss per share was 9¢. Average analyst estimated a loss of 26¢. Revenue jumped 92% from $4,100,000,000 a year earlier. So huge, you know, you're, even at this scale, still doubling the revenue. And it's the first time Elon Musk's reusable rocket maker will face Wall Street in this capacity, and investors are jittery. SpaceX stock has dropped 12 per 16% since opening at a $150 a share on June 12. And SpaceX lost 4,900,000,000 last year largely due to heavy investments in artificial intelligence, which we've discussed. The company merged with Musk's x AI in February. CNBC reports saying that at the time, the vision was to build data centers in space, but the launch business, which counts on large contracts from NASA, is losing money. Most of SpaceX revenue for the year and its only source of profit came from its connectivity segment, which consists of its Starlink Internet service. Starlink is sold directly to consumers. So here's how SpaceX performed in the three key segments. For space, they brought in nine sixty two million dollars versus $835,000,000 which was expected. So they beat in space. On connectivity, they brought in $4,290,000,000 So the Starlink business is four more than four times the size of the actual launch business. They brought in 4,290,000,000 versus 3,830,000,000 that was expected, so they beat there. And on AI, they brought in 2,560,000,000 versus 2,180,000,000 expected. So beats across the board and very interesting to see that the thing that they started doing, space, of course, launching rockets, is now their third largest line of business. Connectivity is, of course, bigger and also AI is bigger.

Speaker 2: Everything is computer, John.

Speaker 1: Everything is computer. That is a good summation of it.

Speaker 2: And that's good place to end our show.

Speaker 1: Let's play you out with the most feared lawyer, John Quinn. Leave us five stars in Apple Podcast and Spotify. Sign up for our newsletter at tbpn.com, and we'll see you tomorrow at 11AM Pacific. Goodbye.