The committee’s released portion of the reconciliation bill includes several sections directly related to tech and critical infrastructure projects. Let’s go through a few of them:
AI Moratorium
If you believe (as we do) that America’s technological edge requires investment, talent, and regulatory coherence then this week brings promising naews from Capitol Hill: a draft reconciliation provision that would provide $500 million for federal AI modernization while establishing a critical 10-year moratorium on state-level AI regulations.
This legislative approach recognizes what innovators have been saying all along: a mishmash of contradictory state regulations threatens to strangle AI development before it reaches its full potential. As states from California to Colorado hastily rush to develop their own frameworks — including some that have already faced loud criticism from prominent national Democrats –Congress appears ready to recognize its role in setting the pace in an area that demands national coherence.
“There have been over 1,000 AI-related bills introduced so far at the state level,” a source familiar with the committee’s efforts told ALFA. “This potential legal patchwork would stifle innovation, harm small businesses, and jeopardize U.S. technological leadership.”
The moratorium is carefully calibrated – it doesn’t prevent states from streamlining processes for AI deployment or applying genuinely neutral laws. What it does prevent is the emergence of 50 different regulatory regimes with conflicting compliance requirements that would make it impossible for startups to scale and enterprise companies to deploy nationwide solutions.
“That would truly drown American businesses and innovators in red tape,” the source added. “We should be focused on streamlining and cutting red tape for innovators and small businesses who won’t be able to succeed if these costly rules take effect. Especially when you think about China and DeepSeek, we simply cannot afford to be in a regulatory environment that is unfriendly to innovation.”
Consider the downstream effects of regulatory fragmentation:
- AI models that work in certain states but not others
- Digital assistants that must be programmed differently across state lines
- Startups forced to geo-fence their innovations while foreign competitors advance unencumbered
This would represent a significant competitive disadvantage in the global AI race. Instead, continued American AI leadership should be aided by federal preemption.
Questions remain about whether this provision will survive the Senate’s “Byrd bath” on eligibility for budget reconciliation. Despite this uncertainty, Congressional leaders deserve credit for recognizing the importance of regulatory coherence and taking action to secure our technological future.
Spectrum
After a two-year pause, Congress is poised to restore the FCC’s spectrum auction authority through this bill. While not a household topic or mainstream headline-grabbing news, this is by far the biggest telecommunications policy decision this year and is important to the continual improvement of America’s wireless infrastructure.
At the Milken Conference last week, FCC Chair Brendan Carr noted that getting spectrum authority back and auctioning new spectrum was one of his top priorities.
He said: “We need at least 600 megahertz of additional spectrum to catch up with China. Right now China has over four times the amount of spectrum that we have in the U.S.”
What’s happening:
- The FCC hasn’t been able to auction spectrum since its authority lapsed in 2023
- The new bill will likely reauthorize auctions and outline a “pipeline” for future spectrum releases
- CBO estimates the proposal could generate $80-90 billion in revenue
Congress will likely authorize auctions first, leaving the more technical and market-shaping questions of spectrum allocation, sharing protocols, and service priorities to be addressed through the regulatory process.
License (and Insurance) to Build
Capital investment abhors uncertainty. And perhaps no project represents the risk of uncertainty more than the Keystone XL pipeline. When we were young cubs on Capitol Hill, the House had passed legislation approving the Keystone pipeline. That was over thirteen years ago. Obama blocked it. Trump approved it. Biden then blocked it. And now today, Trump again wants it built. The amount of time and capital lost from this bureaucratic back and forth is enough to discourage any developer from betting on the U.S. This new bill aims to de-risk these types of critical infrastructure projects.
A new program would allow sponsors of energy projects to invest in insurance against adverse federal actions that would derail a previously favorable interaction. Meaning, if one administration gives the green light and a future administration then pulls the plug.
How it works:
- A project sponsor pays five percent of their capital contribution to the project as an enrollment fee
- The sponsor than pays an annual premium equal to 1.5 percent of the sponsor capital contribution for the applicable covered energy project
- Should an adverse federal action cause unrecoverable losses, the Secretary of Energy would compensate the project sponsor for up to the full amount of the loss from the available funds
This — along with the Natural Resources Committee fee to streamline NEPA reviews — offers creative paths for needed infrastructure development in the U.S.
