New FSF Scholars Paper on the Progressive Origins of the American Administrative State

On September 11, Professor Joseph Postell, a member of the Free State Foundation's Board of Academic Advisors, published a Perspectives from FSF Scholars paper titled "Progressivism and the True Beginnings of the Administrative State." Professor Postell is the author of an excellent work of history and political theory titled Bureaucracy in America: The Administrative State's Challenge to Constitutional Government, published in 2017 by University of Missouri Press. 

Professor Postell's Perspectives paper sets out a definition of the term "administrative state" and argues that the American administrative stated emerged in the early 20th Century, based on a now theory of constitutionalism advanced by Progressives. This paper is the latest installment in a series addressing important moments in the development of the American administrative state and explaining how those moments ought to guide contemporary reforms. The series is particularly timely today, on the eve of Constitution Day. 

Series on Constitutionalizing the Administrative State

Joseph Postell, "Bureaucracy in America: A Constitutional Approach to Administration," Perspectives from FSF Scholars, Vol. 13, No. 13 (April 17, 2018).

Joseph Postell, "The Framers Establish an Administrative Constitution," Perspectives from FSF Scholars, Vol. 13, No. 19 (May 24, 2018). 

Joseph Postell, "Reconciling Administration and Constitutionalism in Early America,"Perspectives from FSF Scholars, Vol. 14, No. 2 (January 14, 2019).

Joseph Postell, " Progressivism and the True Beginnings of the Administrative State,"Perspectives from FSF Scholars, Vol. 14, No. 21 (September 11, 2019).

Check out Professor Postell's scholarly work in this series and stay tuned for more. 

Report Indicates Robocallers are Making Heavy Use of Smaller Networks

On September 12, Transaction Network Services (TNS) released its "2019 First Half Robocall Investigative Report." According to the TNS Report: "The data suggest that while top carriers are making inroads in the fight against robocalls, VoIP providers and smaller regional carriers need to take more aggressive action as bad actors shift focus to their networks." The top six U.S. carriers represented 70% of total calls during the first half of the year, "but only 12% of high-risk calls are from numbers owned by these carriers." 

The TNS Report found that "[R]obocallers may shift focus to smaller, regional carrier networks." As pointed out in a September 12 USA Today article, many smaller carriers appear to be behind the major carriers in implementing STIR/SHAKEN technology to verify that numbers displayed on Caller ID actually placed calls. And it appears that efforts by major carriers may be responsible for reducing robocalls originating in their respective networks. 

As mentioned in my August 23 blog post, a dozen major carriers have entered into an agreement with all fifty State Attorneys General to combat illegal and unwanted robocalls and caller ID spoofing, including by implementing STIR/SHAKEN. On legislative efforts in Congress to protect consumers from scam and unwanted calls, see my April 15 blog post.

MEDIA AVISORY: USF Surcharge Now at 25%

The following may be attributed to Free State Foundation President Randolph May:

“Today the FCC announced that the so-called Universal Service Fund “contribution factor” for the fourth quarter of 2019 will be 25%. What this means is that this 25% surcharge —in economic reality, a tax —will be added to consumers' telephone bills for all interstate and international calls. For comparison’s sake, in the fourth quarter of 2001, 2010, and 2015, the USF surcharge was 7%, 13%, and 17%, respectively.

Much of what the USF subsidies support through collection of the surcharge is worthwhile. But the fact of the matter is that sooner or later — and perhaps sooner — consumers are going to wake up to the fact that the USF tax on interstate and interstate calls is now 25%. When they do, public support for the various universal service subsidies may diminish rapidly.

It is incumbent upon the FCC — and Congress — to  look seriously at further meaningful reforms to increase the cost-effectiveness and efficiency of the USF programs and to increase even further efforts to weed out waste, fraud, and abuse."   

FCC Proposal Would Reforms its Administrative Hearings Processes

On September 6, the FCC released a proposed rulemaking that would streamline its administrative hearings processes by providing for hearings on written records. The proposed rulemaking states:

In our experience, disputes in Commission proceedings typically involve criticisms by one party of the evidence proffered by another party or the legal significance of that evidence, not actual conflicts in testimony between two witnesses concerning outcome determinative facts. 

This proposed agency process reform is strong on the merits. If adopted, this reform would reduce costs to parties as well as administrative delays in decisionmaking. 

For discussion of other agency process reform proposals, including reforms proposed in Congress, see blog posts by Free State Foundation President Randolph May, available here and here.

FCC Commissioner O'Rielly Calls Out Montana's Misuse of 911 Tax Dollars

If states charge consumers taxes for 911, then every tax dollar collected ought to be directed to 911-related services. Yet, as I explained in a January 2019 blog post, some states divert large amounts of 911 tax dollars to completely unrelated matters. That blog reviewed the FCC's 10th Annual Report on State 911 Taxes, which identified individual states that spent some $285 million in 911 tax dollars on non-911 purposes in 2017. 

On September 9, FCC Commissioner Mike O'Rielly sent a letter to Montana's Governor Steve Bullock in which he stated that, according to 2018 filings, "Montana's operating statute allows such diversion, permitting the Montana Legislature transfer for functions unrelated to 9-1-1 communications and the corresponding answer centers." Commissioner O'Rielly requested that Gov. Bullock "initiate a process to reverse this blatant misappropriation of funds and provide a firm commitment that such practice will not occur again."

Montana was identified in the FCC's 10th Annual Report for diverting about $2 million in 911 tax dollars to other things. Other states listed in the report diverted even more. Commissioner O'Rielly is right about what's wrong with deliberately misusing 911 tax revenues. Continuing to call public attention to states' misuse of those revenues is one important means of addressing the problem. But repeated warnings should not be allowed to continue unheeded. As I mentioned in my blog post, the Commission should be prepared to follow through on report warnings that states diverting 911 tax revenues may be ineligible for matching federal grant awards.

A Principled Call for a National Consumer Privacy Protection

On September 10, Business Roundtable sent a letter signed by 31 CEOs to leaders of Congress, calling for a comprehensive consumer data privacy law. The letter states:

Consumers should not and cannot be expected to understand rules that may change depending upon the state in which they reside, the state in which they are accessing the internet, and the state in which the company’s operation is providing those resources or services. Now is the time for Congress to act and ensure that consumers are not faced with confusion about their rights and protections based on a patchwork of inconsistent state laws. 

Accompanying the letter, the Business Roundtable released a "Framework for Consumer Privacy Legislation." The Framework includes a set of principles regarding protections for consumers and requirements for responsible collection, use, and sharing of personal information by businesses. It endorses a national consumer privacy law that would pre-empt state and local government provisions regarding data collection, use, and sharing. And it provides for the Federal Trade Commission (FTC) to be the enforcer of the national consumer privacy law, with State Attorneys General being permitted to bring enforcement actions in federal court in certain instances. Also, the national consumer privacy law would not provide a private right of action. Congress ought to take seriously the principles contained in the Framework in establishing a national consumer privacy law.

Many of the principles and concepts touched on in the letter and Framework were addressed at the Free State Foundation's privacy policy seminar, held on June 26, 2019. The seminar was titled: "Privacy Regulation: Why, What, and When?" The seminar included a keynote address by FTC Commissioner Noah Phillips, a panel discussion, and a closing keynote by Senator Marsha Blackburn. The YouTube video of FSF's privacy policy seminar may be found here. 

For several years, Free State Foundation President Randolph J. May and I have recommended a uniform federal standard to protect consumer privacy on the Internet. For further discussion of privacy policy see FSF Board of Academic Advisors member Theodore Bolema's Perspectives from FSF Scholars paper: "Protecting Privacy on the Internet: Key Principles for Any Reform." 

After NTIA's Report, the FCC Should Act on Ligado's Spectrum Proposal

On August 30, NTIA released its first "Annual Report on the Status of Spectrum Repurposing." The report overviews "existing efforts and planned near- to mid-term spectrum repurposing initiatives." This includes 30 MHz of L-Band spectrum that Ligado Networks has proposed to repurpose for hybrid terrestrial-satellite network operations. In describing "Next Steps" for that valuable but currently unused L-Band spectrum, NTIA's report states: "The FCC will issue a determination on the applicant’s pending modification applications." 

The upshot of NTIA's report for Ligado's L-Band spectrum is the recognition that the ball is now in the FCC's court. Now the Commission ought to take decisive action on Ligado Networks' amended applications to deploy its wireless terrestrial network. On several occasions, Free State Foundation President Randolph May and I have called for an agency decision on Ligado's modified applications. And we have pointed to the potential economic benefits – potentially between $250 and $500 billion – that would result from putting Ligado's L-Band spectrum into use for delivering Internet-of-Things (IoT) services and other advanced uses for business enterprises. 

Indeed, Ligado filed a June 2019 petition seeking prompt action on its proposed terrestrial wireless network pursuant to Section 7 of the Communications Act. As Randolph May and I have stated, "Ligado presents a strong case that its proposed hybrid network fits within the Section 7 definition of new technologies and services." Putting more spectrum into commercial use for advanced services is mission critical for the U.S. economy. With NTIA's acknowledgement that Ligado's modified applications now await an FCC determination, the Commission should act promptly to render a decision.

FCC to Vote on Proposed Rules to Stop Access Arbitrage Schemes

At its September 26 public meeting, the FCC will vote on a proposed rulemaking to eliminate access stimulation arbitrage schemes. I called attention to this proposal in a May 2018 blog post. There is no good reason for the Commission to permit abuses of the intercarrier compensation system such as access stimulation. The Commission's proposed rule changes are sensibly targeted to the problem and deserve agency approval.