Tuesday, October 19, 2021

Colin Powell on Speaking Freely and Faith in America


It is not necessary to agree with everything that Colin Powell ever said or did to acknowledge that this soldier, statesman, and trailblazer was a true American hero. While mourning his passing, I celebrate his life, which has much to teach us about America and the never-ending task of realizing the ideals expressed in our founding guideposts, the Declaration of Independence and the Constitution.


Last week at the celebration of the Free State Foundation's Fifteenth Anniversary, I said that our think tank's mission "is to promote, through research and educational activities, understanding of free market, free speech, limited government, and rule of law principles and to advocate laws and policies true to these principles."


While much will be said and written in the coming days regarding General Powell's various contributions to our country, here I want to focus on one that is particularly relevant to our present moment, when "Cancel Culture" runs rampant throughout much of American society, chilling the ability to think clearly and speak freely.


In May 1994, Colin Powell delivered the Commencement Address at Howard University, and I commend it to you in its entirety. At the time of his speech, Howard was embroiled in a controversy regarding its decision to allow a Black writer and member of Nation of Islam to deliver a speech containing racist and anti-Semitic statements. Here is part of what General Powell said:


"I believe with all my heart that Howard must continue to serve as an institution of learning excellence where freedom of speech is strongly encouraged and rigorously protected.


That is at the very essence and heart of a great university and there is no doubt that Howard is a great university.


And freedom of speech means permitting the widest range of views to be presented, however controversial those views may be.


The First Amendment right of free speech is intended to protect the controversial and even the outrageous word, and not just comforting platitudes, too mundane to need protection.


Some say that by hosting controversial speakers who shock our sensibilities, Howard is in some way promoting or endorsing that message – not at all. Howard has helped put that message in perspective while protecting their right to be heard, so the message can be exposed to the full light of day for comment and criticism."


Isn't it a shame that now, more than a quarter century later, so many of those in our government, businesses, media, educational institutions, and elsewhere throughout society don't understand – or have the courage to stand up for – Colin Powell's ringing endorsement of freedom of speech, and why it matters if we are to remain a free society?


In recent months, I've written four pieces in a series called "Thinking Clearly and Speaking Freely," to consider the impact of the Cancel Culture and what can be done about it. Consistent with that part of the Free State Foundation's mission devoted to promoting free speech, we will continue to address this subject. But, today, you need go no further than studying – and taking to heart – Colin Powell's words from his Howard University commencement address.


Finally, in closing, General Powell also said this to the graduating students on that day in May 1994:


"Above all, never lose faith in America. Its faults are yours to fix, not to curse. America is a family: There may be differences and disputes within the family, but we must not allow the family to be broken into warring factions. From the diversity of our people, let us draw strength and not seek weakness.


Believe in America with all your heart and soul, with all of your mind. Remember, that it remains the "last, best hope of Earth." You are its inheritors and its future is today placed in your hands."


Like his call to protect free speech, General Powell's call to never lose faith in America –and the American family writ large – could not be timelier today.


Colin Powell, RIP. 

Monday, October 18, 2021

NJ State Court Concurs: Requirement to Prorate Cable Bills Equals Preempted Rate Regulation

Last week, a New Jersey state appellate court, wisely siding with two federal district courts, held that requiring cable operators to prorate last-month bills constitutes a form of rate regulation that is preempted by federal law.

Section 623(a)(2) of the 1984 Cable Act unambiguously states that, upon a determination by the FCC that a cable operator is subject to effective competition, "the rates for the provision of cable service by such system shall not be subject to regulation." Section 636(c), meanwhile, expressly preempts any provision of law that is inconsistent with Section 623(a)(2) (as well as with Section 623(a)(1), which states that "[n]o Federal Agency or State may regulate the rates for the provision of cable service except to the extent provided under this section.").

Nevertheless, and as I wrote in an April 2021 Perspectives from FSF Scholars, "State Cable Bills Prorating Requirements Clearly Are Preempted," two states – Maine and New Jersey – have attempted to require cable operators, and cable operators alone, to charge customers for service on a per-day basis.

Fortunately, in both cases a federal district court intervened.

In March 2020, Maine passed Public Law Ch. 657, "An Act To Require a Cable System Operator To Provide a Pro Rata Credit When Service Is Cancelled by a Subscriber." It states that a cable operator "shall grant a subscriber a pro rata credit or rebate for the days of the monthly billing period after the cancellation of service if that subscriber requests cancellation of service 3 or more working days before the end of the monthly billing period."

In an October 2020 opinion, the U.S. District Court of Maine held that obligation to be "unambiguously preempted" by the 1984 Cable Act. Specifically, the court concluded that a mandate to prorate last-month bills effectively requires cable operators to bill on a per-day basis, and therefore is a form of rate regulation preempted by Section 623(a)(1) – not a consumer protection law or customer service standard for which Section 632 creates an exception to the general rule.

For additional information on that decision, please read "Maine Cable Law, Ignoring Competition, Is 'Unambiguously Preempted'," a Perspectives from FSF Scholars published later that same month.

In March 2021, the District Court of New Jersey considered a challenge by Altice to Section 14:18-3.8 of the New Jersey Board of Public Utilities' (BPU) rules, a provision that that court found to be "virtually identical" to Maine Public Law Ch. 657. In an opinion that quoted extensively from the Maine District Court's decision, it not surprisingly reached the identical conclusion.

In addition to filing suit in federal district court, Altice also appealed the cease-and-desist order issued by the New Jersey BPU to the Superior Court of New Jersey, Appellate Division. On October 15, 2021, in an unpublished opinion, that court embraced the reasoning of the New Jersey District Court (and, by extension, the Maine District Court) and invalidated the BPU's cease-and desist order.

Notably, in both of these instances the prorated billing requirement applies exclusively to cable systems. Rival Multichannel Video Programming Distributors (MVPDs), including satellite operators, telco TV providers, and "virtual" MVPDs that distribute content over the Internet, a growing category that includes YouTube TV, Sling TV, and Hulu + Live TV, are free to bill on a monthly basis – a practice that many in fact have embraced.

As such, these court decisions, at the federal and now state levels, don't merely affirm the intent of Congress. They also serve to remove arbitrary barriers that impact only one segment of the video distribution marketplace.

Given the ever-growing prominence of streaming services (Netflix, Hulu, Amazon Prime Video, Disney+, Apple TV+, HBO MAX, and countless others), it is appropriate that regulations premised upon (at best) outdated assumptions be eliminated at every opportunity.

The Videos Celebrating the Free State Foundation's Fifteenth Anniversary Are Now Available!


Tweet: #FSSF15Anniversary


Thanks to everyone who attended the Free State Foundation's Fifteenth Anniversary Gala Lunch on October 15 at the National Press Club in Washington, DC. It was a wonderful celebration of this special anniversary milestone for FSF. Importantly, it was also a celebration of our ability to gather together again, in person, with friends.

The first video below, "FSF's Fifteenth Anniversary Gala Celebration," shows the entire event, beginning with the Welcome and Introduction by Free State Foundation President Randolph May and including the remarks of our in-person speakers FCC Commissioners Brendan Carr and Nathan Simington, former FCC Commissioner Michael O'Rielly, former FCC Cable Bureau Chief Deborah Lathen, and FSF Director of Communications Policy Studies and Senior Fellow Seth Cooper.

The second is the Special Commemorative Video shown at the Gala Lunch.


This Special Commemorative Video includes brief remarks from Richard Wiley, Mark Fowler, William Kennard, Michael Powell, Ajit Pai, Marsha Blackburn, Cathy McMorris Rodgers, Bob Latta, Greg Walden, Tom Tauke, Henry Rivera, Harold Furchtgott-Roth, Kathleen Abernathy, Meredith Baker, Robert McDowell, Karyn Temple, Jeffrey Rosen, David Gross, Blair Levin, Daniel Lyons, Michelle Connolly, David Honig, Ken Keane, Adam Mossoff, Roslyn Layton, Rob Atkinson, Tim Brennan, Bob Branson, Chris Walker, and Christopher Yoo.

Their participation in contributing to this video is greatly appreciated!

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We're grateful too that C-SPAN once again covered another of our events, this time broadcasting the speaker portion of the Fifteenth Anniversary of our event. Click HERE for the C-SPAN Video.

 Tweet: #FSF15Anniversary








Tuesday, October 12, 2021

This Friday! FSF's 15th Anniversary Celebration with Carr, Simington, O'Rielly, Lathen and More

Register Now for This Friday!

WHAT: FSF's Fifteenth Anniversary Gala Lunch Celebration


WHERE: National Press Club, Washington, DC


WHEN: Friday, October 15, 2021, 11:30 AM - 2:30 PM

The Free State Foundation invites you to join us in person to celebrate the Fifteenth Anniversary of our founding on Friday, October 15, 2021, at the National Press Club in Washington, DC. While adhering to all COVID-19 safety protocols (see note below), we are pleased to be able to hold an in-person celebration so we can share our excitement at reaching this important milestone!


Speakers include FCC Commissioners Brendan Carr and Nathan Simington, former FCC Commissioner Michael O'Riellyand former FCC Cable Bureau Chief Deborah Lathen.


In addition to the speakers, we will be showing a special commemorative video with brief remarks by former FCC Chairmen Richard WileyMark FowlerWilliam KennardMichael Powell, and Ajit Pai, and former Acting FCC Chairman and Commissioner Mignon Clyburn, along with Senator Marsha BlackburnCongresswoman 

Cathy McMorris RodgersCongressman Bob Latta, former Congressmen Greg Walden and Tom Tauke, former FCC Commissioners Henry Rivera, Harold Furchtgott-Roth, Kathleen Abernathy, Meredith Bakerand Robert McDowell, former Register of Copyrights Karyn Temple, former Acting Attorney General of the United States Jeffrey Rosenformer Ambassador David Gross, former Executive Director of the National Broadband Plan Blair Levin, and many other very special friends! And there will be a "blast from the past" photo montage!


As we look back with pride at the past fifteen years, we will look forward, with confidence, to the years ahead, knowing that there is much work yet to be done in the cause of advancing free market, property rights-protective, and rule of law-oriented principles and policies.


A complimentary plated lunch will be served, subject to space limitations and reservations.


IMPORTANT NOTE: Please click here to see all the COVID-19 actions the National Press Club is taking to ensure a safe environment for everyone, including requiring proof of vaccination or a negative COVID-19 test result taken within 72 hours of an event. So, to be admitted to the Club, please make sure you bring a vaccination card or a photo of it on your phone or proof of a negative COVID-19 test result taken within the last 72 hours.


Tweet: #FSF15Anniversary






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The Gala Lunch is complimentary with no payment required. But we would certainly welcome any donation you care to make in honor of this important Free State Foundation milestone and, importantly, to help sustain our work going forward!


Friday, October 08, 2021

Newsom Vetoes Small Cell Bill, Fumbles His Explanation

California Governor Gavin Newsom made confusing remarks while explaining his Monday veto of SB 556, a bill for streamlining small cell deployment in California. Newsom claimed, in one breath, that SB 556 would have severely limited local government authority, but said in another it contradicted federal law – presumably the FCC’s Small Cell Order.

Newsom's remarks made little sense because SB 556 mirrors current federal policy. The FCC's Small Cell Order prevents intentional, costly delays to broadband deployment that prolong the digital divide while also preserving local authority for aesthetic and safety reviews. It bans local authorities from charging discriminatory siting fees and siting fees above objective reasonable costs, and it implements shot clocks for small cell collocation and siting on new structures.

My description of SB 556 sounds quite similar. It bans local authorities from charging discriminatory and unreasonable siting fees above a reasonable estimate of actual cost, and implements shot clocks for small cell siting. The only difference between the Small Cell Order and SB 556 is that the Order places a 60-day shot clock on small cell collocation and 90-day shot clock for siting on new structures, while SB 556 has a 45-day shot clock for both, unless there are more than 300 poles involved, at which point the shot clock extends to 60 days.

But this faster timeline in SB 556 does not conflict with federal law, as Newsom suggests. The FCC derives its authority to implement shot clocks from 47 U.S.C. § 332 (c)(7). Section 332(c)(7)(A) expressly preserves local authority for siting decisions, subject to limitations found in the next section. One of these limitations, found in Section 332(c)(7)(B)(ii), is the requirement that local governments act on wireless siting applications "within a reasonable period of time after the request is duly filed with such government or instrumentality, taking into account the nature and scope of such request."

The Small Cell Order establishes that shot clocks of 60 days for collocation and 90 days for new structure siting are presumptively reasonable for meeting the "within a reasonable period of time" requirement in Section 332(c)(7)(B)(ii). Given that the purpose of shot clocks is preventing delay, state laws with faster shot clocks are presumptively reasonable too. Indeed, nothing in the Small Cell Order prohibits states from requiring cell siting permit decisions faster than the FCC's shot clocks. How could timelier decisions by local governments regarding cell siting pose a conflict with federal policy favoring timelier decisions?

Which brings us back to Governor Newsom's confusing remarks. I've established that SB 556 comports, not conflicts, with federal law. Newsom's other stated reason for vetoing SB 556 is that it's too restrictive on local authority. We can infer, then, that Newsom also thinks the Small Cell Order is too restrictive on local authority since it is barely different from SB 556.

Maybe his remarks aren't so confusing after all. Newsom could be hoping that a future FCC might repeal the Small Cell Order, and without SB 556 in place, California localities could once again use dilatory tactics and punitive fees to prevent or slow broadband deployment. Commissioner Carr wrote in the Bay Area outlet Mercury News about how San Jose's government did just this.

Local government policies that slow or stop broadband deployment are a serious contributor to the digital divide. The Small Cell Order discusses this phenomenon. Highly populated municipalities have an incentive to charge above-cost fees for siting and right-of-way access because broadband providers make the most money from densely populated areas. Absent regulation preventing these fees, incumbent broadband providers will likely pay them because they need to access the densest swaths of customers. But such excessive fees are a deterrent to new entrants. And in all cases, the fees drain broadband providers' funds for capital investment, slowing next generation broadband rollouts in smaller metros and especially rural areas, which are tougher to serve due to lower density. Meanwhile, smaller metros and rural areas don't have the incentive to charge high fees because they need more broadband. When fees are set to cover reasonable costs and no more, providers have more money to deploy better broadband to everyone at a faster pace.

Deployment delays also cause other economic harms. Boston Consulting Group's February 2021 report estimates that 5G infrastructure buildout will directly contribute $400-500 billion to U.S. GDP and create up to 1 million jobs over the coming decade. But it also estimates nationwide losses of $25 billion in potential benefits for every 6-month stall in 5G deployment. SB 556 would have usefully complemented the Small Cell Order, helping to ensure our country enjoys the full economic benefits of 5G.

Government Newsom's veto of SB 556 is disappointing, especially given that 32 other states have passed similar measures in bipartisan efforts, Pennsylvania being the most recent. This is now the second time a California governor has vetoed sound small cell legislation: former Governor Jerry Brown also vetoed a bill supported by Free State Foundation scholars. Hopefully the third time will be the charm.

Wednesday, October 06, 2021

Sixth Circuit Challenge to USF Highlights Nondelegation Issues Identified by FSF Scholars

In a recent petition for review at the Sixth Circuit Court of Appeals, Consumers’ Research and other groups challenge the administration of the Universal Service Fund (USF) by the private Universal Service Administrative Co. (USAC), in conjunction with the FCC's supervision, as an unconstitutional delegation of congressional power. In other words, these petitioners argue the USF violates the nondelegation doctrine.

This challenge follows comments from the same petitioners making the same arguments submitted to the FCC’s Proposed Fourth Quarter 2021 Universal Service Contribution Factor proceeding. Petitioners’ main argument is that Congress’s delegation of legislative and taxation powers to the FCC, which the FCC then delegates to USAC, a private corporation, is unconstitutional. Additionally, petitioners also argue that Congress’s delegation of appointment power over the USAC Board of Directors to the FCC Chairman is unconstitutional. In the alternative, petitioners argue that the FCC exceeds its statutory authority and violates the APA in its administration of the USF.

Free State Foundation President Randolph May and Senior Fellow Seth Cooper previously raised similar nondelegation concerns regarding the USF, urging Congress to appropriate USF funding instead of delegating taxing powers to the FCC. May, an administrative law scholar, has long called for an interpretation of the nondelegation doctrine with more vitality. In a 2001 article for the Federal Communications Law Journal, May argued that the Communications Act’s "public interest" standard is far too vague to be a lawful delegation of power. More recently, May commented on the last nondelegation case at the Supreme Court, Gundy v. United States, hoping Gundy signaled a move "some steps closer to the Framers' original constitutional understanding" of separation of powers.

As the chart above shows, consumers are now subject to nearly a 30% surcharge tacked on to all their traditional telephone calls. Free State Foundation scholars have long supported reform of the Universal Service subsidy regime. For example, Free State Foundation Academic Advisor Justin (Gus) Hurwitz recently discussed USF reform, calling for "a rethinking and substantial reworking of our approach to our Universal Service commitment in telecommunications." And Senior Fellow Andrew Long highlighted FCC Commissioner Brendan Carr’s innovative plan to fund universal service through Big Tech platform ad revenues. President Randolph May, writing in the Yale Journal on Regulation just this week, says Commissioner Carr's proposal is worthy of serious consideration and would be a good candidate for an FCC Notice of Inquiry.

Tuesday, October 05, 2021

FSF President Randolph May Recommends the FCC Issue More NOIs

Be sure to check out Free State Foundation President Randolph May's opinion piece published on October 4 in the Yale Journal on Regulation's "Notice & Comment" blog. Titled "The FCC Should Revive Notice of Inquiry," the pieceexplains why the Commission might use Notices of Inquiry (NOIs) more often than it has in recent years.

Along the way, President May highlights the FCC's Notice of Inquiry, "Spectrum Requirements for the Internet of Things" that was issued on September 30. And at the end, he suggests that Commissioner Brendan Carr's idea for requiring fees from Big Tech to contribute to broadband infrastructure deployment and maintenance might be a good candidate for a Notice of Inquiry. 

Monday, October 04, 2021

FCC Set to Begin 3.45 GHz Spectrum Band Auction

On Tuesday October 5, the FCC will commence its public auction for spectrum in the 3.45-3.55 GHz band. Bevin Fletcher's October 1 article at FierceWireless spotlights some analyst predictions about the prospective bidders and winning bid amounts. As the article points out, the 3.45 GHz auction is "the last major near-term opportunity for auctioned mid-band spectrum." 

My Perspectives from FSF Scholars from February 18 of this year explained that this auction needs to be followed up as soon as reasonably possible with additional FCC auctions for lower 3 GHz band spectrum:

Combining 3.35-3.45 GHz spectrum with C-band, CBRS, and other adjacent 3 GHz spectrum could create a contiguous block of 630 MHz for 5G services. Additional lower 3 GHz spectrum can later be repurposed for commercial use, either on an exclusive or shared basis. Unless the FCC and other federal agencies cooperate and act fast to restock the mid-band spectrum supply, opportunities for creating new jobs and economic growth will be diminished. And the U.S. will risk China and other global competitors surpassing the U.S. in the race to lead in 5G.