Maryland Governor Hogan Announces Rural Broadband Funding

Maryland Governor Larry Hogan has announced $9.9 million in available funding as part of the first wave of a five-year plan to provide 225,000 Marylanders in rural communities with reliable, Internet access.

Read the press release here announcing the funding and the details of Maryland's five year plan for expanding broadband access in rural areas.

A Summer Reading Recommendation for FCC Commissioner Rosenworcel

If FCC Commissioner Jessica Rosenworcel is still looking for some late summer reading, I have a recommendation, and one that ought to give her pause – a pause at least long enough to prod her to do some rethinking. I have in mind the Wall Street Journal's article, "The Truth About Faster Internet: It's Not Worth It," published on August 20.

The gist of the article is this: Most broadband consumers are using only a small portion of the bandwidth that they purchase from their Internet service providers, even when they are simultaneously streaming multiple videos from Netflix, Amazon Prime, and the like. The article reviews the marketing practices of the ISPs, which currently advertise speeds in the range of 250, 500, and 1000 megabits per second, and concludes: "But for a typical household, the benefits of paying for more than 100 megabits a second are marginal at best, according to the researchers."

The Journal article was based on a study conducted by 53 of its own journalists, in coordination with researchers at Princeton University and the University of Chicago. So, the sample was not large, and I'm not vouching for the reliability of the study or suggesting it should be considered the "last word" on the subject. In the still rapidly evolving, technologically dynamic broadband world, we are far from a "last word," and will be for a long time. Nevertheless, some of the conclusions are interesting and perhaps surprising – and warrant consideration by Commissioner Rosenworcel and other policymakers. 

The WSJ reports:

"Our panelists used only a fraction of their available bandwidth to watch streaming services including Netflix, Amazon Prime Video and YouTube, even simultaneously. Quality didn't improve with much higher speeds. Picture clarity was about the same. Videos didn't launch quicker."

And this:

"We found similar results across our 34 testers who ran five, six or seven streams at once. The eight users with speeds 100 Mbps or higher who had seven streams going used only about 7.1 Mbps of capacity, on average."

Now back to Commissioner Rosenworcel. As you may know, for many years she has urged that the FCC's general threshold for defining "broadband" – now 25 Mbps for downloads – be increased to 100 Mbps.

Here is only a small sampling of her statements:

2016: "I think we need to go big and be bold.  I think our new threshold should be 100 Megabits—and Gigabit speed should be in our sights." 2016 Broadband Progress Report, GN Docket No. 15-191, released January 29, 2016.

2018: "It’s past time for the FCC to go big and update its national broadband standard from 25 Megabits to 100 Megabits." 2018 Broadband Deployment Report, GN Docket No. 17-199, released February 2, 2018.

2019: "It's time for the FCC to adopt a 100 Megabits per second standard and set Gigabit speeds in our sight." 2019 Broadband Deployment Report, GN Docket No. 18-238, released May 29, 2019.

Most of these statements and others to like effect by Commissioner Rosenworcel are accompanied by a claim that adoption of anything less than a 100 Mbps definition of broadband by the Commission "shortchanges our children." Of course, making broadband deployment and availability as ubiquitous as possible and reducing any remaining digital divides is an important goal for federal and state policymakers. Under FCC Chairman Ajit Pai's leadership, the agency has undertaken important initiatives to further this goal. Indeed, in the first paragraph of its 2019 Broadband Deployment Order, the Commission reiterated that "it has made closing the digital divide between Americans with, and without, access to modern broadband networks its top priority."

And many Internet service providers themselves have undertaken their own private sector initiatives to address the goal of ubiquitous availability of broadband. In this regard, I recently took note of another significant expansion of Comcast's "Internet Essentials" program that subsidizes broadband service for low income families, seniors, and veterans, as well as providing support for computers and digital literacy to these groups.

The WSJ report makes clear that a family – including children in the family – can stream six or seven videos simultaneously using a fraction of the 100 Mbps definitional threshold that Commissioner Rosenworcel, for years, has advocated. I don't know with any certainty, but I suspect that Commissioner Rosenworcel doesn't believe children are being "shortchanged" because they can't stream enough videos – because clearly, even with 25 Mbps service, they can.

So, you might wonder what's behind Commissioner Rosenworcel's advocacy to raise the threshold definition of broadband to at least 100 Mbps. It's pretty simple, really. With a higher 100 Mbps threshold in place, she wants to bolster her claim, wrongful in my view, that broadband is not being deployed on a "reasonable and timely" basis, a determination that the Commission is required to make periodically pursuant to Section 706 of the Telecommunications Act of 1996. Moreover – voila! – by applying a 100 Mbps standard rather than 25 Mbps, there would be fewer competitors offering "broadband" service under the revised definition, although the differential between the two in terms of service offerings is decreasing rapidly.

In other words, the redefinition of what constitutes "broadband" service almost certainly would be used by Commissioner Rosenworcel to claim that it is necessary to regulate broadband as a public utility in order to ensure its reasonable and timely deployment. And it would be used to claim, with the move to the higher threshold, that any reduction in the number of "competitors," however magically derived, justifies more regulation.

To be sure, the way to deployment of ever more ubiquitous broadband, at ever faster speeds, is not down the road marked "More Regulation," especially public utility-like regulation of broadband like Commissioner Rosenworcel consistently has advocated. The evidence shows that path only discourages more investment and innovation.

I don't begrudge Commissioner Rosenworcel touting her own boldness or urging her colleagues to be "bold," as she does in each of her statements above. There is nothing wrong with expressing hortatory aspirations about the future, and, in fact, it's admirable for policymakers to look ahead in attempts to account for the future. What's wrong is to suggest that, in the here and now, nothing less than 100 Mbps qualifies as broadband service.

The WSJ report should give Commissioner Rosenworcel some pause in that regard because I don't think she wants to be in the position of advocating that consumers should be cajoled into purchasing more broadband than they need to satisfy their present demands.

And when you get right down to it, shouldn't it be actual consumer demand as expressed in the marketplace, rather than aspirational expressions by government officials touting the fastest possible service, that frames the way public policymakers think, realistically, about broadband regulatory policy?

State Attorneys General and Voice Providers Reach Accord to Address Robocalls

As widely reported, all 50 state attorneys general and 12 major voice service providers have signed an agreement to combat illegal and unwanted robocalls and caller ID spoofing. The agreement provides for state AG cooperation with voice service providers that implement eight "anti-robocall principles." Those principles are: Offer Free Call Blocking and Labeling; Implement STIR/SHAKEN; Analyze and Monitor Network Traffic; Investigate Suspicious Calls and Calling Patterns; Confirm the Identity of Commercial Customers; Require Traceback Cooperation in Contracts; Cooperate in Traceback Investigations; and Communicate with State Attorneys General. 

Op-Ed Connects Federal Regulatory Policy and 5G to National Security

In a just-published op-ed at Townhall.com, Law professor and national security expert incisively addresses the importance of pro-innovation and pro-market policy in advancing 5G networks, including the T-Mobile/Sprint merger, in the context of U.S. economic and national security interests. Professor Jaffer's op-ed, "Stoking Innovation in a Trade War: Reestablishing American Leadership in Critical Technologies," is worth a careful read.

Roundup on Latest Actions to Combat Unwanted Robocalls

A lot is happening on multiple fronts to reduce the high volumes of unwanted and scam robocalls. Here's a sample:

Congress: On May 23, 2019, the Senate passed the TRACED Act, which would enhance the FCC's authority to stop caller ID spoofing and unwanted robocalls. I discussed the legislation in a prior blog post. And on July 24, 2019, the House passed similar legislation, the Stopping Unwanted Robocalls Act (H.R. 3375). 

FCC: On August 5, 2019, the FCC released an order that adopts new rules for combatting caller ID spoofing and unwanted robocalls that originate overseas. 

Industry: On August 14, 2019, T-Mobile and AT&T announced a partnership for implementing cross-network caller ID verification based on SHAKEN/STIR standards in order to tackle caller ID spoofing. In a prior post, I described a similar cross-network agreement between T-Mobile and Comcast. And in July 2019, AT&T announced it would make automatic robocall-blocking technology available to its subscribers as a free feature of AT&T's Call Protect program. 

Professor Lyons Analyzes Court Decision's Impact on 5G Deployment

Professor Daniel Lyons, a member of the Free State Foundation's Board of Academic Advisers, has written a new Perspectives from FSF Scholars paper analyzing an important court decision impacting 5G deployment. In "D.C. Circuit Decision Represents Setback to Next-Generation Network Deployment Efforts," Professor Lions reviews what United Keetoowah Band of Cherokee Indians in Oklahoma v. FCC(2019) means for 5G wireless infrastructure deployment and he also offers his insights on the D.C. Circuit's reasoning. 

As FSF scholars have long maintained, antennas and other small cell infrastructure pose little to no discernable impact, particularly compared to macro towers and base stations. Installation of small cell equipment deserves a more streamlined treatment by federal, state, and local governments.

Environmental and historical preservation reviews of small cell infrastructure has previously been the subject of prior legislation in Congress, including the SPEED Act. However, such legislation never passed. Following the D.C. Circuit's decision in United Keetoowah Band, the 116th Congress should seriously consider similar legislation aimed to accelerate 5G deployment. 

Regulation (or Not) of Social Media

With all the current discussion regarding whether and, if so, how social media might be regulated, I want to point you to a resource with a  website with various resources on the subject. You'll see the home page features a proposal for a FINRA-like largely self-regulatory model. And it contains a number of other resource materials on the subject.

The CRE site is run by Jim Tozzi, someone with a lot of regulatory expertise and policy chops, so if you're interested in the discussion and debate regarding regulating social media, Jim's website is certainly worth checking out, regardless of your current views.

Wireless Market Entrants Gaining Subscribers in First Half of 2019

In public comments by the Free State Foundation in the T-Mobile/Sprint merger proceeding, FSF President Randolph May and I explained that "recent wireless market entry by Comcast and Charter and potential entry from other entities [] provides choices for consumers as well as competitive checks against anticompetitive conduct in the market." Our comments continued:

Comcast launched its Xfinity Mobile service in April 2017. The service for mobile wireless voice calling, texting, and mobile data relies on Comcast’s network capacity – including 18 million Xfinity Wi-Fi hot spots – in combination with network capacity leased from Verizon Wireless for out-of-area voice and data transmission. Xfinity Mobile enrolled 577,000 subscribers through the first quarter of 2018. Analysts have predicted new subscriber numbers will continue climbing. It is reported, for instance, that New Street Research expects Comcast’s new enrollments to sharply increase during the second half of 2018 and that Xfinity Mobile subscribership could reach 2 million connections within the near future. Meanwhile, Charter has announced the introduction of a similar hybrid Wi-Fi/cellular mobile wireless service called Spectrum Mobile. 

On July 25, 2019, Comcast reported that its Xfinity Mobile service had nearly 1.6 million wireless subscriber lines at the end of the second quarter of this year.  And on July 26, Charter reported significant subscriber growth during the second quarter of this year, with Charter serving 518,000 mobile lines by the quarter's end. These subscriber numbers point to both the present reality and potential for cable hybrid Wi-Fi/Cellular mobile wireless services to provide consumers with competitive service choices.

Connolly Paper Analyzes Excessive Pole Attachment Rates

Dr. Michelle Connolly, a former Chief Economist at the FCC and a current member of the Free State Foundation's Board of Academic Advisers, has published a paper titled "The Economic Impact of Section 224 Exemption of Municipal and Cooperative Poles." Muni and co-op pole owners are exempt from rate limits established under Section 224 of the Communications Act. Dr. Connolly's paper found that municipal and electric co-op pole attachment rates are more than double or triple rates charged by investor-owned utilities. 

As Dr. Connelly explains: 

Because local regulations require that firms attaching to poles use existing utility facilities rather than install their own, removal of the Section 224 exemption for Coops and Munis is needed to prevent them from charging monopoly level pole attachment rates. Moreover, making these pole owners subject to the general Section 224 framework would create greater consistency in expectations over future pole attachment rates, reduce uncertainty and help increase overall investment in all communications networks that must rely on pole attachments. Such changes can be expected to offer particular benefits to rural areas where on average more poles must be passed to reach each consumer, and to competitive fairness as Coops and Munis would be prevented from using excessive rates which skew investments by broadband providers away from the areas in which the Coops and Munis are located. 

This issue is even more important now that a number of municipalities and electricity co-ops have expressed interest in moving into the broadband market. Electricty co-ops, in particular, have sought to not only provide broadband Internet service but to obtain financing through taxes, bond issues, or subsidies, including the Universal Service Fund. A number of states have passed or considered legislation going that would authorize their electric utilities to enter the marketplace as a broadband Internet service provider. 

I asked NCTA's Executive Vice President James Assey about this issue at the Free State Foundation's Eleventh Annual Telecom Policy Conference, held in Washington D.C. on March 26, 2019. Here is Mr. Assey's response:

With respect to electricity co-ops, the one glaring issue that really needs congressional action in addressing is the fact that they still have an exemption from the pole attachment regime that was set up. Back at the time the exemption was created, the thought was that pole attachment rates charged by municipal providers or co-ops were very low and that there were going to be incentives that they would stay low. And we have seen in actual practice that flipped on its head. It is hard for me to imagine a Congress and an FCC allowing co-ops to enter the business of broadband and being able to charge super-competitive rates for pole attachments that are different from the federal framework. So if co-ops are going to go into the business, that exemption needs to go. 

Dr. Michelle Connolly's paper is worth reading and considering. It is available online here.

Trade Agreements Should Not Export Ineffective Copyright Laws

On August 6, 2019, Representatives Frank Pallone, Jr. and Greg Walden, the Chairman and Ranking Member of the House Committee on Energy and Commerce, sent a letterto U.S. Trade Representative Robert Lighthizer expressing their concern that the proposed United States-Mexico-Canada Agreement (USMCA) contains a provision (Article 19.17) that mirrors Section 230 of the Communications Decency Act. Section 230 shields online services from some of the liability associated with third-party content posted on the services. As Chairman Pallone and Ranking Member Walden observe, "the effects of Section 230 and the appropriate role of such liability shield have become the subject of much debate in recent years."

In light of the ongoing debate in the U.S. regarding Section 230, Congressmen Pallone and Walden state:

"While we take no view on that debate in this letter, we find it inappropriate for the United States to export language mirroring Section 230 while such serious policy discussions are ongoing. For that reason, we do not believe any provision regarding intermediary liability protections of the type created by Article 19.17 are ripe for inclusion in any trade deal going forward."

Like Chairman Pallone and Ranking Member Walden, I don't take any position here on the current debate surrounding Section 230.

But their letter does readily call to mind a similar point made by my Free State Foundation colleague Seth Cooper in his April 2019 Perspectives from FSF Scholars titled, "Trade Agreements Should Include Stronger Online Copyright Protections." In his paper, Seth points out that the USMCA's Article 20.J.11 incorporates provisions that are based on Section 512 of the 1998 Digital Millennium Copyright Act. Section 512 is the provision that contains a "notice and takedown" process addressing when online service providers can receive limited liability protections for infringing content and activity on their websites. In other words, like Section 230, Section 512 is a statutory provision limiting the liability of online provider intermediaries.

In his Perspectives, Seth explains why Section 512, geared to 1990s dial-up Internet technologies, "takes a decidedly un-modern approach to online copyright infringement that takes place on user-upload websites." And he explains there, as Seth and I have previously in "Modernizing International Agreements to Combat Copyright Infringement" and elsewhere, why Congress needs to modernize Section 512 in order to protect copyright holders from rampant infringement. Inclusion of Article 20.J.11 in the USMCA agreement, mirroring as it does Section 512, risks perpetuating the deficiencies in the current under-protective notice-and-takedown system that prevails in U.S. copyright law.

Therefore, Seth's April 2019 Perspectives concluded, in language that bears repeating:

"Absent clarification, inclusion of Section 512-like terms in the USMCA also risks limiting Congress' ability to modernize U.S. copyright law to better combat online infringement….[T]he Administration and Congress should make clear that the USMCA's online infringement provisions are not precedent for future trade agreements. Statements of administrative action by the U.S. Trade Representative expressly should affirm that Article 20.J.11's provisions are limited to the USMCA itself.

Going forward, Section 512-like terms – as least as long as Section 512 remains un-modernized – should not be included in U.S. trade agreements. In the face of this century's technological advances, the U.S. should not let international agreements bind Congress by chaining copyright enforcement to last century's technological assumptions."

Indeed, this is the same point made by Representatives Pallone and Walden in their letter with regard to Section 230. The same logic applies to the USMCA's provision mirroring Section 512.

In sum, Congress needs to reexamine Section 512 as a matter of modernizing U.S. domestic law to reduce illegal copyright infringement. And in face of such reexamination, going forward, U. S. trade agreements should not export provisions containing Section 512-like terms.

The FCC is Finally Undoing its Unbundling Regulation

On August 2, the FCC released its order granting forbearance relief from legacy telephone "unbundling" regulation. The order puts an end to requirements that certain legacy telephone companies provide their competitors analog voice-grade copper loops on an unbundled basis at government-set rates. Free State Foundation scholars, including President Randolph May, have long pointed to the disincentive for network investment that results from forced sharing mandates tied to rate regulation, and also have long called for the end of unbundling regulation. 

To the FCC's credit, its order recognizes that market changes have rendered legacy copper-based telephone networks increasingly obsolete. Its order also recognizes that there is no warrant for prolonging the life of unnecessary and costly unbundling regulation. As the order points out, in 1996, Time Division Multiplexing (TDM) using traditional copper wires was the dominant technology for providing voice services, and incumbent local exchange carriers (LECs) were the dominate providers of local voice service. But dramatic market changes, including the rise of interconnected VoIP services offered by traditional cable companies, as well mobile and fixed wireless services, have dramatically altered the voice services market. Residential and business consumers have a number of choices that didn't exist in 1996. According to the order: 

Commission data reflect that between December 2008 and June 2017, the TDM share of all wireline voice telephone connections, including both switched access lines (POTS) and interconnected VoIP, fell from 82% to 37%, while the number of interconnected VoIP connections increased by almost 300% over the same period. Further, residential reliance on traditional switched access services fell by 71%, while residential interconnected VoIP subscriptions increased by 104%. Similarly, over this same time period, business reliance on traditional switched access services fell by 49%, while business interconnected VoIP subscriptions increased by over 1,062%. This is due to a number of factors, including a shift in both consumer and supplier choice to migrate to other types of communications networks such as fiber or wireless.

The order sets a timetable for ending its unbundling mandates, enabling competing providers and those customers still using the older analog copper wire technologies to transition to newer alternatives. Additionally, the order forbears from enforcing against certain legacy telephone providers so-called Avoided-Cost Resale obligations. Under those obligations, legacy providers must resell their retail services at wholesale, and at regulated rates, to their competitors. As the order observes, those obligations largely benefit competitors serving business customers. 

The costs of maintaining analog telephone networks and complying with legacy regulation such as unbundling mandates divert market provider resources away from investment in next-generation networks. At long last, this forbearance decision by the FCC will enable market providers to direct more of their resources to higher quality services for retail and business customers in the Digital Age. 

Comcast Significantly Expands Its Internet Essentials Program

In an era of contention over policy and politics, there is widespread agreement among policymakers and politicians regarding the manifest importance of access to the Internet and use of the Internet as we go about our daily lives. That importance – when it comes to enhancing our educational prospects, our employment opportunities, our relationships among family and friends, and so much more – needs no elaboration.

And, fortunately, there is widespread agreement regarding the importance of making high-speed Internet access available on a ubiquitous basis, so that, to the extent possible, existing "digital divides" are eliminated, or at least reduced. With that in mind, in the past, I have acknowledged the contribution of Comcast's Internet Essentials program to the cause of making broadband Internet access more widely available to low income persons, while, at the same time, funding programs that subsidize the purchase of computers and support digital literacy.

During its eight years of existence, Comcast has continued to expand the Internet Essentials program from its initial focus on families with children eligible for a free lunch under the National School Lunch Program. Please see my blogs, Comcast's "Internet Essentials Program Milestones and Enhancements" (2017) and "Comcast's Internet Essentials Plays An Essential Role" (2018), for a description of the ongoing program enhancements, such as expansion of eligibility to low-income seniors and veterans, just during the past two years. 

Now, with its latest announcement today, Comcast is once again enhancing the Internet Essentials program, and in a significant way. It is expanding program eligibility to include all qualified low-income persons in its service area. Comsast says the expansion will increase the number of eligible low-income households by three million – this on top of the two million households already connected. Before today's announcement, Comcast says the Internet Essentials program already has connected more than eight million low-income persons.

The subsidization of the purchase of computers will continue, along with digital literacy training programs. Without these "adoption-promoting" prongs of the Internet Essentials program, the significant expansion of Comcast's support for the availability of "access" would not be nearly as effective.

By no means is Comcast the only service provider, computer or other device distributor, or other player in the Internet ecosystem that has contributed in a positive way to enhancing Internet access and adoption. Efforts by other firms in the private sector have been important and impactful.

But with its announcement today regarding the significant expansion of its Internet Essentials program, Comcast deserves our acknowledgement of its ongoing positive contribution – and our thanks.