The Case for IP Captioned Telephone Service Reform

Free State Foundation President Randolph May makes the case for refashioning the Internet Protocol Captioned Telephone Service (IP CTS) in a market-oriented way in his latest Perspectives from FSF Scholars paper, "Reforming the FCC's Captioned Telephone Service Program." As explained in that paper, "IP CTS is a form of telecommunications relay service (TRS) that allows individuals with a hearing impairment to both read captions and use their residual hearing to understand a telephone conversation. Provision of IP CTS is undoubtedly important, and it is also a statutory duty under the Communications Act. Additionally, Mr. May offered a more detailed analysis and prescription for IP CTS reform in his previous and similarly-titled Perspectives paper, "Reforming the FCC's Internet Protocol Captioned Telephone Service Program." 

The FCC Should Encourage Further Progress in 5G Infrastructure Siting

On September 25, TRDaily reported on FCC Commissioner Brendan Carr's remarks at the 8th Annual Americas Spectrum Management Conference. According to TRDaily reporter Paul Kirby's account, Commissioner Carr stated that FCC orders for streamlining wireless infrastructure siting have produced "dramatic results," including an increase in small cells from 13,000 in 2017 to 60,000 last year – with a total of close to 200,000. In a panel discussion that followed, CTIA's Scott Bregmann reportedly cited an estimate that over 800,000 small cells would be needed by 2026. Apparently, 28 states have adopted laws for streamlining deployment of small cells.

In 2017, FSF President Randolph May and I filed public comments urging the FCC to adopt rules to accelerate deployment of small cells needed for 5G (and for 4G network densification) by prohibiting local regulatory obstacles. There is more that the Commission can do to encourage infrastructure deployment, including clarifying the law for collocations and non-substantial modifications to existing cell towers and base stations. For more on this, see my Perspectives from FSF Scholars paper, published on September 25th, titled "FCC Should Clear Local Obstacles to Wireless Infrastructure Upgrades." The Commission can also adopt its proposal to update its Over-the-Air-Reception-Devices (OTARD) rule to remove obstacles to placement of 5G-related equipment. 

Opensignal Report Shows Mobile Broadband is Ramping Up in Rural America

My Perspectives from FSF Scholars paper, "Resurgence in Broadband Deployment Vindicates FCC's Pro-Investment Policies," focused on data cited in the FCC's 2019 Section 706 report and the Commission's policy focus on closing the digital divide. To that end, encouraging broadband deployment progress in un-served and underserved rural areas is particularly important. In "Mobile Experience in Rural USA– An Operator Comparison," Opensignal's Francesco Rizzato assesses rural broadband availability by mobile broadband provider and according to different geographic and performance metrics. The March-to-June 2019 data cited in this Opensignal report provides another indicator that 4G mobile broadband (including service with 10 mbps/3 mbps speeds) is continuing to be reasonably and timely deployed to all Americans. 

For more, check out Opensignal's report.

The Commission can continue to encourage investment in broadband infrastructure to rural areas by following through on policy initiatives identified in that Perspectivespaper. Additionally, the Commission ought to clarify the law regarding collocations and modifications to existing cell sites. For more on that, see my Perspectives paper, published today, titled "FCC Should Clear Legal Obstacles to Wireless Infrastructure Upgrades."

Advanced 4G LTE Services Still Growing in America

A press release by 5G Americas summarizes recent deployment data for 4G LTE and 5G networks worldwide, including in North America. Although 5G deployment rightly deserves attention, 4G LTE mobile broadband networks still are still growing. According to 5G Americas, LTE represents 88% of mobile connections in North America as of June 2019, up 82% from the year before. The U.S. and Canada had 459 million LTE connections by the second quarter of this year. Additionally, "[t]he United States alone had 130 percent LTE market penetration in June – up from 126 percent in March." In addition to serving consumers, LTE networks provide low-powered Internet-of-Things connectivity for business enterprises. According to 5G Americas President Pearson: "LTE continues to increase the number of new connections while networks are continuously being enhanced with new technology… The innovative technologies which underpin 5G performance will also improve 4G LTE networks through the foreseeable future."

My Perspectives from FSF Scholars paper, "Resurgence in Broadband Deployment Vindicates FCC's Pro-Investment Policies," cited data points from several reports indicating that broadband, including mobile broadband, continues to be reasonably and timely deployed to all Americans. The early 2019 data cited by 5G Americas also appears to indicate a continuing positive deployment trajectory, as more Americans gain access to 4G LTE services, and at higher speeds. A projected surge in 5G connections will follow.

Former State Regulators Call on FCC to Reform Legacy Rules

A report published on September 20 by Mr. Tony Clark and Ms. Monica Martinez connects the reshaping of the competitive landscape in communications services since the mid-1990s with the need for eliminating regulatory mandates that can no longer be justified in today's marketplace. "The More Things Change, the More Things Need to Change: Why New Realities Require New Rules," is written by two former state public utility commissioners and published by USTelecom. 

The occasion for the report is the FCC's establishing of the Rural Digital Opportunity Fund for funding universal service for high-speed broadband via a proposed two-phase reverse auction framework. As Mr. Clark and Ms. Martinez explain, as the FCC increases competitive awarding of universal service subsidies, it should eliminate unfunded mandates on incumbent local exchange carriers that no longer receive such subsidies. They outline a handful of reform proposals that merit careful consideration by the FCC: 

• "[C]larify that any regulatory obligations placed on a service provider in a particular territory no longer apply to that provider when it stops receiving an associated subsidy"; 

• "[S]treamline or eliminate rules that prevent carriers from discontinuing service and exiting the market where competitive alternatives exist, particularly when the competitor is being funded by the government with support previously earmarked for the incumbent";

• "[E]liminate any ETC obligations where a provider is no longer receiving a subsidy through a Universal Service program"; and

• "[S]tate [carrier-of-last-resort] COLR obligations should be preempted where an incumbent provider loses the federal subsidy, unless the state steps in to make up the difference." 

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Congress Should Pass Bill for Small Copyright Claims

When copyrighted works are infringed on user-upload websites, many copyright owners are deterred from seeking civil justice by potential attorneys' fees and court costs. Legislation pending in both chambers of Congress, if passed, would provide copyright owners of modest means a less expensive venue to bring infringement claims. The House of Representatives and the Senate should promptly vote to approve the Copyright Alternative in Small-Claims Enforcement Act or “CASE Act” (H.R. 2426 and S. 1273). 

Infringements of copyrighted works deprive the owners of their exclusive rights to the proceeds of their property and labors, jeopardizing their livelihoods. Yet existing law make it burdensome for songwriters, recording artists, filmmakers, and other creative artists with limited resources to protect their copyrights and seek damages for infringement of their works. For starters, copyright owners face time-consuming burdens of patrolling user-upload sites for unauthorized uses of their works and issuing and re-issuing numerous notices to online platform services. Additional obstacles are posed by provisions in the Digital Millennium Copyright Act of 1998 (DMCA) regarding counter-notices and disputed takedown requests.

Under the DMCA, if a copyright owner submits a takedown notice to an online platform provider, the provider must make the takedown notice available to the user who posted the alleged infringing content. A user who objects to the takedown can file a counter-notice, requiring the online provider to repost the allegedly infringing content. And if a counter-notice is filed, a copyright holder still seeking to vindicate his or her rights must hire a lawyer and file a lawsuit in federal court within ten days. 

There is ample hardship in retaining an attorney to bring a copyright infringement lawsuit within ten days. Moreover, the federal court litigation is too costly for many copyright owners. As of 2019, filing and administrative fees to bring a civil case total $400. Attorneys’ fees and other litigation costs run much higher. The American Intellectual Property Law Association’s 2015 “Report of the Economic Survey” found that the median litigation costs of a copyright infringement lawsuit valued at less than $1 million was $150,000 at the time discovery was concluded. 

Not surprisingly, the U.S. Copyright Office has recognized that “federal court is effectively inaccessible to copyright owners seeking redress for claims of relatively low economic value, especially individual creators who are of limited resources.” In its September 2013 “Copyright Small Claims” report, the Office concluded that “the most promising option to address small copyright claims would be a streamlined adjudication process in which parties would participate by consent.” The Office's legislative proposal for a small copyright claims court provided the basis for the CASE Act.

H.R. 2426 and S. 1273 would establish a Copyright Claims Board as a voluntary, alternative forum to federal courts for alleged copyright infringements where total recovery is for $30,000 or less, exclusive of attorneys' fees and costs. The Board would consist of three appointed Copyright Claims Officers serving six-year terms. Under the CASE Act, copyright owners could initiate small claims proceedings before the Board by providing notice to respondents, who would have 30-days to consent or opt-out. Failure to timely respond could result in a default against the respondent. Importantly, the Copyright Claims Board would provide a venue for copyright owners to seek relief for DMCA-related claims for online infringement on user-upload websites. 

The CASE Act provides that both parties before the proposed Copyright Claims Board would make written submissions. Hearings would be conducted remotely. Similar to a typical small claims court, the Copyright Claims Board would have simplified procedures with limited discovery. The Board could dismiss without prejudice any claim that it believes to be unsuitable for the small claims process. Decisions by the Board would be binding only on the parties before it. And Board decisions would be subject to limited review by the Register of Copyrights for “abuse of discretion.” Such decisions could later be filed in federal court for enforcement, but they also could be challenged in federal district court for fraud, misconduct, or other improprieties. 

Both H.R. 2426 and S. 1273 have been reported out of their respective committees, with overwhelming bipartisan support. Passing the CASE Act would be an important achievement in copyright reform for the 116th Congress. The legislation wouldprovide a less expensive and simpler process for addressing many copyright infringement claims, including some DMCA-related claims. The House and Senate should soon vote on the CASE Act and provide copyright owners of modest means greater access to justice.

Plaintiff Not Going Away in Dubious Lawsuit Threatening Texting Services

On September 18, Plaintiff John Salcedo filed a request with the U.S. Court of Appeals for the Eleventh Circuit for a rehearing en banc in Salcedo v. Hanna. My Perspectives from FSF Scholars paper titled "The FCC Should Halt Bogus Lawsuits Threatening Popular Texting Services" analyzed the Eleventh Circuit's panel decision in Salcedo. The case is a putative class action in which the alleged violation of the Telephone Consumer Protection Act of 1991 (TCPA) was a single unsolicited text message by an attorney to his former client. The Eleventh Circuit panel's decision in Salcedo acknowledged that just a single allegedly text message constitutes an alleged violation under the FCC's current interpretation of the TCPA provision prohibiting "autodialers." Although the Eleventh Circuit held against the Plaintiff for other good reasons, this latest filing indicates the lawsuit isn't going away – at least not yet. 

Salcedo is a case in point for why the FCC needs to modify its TCPA rules to target the real problem robocallers that Congress had in mind rather than leave the door open to lawsuits that appear frivolous. For more, read the Perspectives paper.  

Constitution Day 2019

Today, September 17, is Constitution Day, commemorating the signing of the proposed U.S. Constitution at the conclusion of the Philadelphia Convention in 1787. 

The work of the Free State Foundation, being dedicated constitutional principles and the rule of law, often addresses the intersection of current communications and intellectual property policy issues with constitutional structural and individual rights issues. Here are some publications by FSF scholars from 2018 and 2019 touching on constitutional matters: 

• FSF Comments regarding Commercial Leased Access Rates (July 22, 2019) (explaining why cable leased access rules are contrary to the First Amendment's Free Speech Clause jurisprudence);

• Prof. Daniel A. Lyons, "State Net Neutrality Mandates and the Dormant Commerce Clause: Some Preliminary Thoughts,"Perspectives from FSF Scholars, Vol. 14, No. 14 (May 21, 2019);

• Randolph J. May and Seth L. Cooper, "The FCC Should Stop Potential Liability for Smartphone Owners: The Ninth Circuit's Autodialer Decision Threatens Text Messaging Services," Perspectives from FSF Scholars, Vol. 14, No. 5 (Feb. 15, 2019) (explaining how a broad definition of "autodialer" bans protected free speech, contrary to the overbreadth doctrine in First Amendment jurisprudence);

• Randolph J. May and Seth L. Cooper, "John Marshall's Jurisprudence Supports Preemption of California's Net Neutrality Law," Federalist Society Review, Vol. 20 (Jan. 28, 2019);

• Randolph J. May, Maintaining the Constitution's Separation of Powers," Perspectives from FSF Scholars, Vol. 13, No. 37 (Oct. 1, 2018) [originally published in the Washington Times];

• Randolph J. May and Seth L. Cooper, "A Constitution Day Call to Strengthen Copyrights," Perspectives from FSF Scholars, Vol. 13, No. 35 (Sept. 17, 2018) [originally published in Real Clear Markets]; 

• Christopher J. Walker, "Judge Brett Kavanaugh's Views on Chevron Deference at the FCC and Beyond," Perspectives from FSF Scholars, Vol. 13, No. 32 (Aug. 28, 2018); 

• Seth L. Cooper, "FCC Proposals Promoting Infrastructure Deployment Don't Violate Anti-Commandeering Rule,"Perspectives from FSF Scholars, Vol. 13, No. 29 (Jul. 17, 2018); 

• Randolph J. May, "Woodrow Wilson's Case Against the Constitution," Perspectives from FSF Scholars, Vol. 13, No. 20 (May 31, 2018) [originally published in the Washington Times].

Not to be forgotten is the ongoing series on Constitutionalizing the Administrative State by Professor Joseph Postell, a Member of FSF's Board of Academic Advisors, which was the subject of yesterday's blog post.

Happy Constitution Day.  

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.