First Amendment Challenges Involving Section 230 Fall Short

On December 11, 2020, the U.S. District Court for the District of Columbia dismissed a First Amendment challenge to President Trump's Executive Order (EO) 13,925. Among other things, EO 13,925 charged the U.S. Secretary of Commerce to file a petition with the FCC requesting that the Commission propose regulations to clarify the scope of Section 230(c) of the Communications Decency Act. 

In CDT v. Trump, the District Court concluded that CDT's First Amendment claims against President Trump did not specify a concrete or imminent injury, and that CDT therefore lacked legal standing to bring its claims. As the court explained, Article III precedents require an organization making a claim to sufficiently allege a demonstrable injury to a party's activities, and that "a mere setback ... to abstract social interests" is insufficient. Additionally, the court concluded that CDT's alleged injury from the EO were not imminent but conjectural or hypothetical. The court observed that the EO doesn't apply to private parties but "only sets a course of government process into motion." The EO, for instance, directed NTIA to "file a petition for rulemaking . . . requesting that the FCC expeditiously propose regulations" regarding the meaning and application of Section 230. According to the court, speculative future government action through that process is not enough to establish Article III standing.

 

The court in CDT v. Trump also concluded that the injunctive and declaratory relief CDT sought are unavailable against the President – the lone defendant named in the case. And the court determined that even if Article III standing were satisfied, CDT's claims still were unripe for adjudication. The result in CDT v. Trump was similar to the result reached in October 2020 by the U.S. District Court for the Northern District of California. In Rock the Vote v. Trump, the court concluded that the party bringing First Amendment challenges against EO 13,925 lacked Article III standing. 

 

In sum, the dismissals of these First Amendment challenges to EO 13,925 were resounding, and the parties raising them resorted to standing arguments that were so thin as to appear silly. These court decisions are reminders of a broader point that many First Amendment-related claims about Section 230 are off-base. As Free State Foundation President Randolph May explained in his November 2020 Perspectives from FSF Scholars paper, "narrowing Section 230 is not necessarily a First Amendment violation." It is one thing for government to mandate what a private actor must say, but it is something else for the government to confer special immunity on private actors from the consequences to third parties of their speech-related conduct. And as CDT v. Trump and Rock the Vote v. Trump show, it is altogether another thing for government agencies to undertake a process to consider what the terms of Section 230 mean and how they apply – and which may or may not lead to some sort of government action. 

 

For more on the FCC's authority to issue interpretations of Section 230's terms as well as discussion of First Amendment-related claims, see the Free State Foundation's public comments and reply comments filed in the Commission's proceeding. 

Consumer Survey Reveals That the Number of U.S. Homes with Broadband Access Continues to Rise

Consumer research conducted recently by the Leichtman Research Group (LRG) confirms two trends: one, that the number of Americans with broadband Internet access at home continues to grow; and two, that in 2020 the amount of time spent online has increased dramatically.

The FCC in April released the 2020 Broadband Deployment Report. As Free State Foundation Director of Policy Studies and Senior Fellow Seth L. Cooper highlighted in a May 11 Perspectives from FSF Scholars, the report showed that 94.4 percent of the U.S. population had access to broadband at the end of 2018. A recent telephone survey demonstrates that the number of consumers subscribing to broadband is similarly large and still expanding.

In a December 28 press release, LRG reports that 86 percent of U.S. households currently subscribe to Internet access service, the vast majority of which – 97 percent – meets or exceeds the FCC's definition of "broadband" (that is, 25 Mbps downstream and 3 Mbps upstream). That is a 5 percent increase over just 5 years. An additional 7 percent access the Internet on a smartphone.

LRG also found that, no doubt in response to the COVID-19 public health crisis, Americans are spending substantially more time online: 5.3 hours per day in 2020 versus 3.7 hours a day in 2019. Fortunately, U.S. broadband infrastructure has taken this heightened demand in stride. Thanks to the FCC's light-touch regulatory oversight, broadband network operators have made the private investments required to respond to competitive challenges and unforeseeable increases in demand.

A Primer: The COVID Relief Bill's Broadband Funding Provisions

The 900 billion COVID relief and government funding bill passed by the House and Senate and now signed by President Trump includes nearly $7 billion for broadband-related initiatives. On the whole, the broadband funding provisions will promote more ubiquitous deployment of secure high-speed broadband services, especially to geographic areas and to individuals where access currently lags.

Areas of focus include an emergency discount on broadband Internet access service for low-income and economically impacted households, funding to "rip and replace" insecure communications network equipment, broadband deployment grants for Tribal lands and unserved areas, additional money for telehealth, and much-needed funds for updated broadband coverage maps, a topic of recent focus by the Free State Foundation.

Here's a recap of the broadband provisions.

In order to limit the allocation of scarce government resources to those areas in fact unserved, accurate broadband coverage maps are essential. Congress and the FCC are in agreement that currently available maps are not up to the task, and both have taken steps to address this issue, the former through passage of the Broadband Deployment Accuracy and Technological Availability (DATA) Act, the latter through the establishment of the Digital Opportunity Data Collection (DODC).

The DODC will utilize "granular and detailed coverage data" from Internet service providers (ISPs), along with input from government entities and the general public, to produce maps far more accurate than those that rely upon census-block-based information submitted via FCC Form 477.

However, As Free State Foundation President Randolph May and I noted in "Congress Should Fund Needed Broadband Maps This Session," a recent Perspectives from FSF Scholars, the money required to fund that effort until now had not been appropriated. This legislation provides the FCC with the full amount requested by Chairman Ajit Pai: $65 million.

The relief package also includes $3.2 billion to keep Americans connected during the COVID-19 pandemic. Eligible households will receive a monthly emergency broadband benefit in the form of a $50 discount on high-speed Internet access service. Eligibility generally is limited to low-income households and those who have endured lay-offs or furloughs.

As the administering entity, the FCC has sixty days to adopt rules implementing the program, which will continue for six months after the Secretary of Health and Human Services has declared an end to the public health emergency. The Commission will reimburse participating ISPs directly for the amount of the monthly discount and up to $100 for a connected device (tablet, laptop, or desktop computer) that they provide. A provider need not be designated as an Eligible Telecommunications Carrier in order to participate.

In addition, the legislation tasks NTIA with disbursing a total of $1.3 billion for broadband grant programs, $1 billion targeting Tribal lands and $300 million for unserved (including rural) areas. Recipients of Tribal Broadband Connectivity Grants may use those funds to deploy fixed broadband infrastructure in unserved areas or, during the pandemic, for subsidized broadband service, distance learning, or telehealth programs.

The remaining $300 million will be made available in the form of Broadband Infrastructure Deployment Grants, which will target unserved areas for network infrastructure construction and prioritize, among other things, projects that target smaller communities (that is, counties, cities, or towns with less than 50,000 inhabitants).

NTIA also will become home to a new Office of Minority Broadband Initiatives that will perform a number of responsibilities, most significantly the administration of a $285 million pilot program focusing primarily on the broadband needs of Historically Black Colleges and Universities (HBCUs) and their surrounding communities.

Congress addressed another funding need, relating to potential security vulnerabilities in telecommunications equipment manufactured by Chinese companies Huawei and ZTE currently deployed in U.S. networks, by allocating up to $1.9 billion to "rip and replace" those devices with trusted alternatives. In March 2020, lawmakers passed the Secure and Trusted Communications Networks Act of 2019, which banned recipients of Universal Service Fund support from purchasing at-risk equipment and services, mandated that they remove such devices from their networks, and directed the FCC to establish a program to reimburse primarily smaller providers (that is, those with fewer than 2 million customers) for replacement equipment.

In November, the Commission adopted rules and procedures to implement that legislation, but Congress had not yet appropriated the money required. The relief package funds this effort and expands the pool of recipient providers to those with up to 10 million customers – though it prioritizes those with less than 2 million customers.

In addition, the relief package provides the FCC with just under $250 million in additional funding for its COVID-19 Telehealth Program established earlier this year by the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Finally, the bill incorporates (1) the December 31, 2021, deadline for the FCC to commence an auction of the 3.45-3.55 GHz band established by the Beat CHINA for 5G Act, and (2) the repeal of the mandate to auction the T-Band – spectrum that first responders depend upon for mission-critical communications in a number of large cities – set forth in the Don't Break Up the T-Band Act of 2020.

In a statement, FCC Chairman Pai "applaud[ed] Congress for including ... a number of provisions that advance critical national priorities in communications policy" and "salute[d] Congressional leaders for working together in a bipartisan manner to reach agreement on this consequential legislation that will help protect our national security, close the digital divide, advance telehealth, and promote American leadership in 5G."

FCC Adopts Order to Promote "Next Gen TV" and "Broadcast Internet Services"

At its December 10 public meeting, the FCC adopted a report and order that modifies agency rules "to foster the efficient and robust use of broadcast spectrum capacity for the provision of "broadcast Internet services" enabled by ASCT 3.0 or "Next Gen TV" technology. Among other things, the Commission's order clarifies that noncommercial educational television stations (NCEs) are free to provide ancillary and supplementary services like broadcast Internet services. I previously mentioned the now-adopted order in a May 2020 blog post. 

The Commission's vote on the order was unanimous in the result, as there appears to be plenty of upside and no downside to the order. In his concurring statement on the order, Commissioner Brendan Carr highlighted some of the potential benefits of broadcast Internet services:

 

For 5G, it could help augment coverage or add capacity by shifting data off cellular networks. As we look to push increasingly more data to the edge of the network, for both fixed and mobile services, broadcast spectrum could provide one way of moving all that data in an efficient and cost-effective manner. 

 

Free State Foundation Senior Fellow Andrew Long described the benefits of Next Gen TV for video consumers in his Perspectives from FSF Scholars paper, "Multicasts, ATSC 3.0 Turn Broadcasting Into a Multichannel Platform." 

MEDIA ADVISORY: Congress Passes Copyright Reforms on Streaming Piracy and Small Claims

The following statement may be attributed to Free State Foundation Senior Fellow Seth Cooper regarding the passage of   the Protect Lawful Streaming Act and the Copyright Alternative in Small-Claims Enforcement Act (CASE Act) – both of which were included in the omnibus spending bill for 2021.

The Senate and House deserve thanks for passing these needed reforms and strengthening copyright protections against online infringements that cost copyright owners hundreds of millions of dollars each year.  The Protect Lawful Streaming Act targets illicit commercial streaming operations with tougher criminal penalties. As I recently stated in a blog post, operators of illegal movie and music streaming services faced less severe penalties than operators of online piracy sites for downloading copyrighted content. There obviously was no reason for that disparity in the law. By increasing criminal infringement penalties for streaming piracy, Congress has helped make it worthwhile for prosecutors to go after illegal commercial streaming operations. 

By passing the CASE Act, Congress has provided many copyright owners with access to justice through a less expensive and voluntary small claims venue for hearing infringement claims. The six-figure costs of hiring attorneys as well as fees and legal costs of going to federal court make civil copyright enforcement beyond the reach of copyright owners of modest means. Now copyright owners will soon have a less expensive and simpler process for resolving copyright infringement claims, including certain types of online infringement claims.

Wi-Fi Alliance Releases Report Highlighting Critical Role of Wireless Networks During COVID-19 Pandemic

2020 was a banner year for unlicensed spectrum. For the first time in decades, the FCC made available significant amounts of additional capacity for Wi-Fi. The Wi-Fi Alliance recently released a report that affirms the wisdom of those actions.

Long before the COVID-19 pandemic motivated many Americans to learn, work, seek treatment, and interact socially from the safety of their homes, Wi-Fi had started to outgrow unlicensed allocations in the 2.4 and 5 GHz bands. The exploding number of connected devices and ever-evolving requirements – higher speeds, lower latency – demanded not just more spectrum, but also contiguous wideband (160 MHz) channels able to take full advantage of Wi-Fi 6, the latest iteration of the technical standard.

The Commission responded in April by freeing up 1,200 MHz in the 6 GHz band for unlicensed use. I wrote in a February 2020 Perspectives from FSF Scholars about the potential of Wi-Fi 6 equipment operating in the 6 GHz band – branded commercially as "Wi-Fi 6E" devices – to modernize wireless networking.

In addition, in November the agency reallocated 45 MHz of spectrum in the 5.9 GHz band to unlicensed use. The Free State Foundation filed comments supporting that proposal, and I wrote a supporting piece, "The FCC's 5.9 GHz Proposal Would Advance Both Wi-Fi and Vehicle Safety," shortly before its adoption.

In a December 7 statement announcing the agency's approval of the first Wi-Fi 6E device, Chairman Ajit Pai highlighted the role that Wi-Fi has played during the current public health crisis and proclaimed a new era in wireless connectivity:

Today, we get an exciting glimpse of America's Wi-Fi future.... During the COVID-19 pandemic, we've all seen how Wi-Fi has enabled everything from work-at-home to telehealth to remote learning to streaming and gaming. Wi-Fi 6 will turbocharge each of these and more, and will also complement commercial 5G networks. Bottom line: The American consumer's wireless experience is about to be transformed for the better.

A December 2020 report prepared by Telecom Advisory Services LLC and released by the Wi-Fi Alliance quantifies just how important Wi-Fi networks are during these trying times. A few key takeaways:

• Global Wi-Fi use has increased roughly 82 percent during the pandemic.
• U.S. smartphone use of Wi-Fi increased over 10 percent in March.
• The number of devices connected to Wi-Fi networks has increased by 11 percent.
• The number of simultaneously connected devices has jumped at least 60 percent.

Congress Should Pass the "Protect Lawful Streaming Act"

Pandemic-related lockdowns have heightened the importance of copyright protections against online piracy. Yet copyright law has failed to keep pace with the precipitous rise of illicit video and music streaming services. Under existing law, piracy of online content that is streamed is only a misdemeanor, whereas other forms of piracy are felonies. Bipartisan legislation called the "Protecting Lawful Streaming Act of 2020," which has just been introduced, would reform the law by targeting illicit commercial streaming operations with tougher criminal penalties.

Online streaming services have overtaken downloads as the most popular way that consumers enjoy video and music content. Streaming also has become the predominant means for online piracy of copyrighted works. So-called "stream-ripping" websites and apps provide Internet users unauthorized access to copyrighted movies, TV shows, and sound recordings. Meanwhile, illegal Internet Protocol Television (IPTV) services offer paying subscribers unauthorized access to vast collections of copyrighted content, including live sports.

 

An August 2020 report by the Digital Citizens Alliance estimated that illegal IPTV services annually generate $1 billion in U.S. subscription revenues, with 9 million fixed broadband subscribers. Moreover, there is evidence that these online piracy streaming services have increased in popularity since the beginning of the 2020 lockdowns. For example, the piracy tracking firm Muso found a 43% surge in American visits to movie pirating sites during the last week of March 2020 compared to a month earlier.

 

Federal copyright law criminalizes intentional or willful infringement of protected works. Criminal prosecutions are not numerous, and they are directed against traffickers in pirated works, not individual Internet users. Such prosecutions are necessary to address bad actors who inflict harm on a mass scale on copyright owners and evade the civil justice system. 

 

But as Free State Foundation President Randolph May and I point out in our book, Modernizing Copyright Law – Constitutional Foundations for Reform, federal copyright law predates the precipitous rise of illicit video and music streaming services. Under existing law, criminals who operate illegal IPTV streaming services can only be charged with misdemeanor infringement, not felony infringement. As a result, operators of these illegal streaming services face less severe penalties than operators of online piracy sites for downloading copyrighted movies and music. There obviously is no reason for this disparity in the law. Also, prosecutors generally are reluctant to direct substantial resources towards misdemeanors. Streaming piracy deserves stronger sanctions, and stiffer penalties are needed to ensure future prosecutions against illegal streaming piracy. 

 

By increasing enforcement against sophisticated illicit streaming copyright criminals, the Protecting Lawful Streaming Act of 2020 will modernize the law. The legislation was introduced by Sen. Thom Tillis with bipartisan backing. The legislation provides that it is a felony for persons to "willfully, and for purposes of commercial advantage or private financial gain" offer digital transmission services to the public. It is narrowly targeted to digital transmission services that are primarily designed for unauthorized streaming (or public performances) of copyrighted works, have no commercially significant purpose other than unauthorized streaming of copyrighted works, or are intentionally marketed to promote their unauthorized streams. Notably, the terms of the Protecting Lawful Streaming Act are not directed toward individual Internet users or subscribers of IPTV services. 

 

As of this writing, the Protecting Lawful Streaming Act is attached to the omnibus spending bill being considered by Congress. Budgetary issues aside, the Protecting Lawful Streaming Act is strong on its own merits. In whatever legislative vehicle proves most practical, Congress should pass the bill and the President should sign it. 

MEDIA ADVISORY: USF Contribution Factor Tops 31% and May Be Nearing a Tipping Point

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

On December 14, the FCC’s Office of Managing Director announced that the Universal Service contribution factor for Q1 2021 will be a record 31.8%. This record amount is a result of a continuing drop in interstate and international revenue, The steady increase over time in the amount of the USF "tax," which is the surcharge added to every consumer’s telecom bill for interstate and international calls, is shocking and ought to receive far more widespread attention that it has. This consumer tax — because that is exactly the economic effect of USF surcharge — is regressive because, perversely, it negatively impacts low income subscribers who can least afford to pay it more than higher income subscribers who can.

 

It ought to be clear that USF surcharge increases can't go on too much longer without reaching a tipping point — that is, the point at which many more current subscribers will rapidly abandon services subject to the tax. When that happens, the current USF regime, like the proverbial house of cards, may come tumbling down. What this means is that it is time for Congress to tackle comprehensive USF reform, including especially consideration of replacing the contribution surcharge mechanism with direct congressional appropriation to fund USF programs. This would be a more sustainable, transparent, and efficient way to support the USF programs, such as Lifeline, that are deemed necessary in the public interest.  

Save the Date! A Farewell Address by FCC Chairman Ajit Pai - January 8, 2021

SAVE THE DATE! 

WHAT: An Address by FCC Chairman Ajit Pai

WHEN: Friday, January 8, 2021 – 11:00 AM

The Free State Foundation will host a Virtual Farewell Address by FCC Chairman Ajit Pai on Friday, January 8, 2021.

More details to follow!

PLEASE MARK YOUR CALENDAR NOW FOR JANUARY 8!

UPDATE: REGISTER FOR THIS EVENT HERE

#FSFPaiFarewell

Catch the Teleforum on Chairman Pai's Tenure at the FCC

On Thursday, December 17 at noon Eastern time, the Federalist Society will host a teleforum event: "Chairman Ajit Pai's Tenure at the FCC: Fireside Chat and Panel Discussion." The chat with Chairman Pai will be followed by a discussion by panel members, including Free State Foundation President Randolph May. Be sure to call in on Thursday the 17th and listen to what likely will be a wide-ranging exchange reviewing the FCC's accomplishments during Pai's chairmanship as well as the future of federal communications policy. Information about the upcoming teleforum can be found on the Federalist Society's website.

UPDATE: Audio of the teleforum is now available here. 

FCC Adopts Proposal on Consumer Presales for 5G Devices

At its December 10 public meeting, the FCC adopted a proposed rulemaking that would permit imports, marketing, and pre-sales of 5G devices prior to Commission authorization of those devices for consumer use. However, the proposal would not permit such devices to be delivered to consumers until they have been authorized by the Commission. The petition that prompted the Commission's proposed rulemaking was the subject of my August 14 blog post. This sensible proposal, which is expected to receive final Commission approval sometime in 2021, will help hasten U.S. consumer adoption of advanced 5G network services.    

Media Bureau Grants Relief from Cable Rate Regulation in Light of Streaming Competition

The FCC's Media Bureau on December 7 adopted and released a Memorandum Opinion and Order exempting Comcast and Cox Communications from local cable rate regulation in 85 Massachusetts communities. That decision once again recognized that the AT&T TV NOW streaming service provides "effective competition" in accordance with the so-called "LEC" test set forth in Section 623(l)(1)(D) of the Communications Act.

Local franchising authorities (LFAs) are permitted to regulate the rate a cable operator charges for the basic service tier in a given area only until the FCC concludes that that cable operator is subject to "effective competition." Subsection (l) of Section 623 defines "effective competition" in a number of ways, one of which is as follows:

a local exchange carrier or its affiliate ... offers video programming services directly to subscribers by any means (other than direct-to-home satellite services) in the franchise area of an unaffiliated cable operator which is providing cable service in that franchise area, but only if the video programming services so offered in that area are comparable to the video programming services provided by the unaffiliated cable operator in that area.

In an October 2019 Memorandum Opinion and Order, the Commission for the first time acknowledged that the AT&T TV NOW service satisfies the four prongs of "LEC" test.

Free State Foundation scholar Seth L. Cooper approvingly anticipated that decision in a Perspectives from FSF Scholars, "FCC Action Would Finally Eliminate Local Cable Rate Regulation," published shortly before the agency acted on the petition filed by Charter Communications. When that item was placed on circulation, FSF President Randolph J. May issued a Media Advisory expressing his approval of that proposed decision. Click here and here for additional commentary.

In a Perspectives from FSF Scholars posted to the Free State Foundation website earlier today, I describe how recent subscriber growth by virtual Multichannel Video Programming Distributors (vMVPDs) provides still more evidence that, in 2020, video distribution unquestionably is defined by robust and full competition, This decision by the Media Bureau to eliminate legacy rate regulation in Massachusetts reflects that reality, but the Commission can and should do more to remove outdated rules and unleash the power of an unfettered competitive marketplace.

Court Rules for Copyright Owners on Infringements by Streaming Music Service

Copyright owners of sound recordings secured a significant win in Atlantic Recording Corp. v. Spinrilla, LLC. The decision by the U.S. District Court for the Northern District of Georgia was issued on November 30. At issue in the case was an online streaming and downloading service offering mixtapes that in many instances contained copyrighted sound recordings. Plaintiff copyright owners filed infringement claims against Defendants Spinrilla and its owner involving 4,082 works. 

The District Court's decision in Spinrilla rightly recognized that an online service provider is liable for direct infringement for unauthorized Internet streaming of a copyrighted sound recording at the request of its user. In particular, the court determined that a sound recording constitutes a public performance of a copyrighted work. According to the court, the "reasoning and interpretation of the language and underlying purpose of the Copyright Act" – reflected in the U.S. Supreme Court's decision in ABC v. Aereo, Inc., 573 U.S. 431 (2014) – "apply equally to online music streaming services such as Spinrilla's and is consistent with a number of Circuit and district court decisions." The court also observed that "online music streaming services are not among the specific examples of activities the Aereo Court expressly noted fell outside the reach of its holding."

 

Although the Eleventh Circuit has not squarely addressed whether direct infringement claims require a copyright owner establish so-called "volitional conduct" by the alleged infringer, the court wrote that "even if volitional conduct is required to prove direct infringement, the cases on which Plaintiffs rely have all held that the affirmative act of streaming constitutes direct infringement of the copyright holder’s exclusive right of performance regardless of the fact that the the [sic] streaming occurs at the request of the user." 

 

Free State Foundation President Randolph May and I have addressed the issue of the volitional conduct requirement in infringement cases in two Perspectives from FSF Scholars papers: "The Constitutional Foundations of Strict Liability for Copyright Infringement" and "Volition Has No Role to Play in Determining Copyright Infringements."  In this case, the District Court's articulation of the doctrine – based on the assumption that it applies – appears reasonable.

 

Additionally, the District Court correctly concluded that an online service provider that seeks legal immunity from infringement claims under the Digital Millennium Copyright Act of 1998 must first register an agent for receiving takedown notices with the U.S. Copyright Office. Defendants in the case did not register their agent with the Copyright Office until after Plaintiffs filed their lawsuit, and so the Court determined the defendants were ineligible for DMCA safe harbors for the infringements. 

 

In June 2020, FSF President May and I addressed needed reforms to the safe harbors provision in our Perspectives paper "Copyright Office Report Should Spur Modernizing the DMCA."

 

The District Court in Spinrilla has yet to make a judgment on damages. 

FCC Report Spotlight State's Noncompliance with NET 911 Act

On December 8, the FCC released its 12th Annual Report on State 911 Fees and Charges. In the report, the Commission found that a handful of states diverted nearly $200 million in 911 taxes and fees to non-911 purposes in 2019 as defined by the NET 911 Act. Once again, New Jersey, New York, and Rhode Island were among the worst offenders. 

The Commission found that New Jersey spent nearly $93.6 million in 911 taxes and fees – or over 75% of the 911 taxes and fees it collected – on non-911 public safety and unrelated matters. West Virginia also made the list of states that diverted funds to non-911 purposes. And state law in Nevada apparently permitted two or more local jurisdictions to divert funds to non-911 purposes. 

The report did observe that Rhode Island and West Virginia have more recently amended their laws regarding the handling of 911/E911 taxes and fees. So there is reason to anticipate 2020 results that are more consistent with the NET 911 Act.

 

The FCC's State 911 Fees and Charges Report has again provided a useful public service that hopefully will encourage greater accountability for proper use of 911 taxes and fees in the future. 

Report Spotlights Broadband "Power Users" and Usage-Based Billing

The OpenVault Broadband Insights (OVBI) report for the third quarter of 2020 has just been released. The report includes data on broadband traffic volumes compared to earlier time periods as well as usage patterns by consumers. Interestingly, the report observed that "[t]he top 10% of subscribers by usage consume more than half (54%) of all upstream traffic." And the OVBI report indicated that so called "power users" – subscribers who use more than 1 TB of data per month – constituted 8.8% of broadband subscribers, a 110% increase compared to the third quarter of 2019.  

The OVBI report also offered an interesting insight regarding high volume users and usage-based broadband offerings:

Usage based billing (UBB) operators had roughly 25% more gigabit subscribers than FRB [flat rate billing] operators in 3Q20, perhaps due to the fact that UBB operators often provide higher usage quotas for the gigabit tier than the slower bandwidth tiers. This provides incentive to subscribers of UBB operators to upgrade to the faster speeds. 

As pointed out in a blog post from August 2018, the Restoring Internet Freedom Order recognizes the consumer welfare aspects of usage-based pricing plans: "Usage allowances may benefit consumers by offering them more choices over a greater range of service options, and, for mobile broadband networks, such plans are the industry norm today, in part reflecting the different capacity issues on mobile networks." Other aspects of usage-based billing are discussed in that blog post. Going forward, it is important the FCC continues to affirm the freedom of broadband Internet service providers to offer pricing plans that cater to the preferences of both "power users" and lower-volume data users. 

Ericsson Mobility Report Looks at the Next 5 Years of 5G

The latest iteration of the Ericsson Mobility Report was released on November 30. This new report spotlights recent progress in 5G network deployments on a regional as well as global basis. And the report offers growth projections for fixed and wireless mobile services for the next five years. 

The Ericsson Mobility Report takes a primarily international outlook, forecasting 3.5 billion 5G subscriptions by the end of 2026. However, the report includes some analyses and projections for wireless services in North America: 

In North America, 5G commercialization is moving at a rapid pace. Service providers have already launched commercial 5G services, focused on mobile broadband. The introduction of 5G smartphones supporting all three spectrum bands will make 2021 an eventful year for early 5G adopters. FWA [fixed wireless access] will play a key role in closing the digital divide where the pandemic has exposed large gaps for education, remote working and small businesses. By 2026, more than 340 million 5G subscriptions are anticipated in the region, accounting for 80 percent of mobile subscriptions. 

Looking at mobile subscriptions in North America, the report found that 5% are for 5G services and 89% are for 4G LTE services. By 2026, it is expected that 5G services will comprise 80% of mobile subscriptions in North America and 4G will comprise the remaining 20%. Additionally, the report tracked growth in the regional percentage of North American service providers offering fixed wireless access. Provider offerings of fixed wireless increased from 70% in February 2020 to 80% by October 2020. And the report projects that mobile data traffic per smartphone in North America will jump from 11.8 GB per month to 49 GB per month – a compound annual growth rate of 27%. Also: "In 2026, 5G subscription penetration is set to be the highest of all regions at 80 percent."

 

Regarding the United States, the report acknowledged that 5G coverage build-out spans three-categories: 1) New bands in the sub-6GHz range; 2) mmWave frequency bands; and 3) Existing LTE bands. The report concludes that this approach has resulted in 5G coverage "for a large part of the population."

 

But as Free State Foundation Scholars have pointed out in recent publications, there's plenty that Congress and the FCC ought to do to accelerate 5G deployment in the U.S. For starters, check out "Congress Should Fund Needed Broadband Maps This Session," a Perspectives from FSF Scholars paper by FSF President Randolph May and Senior Fellow Andrew Long. Also see my Perspectives paper, "The FCC Should Promote Timely Transitions to Next-Gen Broadband."

Free State Foundation President Randolph May's Media Statement on FCC Chairman Pai's Departure

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

 

 

“I’ve been involved in communications law and policy for four decades now, and I have no hesitation in saying that Ajit Pai has been one of the most consequential FCC Chairman that I have observed. As Chairman Pai said in the announcement of his impending departure, he has “not shied away from making tough choices.” Pai fought — and, indeed, he had to fight — to reduce regulation where it was no longer needed in light of marketplace and technological developments, and he led the way in taking important actions to help get broadband deployed in unserved areas. Perhaps most consequential of all was Pai’s leadership, supported by his colleagues Commissioners Michael O’Rielly and Brendan Carr, in reversing the Obama FCC’s imposition of public utility-like regulation on Internet providers. The idea that broadband providers should be regulated under the same common carrier regime as Ma Bell and legacy voice telephone companies doesn’t make sense.

There were occasions, unfortunately, when Chairman Pai and his family were subject to nasty personal attacks because of the positions he took, for example, in leading the Commission to adopt the Restoring Internet Freedom Order. This should never have happened and shouldn’t happen again. But Chairman Pai didn’t back down. Rather he responded to those unjustifiable attacks with grace and aplomb. That’s a worthy legacy too."