Tuesday, January 26, 2021

Congress Should Reject the "Most Favored Nation" Healthcare Model

As a matter of policy, except in rare circumstances, Free State Foundation scholars do not sign "coalition" letters in support or opposition to particular policies. But that does not mean we don't take note of them.

In this regard, I want to call your attention to a letter, dated January 25, directed to the federal government's Centers for Medicare & Medicaid Services (CMMS). The letter, which was by signed by 75 federal and state-based organizations, opposes an interim rule which would tie the prices paid for medicines in the Medicare program to the prices paid for those medicines in foreign countries, many of which have socialized health care systems that control prices without any regard whatever for the costs of producing drugs. That is the reason why those countries generally lag far behind the U.S. with respect to developing innovative new, often life-saving drugs.

As the letter explains, by incorporating a Most Favored Nation (MFN) model into the U.S. Medicare system, in reality the interim rule is importing a rigid regime of price controls that will have the adverse impact of diminishing innovation and investment by pharmaceutical manufacturers in the U.S. Accordingly, this MFN price control regime will not only harm consumers of medicines here in the U.S., but the world over, as new cutting-edge medicines become less available.

And, aside from those adverse ramifications, the use of the rarely-invoked interim rule procedure to implement a concededly major change in U.S. health care policy, raises serious legal issues. 

For the above reasons, and those explained more fully in the coalition letter, the interim rule should be withdrawn.

Friday, January 22, 2021

Video of FSF Event: "The Supreme Court, the FCC, and Communications Law"

The YouTube video is now available for the Free State Foundation's January 22 virtual event on "The Supreme Court, the FCC, and Communications Law." The event featured Ilya Shapiro, director of the Cato Institute's Robert A. Levy Center for Constitutional Studies. He is the author of the excellent new book, Supreme Disorder: Judicial Nominations and the Politics of America's Highest Court. Responses to Mr. Shapiro's remarks and discussion followed. This included commentary from the always-insightful Professor Christopher Yoo, John H. Chestnut Professor of Law, Communication, and Computer & Information Science, and Director of the Center for Technology, Innovation & Competition at the University of Pennsylvania Law School.

Be sure to check out the video!

Thursday, January 21, 2021

Press Release: FSF President Randolph May Reacts to Biden's Rosenworcel Pick

The following statement may be attributed to Free State Foundation President Randolph May regarding President Biden's announcement that he has named Jessica Rosenworcel Interim FCC Chairman: 

I congratulate Commissioner Rosenworcel on being named Interim FCC Chairman. She certainly has the requisite experience and expertise, and she understands the way the agency works as well as anyone in the country. While I'm certain that I and other Free State Foundation scholars won't always agree with all her actions, especially those that depart meaningfully from reliance on free market tenets, I am equally certain that when we do disagree, as always, we will do so respectfully, and on the basis of principle. There's much important work for the FCC to accomplish, and I wish Commissioner Rosenworcel well.

Supreme Court Hears Arguments on FCC's Media Ownership Rules

On January 19, the U.S. Supreme Court held oral arguments in FCC v. Prometheus Radio Project and National Association of Broadcasters v. Prometheus Radio Project. At issue in those consolidated cases is the FCC's authority under Section 202(h) of the Telecommunications Act of 1996 to repeal or modify media ownership rules that the Commission determines are no longer "necessary in the public interest as the result of competition." Free State Foundation Senior Fellow Andrew Long briefly wrote about this case in an October 2020 blog post. 

For years and years, a divided panel of the Third Circuit has effectively blocked any significant modernization of the FCC's media ownership rules. The Third Circuit has done so, in part, by continuing to emphasize the Supreme Court's older spectrum scarcity rationale as a basis for freezing in place long-outdated rules. The case now before the Supreme Court involves the Commission's 2017 decision to repeal certain cross-ownership rules. It's a welcome development that the Supreme Court has taken up the case. At the very least, the Court's forthcoming decision portends the end of the years-long tail-chasing exercise involving the Commission and the Third Circuit. 


A same-day analysis of the oral arguments can be found at SCOTUSblog. It has been remarked that the change in Administration could lead to the reinstatement of the media ownership restrictions that existed prior to the FCC's 2017 order. However, a prospective ruling by the Supreme Court that acknowledges the Commission's authority to make decisions based on the dramatic transformations in the media market would remove a major impediment to long-lasting reform. And such a decision likely would require even a pro-regulation-minded Commission to at least make some rule modifications in light of today's market conditions rather than return to the same rules that predated the 2017 order. 


Free State Foundation President Randolph May and I wrote about the FCC's media ownership rules in our Perspectives from FSF Scholars Paper, "It's Time for the FCC to Relinquish Control of Media Ownership."

Wednesday, January 20, 2021

FCC's General Counsel Sums Up Commission's Courtroom Successes

At the FCC's public meeting on January 13, the Commission's General Counsel Thomas Johnson presented on the accomplishments of the Office of the General Counsel during the past four years. As General Johnson sums things up in his presentation:  

Our Litigation team… won in whole or in substantial part 28 out of 31 appeals (or 90%) filed against the agency. We achieved these results despite being challenged on several of this administration's highest-profile items. When we restored a light-touch regulatory framework to broadband in the Restoring Internet Freedom Order, we were challenged in court. Yet, after our defense of the Order—in which I participated in a marathon 5 1⁄2 hour oral argument on a snowy February day following a government shutdown—the D.C. Circuit upheld our reclassification of broadband as a Title I information service. When we modernized our approach to state and local infrastructure siting requirements to accelerate American leadership in 5G deployment, we were challenged in court. But after no fewer than three of my attorneys defended our 5G infrastructure orders before the Ninth Circuit, the court upheld nearly all of our reforms. When we took an innovative and thoughtful approach to reallocating critical "C-Band" spectrum for 5G services, we again were challenged in court. But the D.C. Circuit in short order rejected all legal challenges to our C-Band Order, clearing the way for a record-breaking auction of the spectrum. 

Slides of the presentation are available here.


Prior FCC administrations have had notably less success in defending their policy agendas in court. The Commission's legal victories during the last four years demonstrates Chairman Ajit Pai's commitment to the rule of law as well as the able advocacy of General Johnson and his team. Congratulations to General Johnson and the Office for a job well done. 

Tuesday, January 19, 2021

President Trump Issues Executive Order for Agency Regulatory Accountability

On January 18, President Trump issued an Executive Order intended to increase the democratic accountability of executive branch agencies' regulatory activities. It requires senior appointees of the President to initiate the  Administrative Procedure Act (APA) process process at their agency, to sign finalized rules, and to approve their agency's regulatory agenda. The idea behind this executive order is to help ensure that federal agency heads chosen by the President – officials at least indirectly accountable through national elections – take responsibility for the actions of the agencies they oversee rather than pass of significant rulemaking and regulatory implementation decisions to subordinates who are insulated from the democratic process. Since federal agency heads chosen by the President are removable by the President, the Executive Order is thus a measure for increasing the President's responsibility for regulatory undertakings by the executive branch.

President Trump's Executive Order is consonant with the constitutional separation of powers. It doesn't reduce the powers of any particular executive branch agency, nor does it transfer any power away from the executive branch to the other branches. No lengthy or expensive process requirements are involved. Indeed, the Executive Order appears to be a common-sense measure for democratic accountability. Despite the late hour of the Executive Order's release, it would be to the next Administration's credit to retain and follow the Order. 

Saturday, January 16, 2021

"The Supreme Court, the FCC, and Communications Law" - Register Now for January 22!

The Free State Foundation's Virtual Webinar 

with Ilya Shapiro




WHAT: "The Supreme Court, the FCC, and Communications Law," a webinar featuring the Cato Institute's Ilya Shapiro


WHERE: Via Zoom


WHEN: Friday, January 22 – 11:00 AM - 12:15 PM EST

The Free State Foundation will host a webinar featuring remarks by Ilya Shapiro, director of the Cato Institute's Robert A. Levy Center for Constitutional Studies, and publisher of the Cato Supreme Court Review. He is the author of the recently acclaimed book "Supreme Disorder: Judicial Nominations and the Politics of America's Highest Court."


Mr. Shapiro will address the Supreme Court's current and prospective jurisprudence regarding the nondelegation doctrine, Chevron deference, the status of independent agencies, and other administrative law doctrines as they impact communications law and policy and FCC decisions such as net neutrality and speech regulation.


Following Mr. Shapiro's initial remarks, Christopher Yoo, John H. Chestnut Professor of Law, Communication, and Computer & Information Science, and Director of the Center for Technology, Innovation & Competition at the University of Pennsylvania Law School, and Seth Cooper, Director of Policy Studies and Senior Fellow at the Free State Foundation, will offer comments.


Register Now to Receive the Zoom Link!





Friday, January 15, 2021

Chairman Pai Offers Incisive Remarks on U.S. Spectrum Policy

For an excellent overview of the FCC's progress putting spectrum into commercial use during Chairman Ajit Pai's tenure, look no further than his remarks to the Information Technology Industry Council (ITI) on January 14. He also addresses the future of American spectrum policy.

Here are some key paragraphs concerning the Commission's initiatives to put mid-band spectrum into licensed commercial use: 

When I came into office in 2017, the cupboard was almost empty. The only mid-band spectrum in the pipeline was the 3.5 GHz band, which was saddled with misguided restrictions that weren’t going to encourage 5G deployment. So not quite “mark it zero,” but close. Despite starting from behind the eight ball, we turned things around, and in a big way. Under my direction, the FCC systematically identified mid-band airwaves that were being underused. This was a very complicated case, you know, a lot of ins, lot of outs, a lot of what have yous. But we figured it out and set plans in place to put these airwaves to work for the American people…


Put all these together—the C-band and the 3.5 GHz band, together with a future auction of the 3.45 GHz band—and we are on a path to have a contiguous 530-megahertz swath, from 3.45 to 3.98 GHz, of mid-band spectrum available for 5G. Not bad, considering where we started. That’s 5G FAST. 

Later, Chairman Pai describes the Commission's success in making much more spectrum available for unlicensed use:


These two initiatives, on 6 GHz and 5.9 GHz, will open up 1,200 and 45 megahertz of spectrum for unlicensed use, respectively. Now let’s talk about gigahertz—1,000 times as large. Through our 2019 Spectrum Horizons Order, the Commission made a massive 21.2 gigahertz of spectrum above 95 GHz available for unlicensed use across four frequency bands. 


Importantly, Chairman Pai squarely addressed the problem of other federal agencies putting up obstacles to the repurposing of more spectrum for commercial use:


[A]rguably the biggest thing hampering efforts to use spectrum more efficiently is—our own government. On proceeding after proceeding, we saw that other federal agencies tried to throw up roadblocks. Rather than look out for the public interest, many agencies were looking out for their narrow parochial interest. And since most don't have in-house spectrum expertise, they ended up simply parroting the exaggerated, hysterical, and often outright false claims being made by the industries they regulate. To achieve their aims, they ended up bypassing normal channels and complaining to Congress or the media in an effort to block or delay efforts to free up spectrum for commercial use. 


Chairman Pai offers wise words to his successor at the FCC in holding the line on spectrum reallocation. identifies the need for strong NTIA leadership going forward, and addresses the need to discuss reforms to the government's spectrum management framework. 


Be sure to check out Chairman Pai's remarks to ITI in their entirety.  

Text of FCC Chairman Ajit Pai's Farewell Free State Foundation Address Now Available

On January 8, the Free State Foundation hosted a virtual farewell address by FCC Chairman Ajit Pai. The topic was FCC process reform. The text of his remarks is now available on the FCC's website.

Chairman Pai discussed three pillars of good government: transparency, reliance upon economics and data analysis, and maximizing the effectiveness of the people who do the work of the agency – in his words, "the FCC's greatest asset."

As noted in an earlier post to the FSF Blog, video of Chairman Pai's speech can be accessed on our YouTube page.

The Free State Foundation congratulates Chairman Pai on his many accomplishments at the FCC's helm and wishes him well in all future endeavors.

Wednesday, January 13, 2021

IPEC's 2020 Report Highlights Federal Agencies' Pro-Copyright Initiatives

On January 7, the Intellectual Property Enforcement Coordinator (IPEC) released its Annual Intellectual Report to Congress for 2021. The report summarizes the Trump Administration's IP enforcement strategy and policy initiatives across numerous federal agencies. 

The IP Report rightly extols the constitutional basis for copyrights as well as its vitality to American prosperity: 

Intellectual property is integral to our nation’s economic competitiveness and the growth of our innovative economy. For instance, copyrights are not only economically important, but a key part of our culture and society. A well-functioning copyright system is essential. The U.S. copyright system is grounded in our Constitution, and built on centuries of extensive jurisprudence, statutes and regulations. 

Among other things, the IP Report recounts the Trump Administration's elevation of the IPEC within the Executive Branch: 

[U]nder the leadership of President Trump and with the support of Congress, the White House Office of the U.S. Intellectual Property Enforcement Coordinator (IPEC) was established as a new component agency of the Executive Office of the President and part of the National Economic Council, ensuring that in the decades to come the IPEC will be there to advise the President, coordinate policy, and advocate for American interests abroad.

The IP Report also overviews the Trump Administration's efforts through foreign trade agreements such as USMCA and other diplomacy efforts to ensure Americans' copyrighted works and other IP are better protected overseas. And the report includes appendices describing IP protection and enforcement initiatives undertaken over the last few years by Executive Branch Departments, the Office of the U.S. Trade Representative, as well as the U.S. Copyright Office. The Justice Department's appendix, for instance, highlights notable criminal infringement prosecutions. And the Copyright Office's appendix discusses the Section 512 Study Report that was released in May 2020. 


The need for an overhaul of Section 512 is the subject of my January 12 Perspectives from FSF Scholars paper titled "Congress Should Hold Big Tech Accountable for Copyright Violations." This year, expect Free State Foundation scholars to have more to say about needed pro-IP policy actions. 

Saturday, January 09, 2021

FCC Updates Over-the-Air Device Rule to Expand 5G

On January 7, the FCC approved a report and order to update its rule for over-the-air reception devices (OTARD) and thereby accelerate 5G fixed wireless infrastructure deployment. As briefly explained in my May 2019 blog, the OTARD rule prohibits local restrictions that unreasonably delay or prevent installation, maintenance or use of an antenna that is installed "on areas within the exclusive use or control" of a property owner or leaseholder. The order expands the rule to include hub and relay antennas used for the distribution of broadband-only fixed wireless services to multiple customer locations, regardless of whether they are primarily used for that purpose. 

According to the order:

Our updated rule will help spur the rapid deployment of fixed wireless networks needed for 5G and other fixed wireless high-speed Internet services. This will benefit consumers by offering faster access to advanced communications services and greater competition among service providers. 

The order cites evidence from the record indicating that this expansion of the OTARD rule will remove local barriers to the placement of equipment needed for fixed wireless network upgrades and reach more homes more quickly. 


Credit goes to the Commission for implementing its OTARD rule reform to bring next-generation wireless services to more Americans. 

Friday, January 08, 2021

MEDIA ADVISORY: Today's FCC Chairman Pai's Farewell Address at the Free State Foundation

Here is the link to the speech that FCC Chairman Pai delivered today at the Free State Foundation:

Topic: Farewell Address by FCC Chairman Pai
Start Time: Jan 8, 2021 10:36 AM

Meeting Recording:

Access Passcode: 0pzx@t2H

UPDATE: The YouTube video of the event is here.

Wednesday, January 06, 2021

Don't Miss a Farewell Address by FCC Chairman Ajit Pai on January 8 - Register Now!


WHAT: A Farewell Address by FCC Chairman Ajit Pai

WHERE: Via Zoom

WHEN: Friday, January 8, 2021 – 11:00 AM - 12:00 PM

The Free State Foundation is hosting a Virtual Farewell Address by FCC Chairman Ajit Pai. Following Chairman Pai's address, FSF President Randolph May and Senior Fellows Seth Cooper and Andrew Long will offer reactions.



UPDATE: YouTube video of the event is here.
                     The text of Chairman Pai's remarks is here.

Tuesday, January 05, 2021

FCC Seeks Input on COVID-19 Broadband Discount Program

As I noted in a recent post to the FSF Blog, the $900 billion COVID-19 relief package recently signed into law as part of the Consolidated Appropriations Act, 2021 includes $3.2 billion for an FCC-run Emergency Broadband Benefit Program (the Program).

The Program will reimburse participating broadband Internet service providers (ISPs) that offer discounts to eligible low-income households and those that have experienced financial hardship during the current public health crisis. The maximum amount of the discount on the standard rate is $50/month ($75/month on Tribal lands).

In addition, ISPs can receive a one-time payment, up to $100, for making available a subsidized connected device (tablet, laptop, or desktop).

The Program will run until six months after the end of the pandemic or the $3.2 billion in funding has been depleted, whichever comes first.

On January 4, 2021, the Commission publicized the release by the Wireline Competition Bureau of a Public Notice seeking comment on how best to administer the Program. It seeks input on a number of topics, including ISP, household, service, and device eligibility; expedited approval of ISP applications; the reimbursement process; awareness promotion; and auditing, enforcement, and reporting requirements.

Comments are due on January 25 and reply comments on February 16.