Friday, February 26, 2021

District Court Allows California's Net Neutrality Law to Go Forward

It has been reported in many outlets that the U.S. District Court for the Northern District of California has denied a motion to enjoin enforcement of California law mandating public utility regulation of broadband Internet services. Apparently, this will allow California's law – which goes beyond the FCC's now-repealed Title II restrictions – to go into effect. However, this is not likely the end of the litigation. Professor Daniel Lyons, a Member of the Free State Foundation's Board of Academic Advisors, made the case for why CA SB-822 is most likely preempted in his Perspectives from FSF Scholars paper, "Day of Reckoning Approaches for California Net Neutrality Law." 

Also, FSF President Randolph May and I appealed to a broader set of principles to make the case for why preemption of SB-822 is consistent with a constitutionalist outlook in our Federalist Society Review paper, "John Marshall's Jurisprudence Supports Preemption of California's Net Neutrality Law." And for more on these subjects, consult our bookA Reader on Net Neutrality and Restoring Internet Freedom

Leaving aside for now any future changes in federal broadband policy by the FCC, FSF scholars repeatedly have made the point that state-level regulation of broadband Internet access services is a bad idea. Broadband networks are interstate services. State and local restrictions effectively seek to regulate services that transcend state borders and run risk of conflicting with each other. And public utility regulation of broadband Internet services is harmful and justifiable. Policy for broadband Internet services should be set at the federal level, not the state or local level. 

Thursday, February 25, 2021

First Circuit Affirms Preliminary Injunction Against Maine's Cable Unbundling Law

On Wednesday, the U.S. Court of Appeals for the First Circuit affirmed a lower court decision barring from going into effect video programming unbundling legislation in Maine that exclusively targets cable operators.

The Maine law (LD 832) requires cable operators to offer individual channels and programs on an a la carte basis. Satellite, Internet-based, and other competing providers of multichannel video programming services remain free to package content, and market it to consumers, however they choose.

Shortly after LD 832 became law in June 2019, Comcast of New Hampshire/Maine and a group of cable programmers sought declaratory and injunctive relief from the U.S. District Court in Maine.

The plaintiffs argued that the Maine law is preempted by federal law and runs afoul of the First Amendment in two ways. First, it singles out cable operators. Second, it infringes upon cable operators' protected editorial discretion regarding how they package programming.

In December 2019, the District Court in Maine granted a preliminary injunction solely on the basis that LD 832 improperly singles out cable operators. It rejected the preemption and editorial-discretion arguments. With respect to the latter, the court's decision hinged upon an inappropriately narrow interpretation of the U.S. Supreme Court's 1994 Turner I decision recognizing that First Amendment protections apply to cable operators' programming decisions.

As Free State Foundation President Randolph J. May and I explained in a July 2020 Perspectives from FSF Scholars, numerous Supreme Court decisions, including Turner II, make plain that cable operators' First Amendment protections do extend to decisions as to how content is packaged. We therefore expressed hope that the appellate court would take up this issue.

The First Circuit affirmed the District Court in Maine's grant of a preliminary injunction, but did so solely on the basis that LD 832 "constitutes a speaker-based regulation that 'singles out' cable operators' speech for special, disfavored treatment." Regrettably, it declined to consider whether the law also infringes cable operators' protected editorial discretion.

Maine must now decide if it wants to pursue the case further. If it does, one threshold issue that the District Court must decide is "whether additional, post-enactment evidence can be offered in support of the law." For as the First Circuit noted, "[t]he state candidly conceded at oral argument that, if the Act triggers the First Amendment at all, the existing record is insufficient to justify the law …."

A copy of the First Circuit decision is available here.

Wednesday, February 24, 2021

Emergency Broadband Benefit Program Should Help Americans Using Smartphones

Smartphones with 4G and 5G capabilities provide users the same essential Internet connectivity functions as tablet devices. And smartphones are extraordinarily popular for accessing the Internet – especially for low-income households, for younger Americans, and for education-related uses. The FCC ought to treat smartphones as eligible connected devices for the Emergency Broadband Benefit (EBB) program. 

The Commission is now preparing rules to implement EBB program, which will enable eligible households to receive broadband Internet services and connected devices at discounted prices. The EBB program is intended to help out Americans who have been hit hard by the COVID-19 pandemic and lockdowns. Under the EBB program, broadband providers who provide Internet access and connected devices to eligible households can receive reimbursements from a $3.2 billion fund established by Congress. Section 904 of the Consolidated Appropriations Act of 2021 authorized the Commission to implement the EBB program. 


Apparently, there has been some question within the Commission about whether smartphones provided to eligible households should be considered "connected devices" for purposes of discount reimbursements under the Act. According to Section 904(a)(4) of the Act, a "connected device" means "a laptop or desktop computer or a tablet." The Act provides no further guidance regarding the meaning of those terms. But the Commission has discretionary authority to interpret the term "tablet" to include "smartphone." 


In its 2020 Communications Marketplace Report, the Commission cited 2019 estimates that over 106 million households have smartphones – of which nearly 93 million households subscribe to mobile data plans. It cites surveys indicating smartphone population penetration rates of 80% to 85% at the in 2017 and 2018 – a number that surely is higher in early 2021. The report also cited a 2019 survey indicating that smartphone-only Internet users are particularly popular among lower-income households, and especially for young people and for educational uses:

(click to enlarge)

In addition to being widely used for accessing the Internet, there is no meaningful distinction between smartphones and tablets regarding broadband-related capabilities. Both are portable and both feature the same or similar apps as well as voice, HD-or-better video, and high-speed Internet connectivity. At the very least, the Commission has discretion to interpret the Act's term for "associated equipment" to include smartphones. Indeed, many Americans use smartphones as hotspots in order to connect laptops and tablets to the Internet. 


By making smartphones eligible devices for EBB reimbursements, the Commission can help ensure that the program serves its purpose in helping Americans in difficult circumstances access school work, apply for jobs, receive telehealth services, and engage in other important life activities. In fact, smartphone inclusion in the EBB program could give a boost to those Americans who now are the most in need. 

MEDIA ADVISORY: Media, Journalists Should Condemn House Democrats' Media Threats

The following statement may be attributed to Free State Foundation President Randolph May regarding the proposal of some House Democrats to curtail cable networks' media choices:

When President Trump suggested that broadcast licenses should be challenged at the FCC because he disagreed with the broadcasters' editorial judgments, I was quick to condemn Trump's suggestion. As I said in October 2017, "Absent clear evidence of deliberate falsification or conscious, willful distortion of the news by media outlets, for Trump to urge challenges to FCC licenses because of disagreements over editorial decisions threatens to chill the First Amendment rights of the media." For some House Democrats now to suggest that certain cable and satellite operators shouldn't carry channels like Fox News, One America, Newsmax, and others because of what they claim is "misinformation" carried by the outlets is truly misguided and dangerous. If they continue down this road, and if they are successful in threatening media outlets to stop broadcasting speech they disfavor under the guise of regulating "misinformation," the First Amendment free speech rights of all will be seriously eroded. It should be obvious that a wide swath of speech that nowadays is labeled misinformation by those that wish to curtail it is lawful speech that falls within what should be the realm of legitimate public debate.

Almost all mainstream media outlets, journalists, and "consumer" organizations, most especially left-leaning ones, were lightening quick to condemn President Trump's remarks regarding media coverage. Wouldn't it be nice if they were as quick and vocal condemning the House Democrats' proposal? Not only nice - but important.

Tuesday, February 23, 2021

Online Piracy Poses Substantial Malware Threat to Employer Networks via Remote Access

Digital Citizens Alliance, a nonprofit focused on the threats consumers face on the Internet, has releasedresearch survey highlighting a disturbing connection between online piracy, working from home, and employer network security threats.

As a consequence of the COVID-19 pandemic, millions of Americans are working remotely. When employees allow piracy devices and apps to access their home Internet connections, they open the door to malware attacks.

Alarmingly, it appears that a significant number of consumers do just that: 1 in 5 of those surveyed admitted to visiting a piracy website, 1 in 10 to using a piracy device.

Home networks that include piracy devices, or other devices running piracy apps, are three times more likely to experience issues relating to malware, which in turn expose the employer networks that they are used to access to cybersecurity risks.

Such concerns are particularly troubling with respect to those employees remotely accessing systems upon which confidential or sensitive data is stored.

Fully half of the respondents with access to such information and piracy devices attached to their home networks had issues relating to malware during the previous 12 months. By contrast, less than 20 percent of those not using piracy devices reported malware infections.

Monday, February 22, 2021

Save the Date - March 23 - FCC Commissioner Brendan Carr to Deliver Keynote Address


Free State Foundation 

Thirteenth Annual Telecom Policy Conference



Keynote Speaker

FCC Commissioner Brendan Carr 


WHAT: FSF's Thirteenth Annual Telecom Policy Conference – A Keynote Address 


WHERE: Via Zoom


WHO: FCC Commissioner Brendan Carr


WHEN: Tuesday, March 23, 2021, 11 a.m., EDT

FCC Commissioner Brendan Carr

* * * * *

The Free State Foundation's Twelfth Annual Telecom Policy Conference was held at the National Press Club last March 10. As it turned out, it was one of the very last, if not the last, major conferences held in D.C. before the COVID-19 shutdown. We considered ourselves very fortunate that we were able to hold the conference - with its outstanding speaker lineup - and we set our sights on this year's event. We just assumed, without nary a thought, that we would be back at the Press Club this year.


Well, here we are, and the reality is, we really don't know when we can safely hold a large scale in-person event. In recent years, FSF's annual conferences routinely have attracted 180 - 200 attendees. So this year we will be holding our Thirteenth Annual Telecom Policy Conference via Zoom on different days during March and April. As usual, we plan to have a mix of keynote addresses, conversations, and panels.


To kick off the conference, FCC Commissioner Brendan Carr will present a keynote address on Tuesday, March 23, 11 a.m.- 12 p.m.


The Free State Foundation's Annual Telecom Policy Conference is widely acknowledged to be one of the nation's premier communications law and policy events, and - just as we have for the past several months - we intend this year to continue to present interesting, informative, and impactful programs.


Finally, this June marks the Free State Foundation's Fifteenth Anniversary. We hope to put on a proper in-person celebration of this important milestone later in the year. But, in the meantime, don't be surprised if we bring a bottle or two of champagne to one of our online events!






Friday, February 19, 2021

Coalition of Trade Associations Sue Over Maryland Digital Ad Tax

In a Tuesday post to the Free State Foundation's Blog, I reported that both chambers of the Maryland General Assembly had voted, by substantial margins, to override Governor Larry Hogan's veto of a gross revenues tax on digital advertising services. As anticipated, yesterday a group of trade associations sued in the U.S. District Court for the District of Maryland (Northern Division) seeking declaratory and injunctive relief.

Filed by the Chamber of Commerce of the United States of America, Internet Association, NetChoice, and the Computer & Communications Industry Association, the complaint alleges that H.B. 732 "is a punitive assault on digital, but not print, advertising" and "is illegal in myriad ways."

Specifically, the plaintiffs argue that H.B. 732 (1) "is preempted by the Internet Tax Freedom Act (ITFA), which prohibits States from imposing 'multiple and discriminatory taxes on electronic commerce,'" and (2) "violates the Due Process Clause and Commerce Clause of the United States Constitution by burdening and penalizing purely out-of-state conduct and interfering with foreign affairs."

A copy of the complaint can be found here.

Wednesday, February 17, 2021

Maryland's Digital Ad Tax to Become Law After Veto Override

Maryland's first-in-the-nation gross revenues tax on digital advertising services will take effect in less than 30 days. Legal challenges likely will follow soon thereafter.

H.B. 732, passed by the General Assembly at the end of the pandemic-shortened 2020 legislative session, was vetoed by Governor Larry Hogan. On Friday, the State Senate voted 29-17 to override that veto. The House of Delegates did the same the day prior, by an 88-48 margin.

H.B. 732 imposes a gross revenues tax on digital advertising services provided by companies that earn more than $100 million globally. Gross annual revenues will be taxed at rates that begin at 2.5 percent (for companies with revenues between $100 million and $1 billion) and increase to 5 percent (revenues between $1 billion and $5 billion), 7.5 percent (revenues between $5 billion and $15 billion), and 10 percent (revenues over $15 billion).

As Free State Foundation President Randolph J. May and I described last spring in a post to the FSF Blog and an op-ed in the Baltimore Sun, this tax will harm both consumers and businesses in Maryland. The higher marketing costs that result inevitably will lead to higher prices for the goods and services advertised, lower consumption, and reduced tax revenues. It also is vulnerable to legal challenges under the Permanent Internet Tax Freedom Act, the Commerce Clause, and the First Amendment.

S.B. 787 and companion bill H.B. 1200, introduced on February 5 and 8, respectively, would modify H.B. 732 by (1) exempting the "digital interfaces" (that is, websites and apps) of television and radio broadcasters and news media entities, and (2) prohibiting those subject to the tax from passing on its costs directly via a separate fee, surcharge, or line item. However, the proposed legislation would not bar providers of digital advertising services from recouping those costs indirectly via higher prices.

Tuesday, February 16, 2021

Commissioner Simington Maiden Speech to the Free State Foundation

Today, the Free State Foundation was pleased to host FCC Commissioner Nathan Simington for a virtual event. Commissioner Simington delivered his first address since taking office, and he answered questions from FSF President Randolph May. We are grateful to Commissioner Simington for his substantive address and thoughtful answers to questions. The text of Commissioner Simington's prepared remarks are now posted at the Commission's website. 

UPDATE: Video of the event is also now available: 

Tuesday, February 09, 2021

Report Projects Astonishing Rise in Wi-Fi's Economic Value

On February 3, the Wi-Fi Alliance® released a study titled "Global Economic Value of Wi-Fi® 2021-2025." The report estimates that the current worldwide value of Wi-Fi is $3.3 trillion, and that it will reach $4.9 trillion by 2025. 

As the report observes: "The United States remains one of the countries with the widest Wi-Fi adoption and use." It credits the high numbers of paid Wi-Fi access points and public Wi-Fi sites. According to the report, "[t]he total economic value of Wi-Fi in 2021 is $995 billion. With the new allocation of 1200 MHz in the 6 GHz band, as well as market penetration of Wi-Fi 6, the value of Wi-Fi will grow to $1.58 trillion by 2025."

Free State Foundation scholars have supported FCC initiatives in its 6 GHz and 5.9 GHz to put spectrum into unlicensed use, including for technologies such as unlicensed Wi-Fi. As Free State Foundation Senior Fellow Andrew Long explained in his Perspectives from FSF Scholars paper, "Wi-Fi 6G Can Modernize Unlicensed Wireless," the new Wi-Fi 6E standard will usher in a new era of unlicensed wireless growth and innovation. 


It will be exciting to see these spectrum allocations to unlicensed use and the widespread adoption of Wi-Fi 6E devices pay dividends in terms of faster, more capacious, and extra-reliable Wi-Fi connections as well as new uses. Yet at the same time, the Wi-Fi Alliance report should lead us to recognize the need to build up the U.S. stock of mid-band spectrum for licensed commercial use. As the report points out, the FCC has dedicated significant mid-band spectrum resources to unlicensed Wi-Fi use. Analysys Mason's "Comparison of Total Mobile Spectrum in Different Markets" report from June 2020 identified the U.S. as the nation with by far the highest amount of unlicensed mid-band spectrum assigned to unlicensed use – at 1,860 MHz. Free State Foundation scholars will have more to say soon on repurposing additional mid-band spectrum for licensed commercial use. 

Monday, February 08, 2021

FSF President Randolph May Defends Private Sector Leadership on 5G

Below are tweets from today by Free State Foundation President Randolph May that reassert the U.S. policy strongly favoring private sector-led commercial mobile wireless services and push back against the idea of the Department of Defense entering the 5G commercial market to compete against private enterprise.

Friday, February 05, 2021

Virginia's Consumer Data Protection Act Soon Could Become Law

Virginia is poised to become the second state to adopt a data privacy law. California led the way, first with the passage in 2018 of the California Consumer Privacy Act (CCPA) and, more recently, via voter approval in the November 2020 election of Proposition 24, the California Privacy Rights Act (CPRA).

The Virginia Consumer Data Protection Act (CDPA) includes the following key provisions:

  • New Consumer Private Rights: The CDPA grants consumers the right to access, the right to amend, and the right to delete personal data; the right to data portability; and the right "[t]o opt out of the processing of … personal data for purposes of (i) targeted advertising, (ii) the sale of personal data, or (iii) profiling in furtherance of decisions that produce legal or similarly significant effects concerning the consumer."
  • Definition of "Personal Data": The CDPA defines "personal data" as "any information that is linked or reasonably linkable to an identified or identifiable natural person. 'Personal data' does not include de-identified data or publicly available information."
  • Definition of "Sensitive Data": "Sensitive data," for which consumer or parental opt-in consent must be obtained before it is processed, is defined as a subset of "personal data" that includes (1) information "revealing racial or ethnic origin, religious beliefs, mental or physical health diagnosis, sexual orientation, or citizenship or immigration status;" (2) "[t]he processing of genetic or biometric data for the purpose of uniquely identifying a natural person;" (3) "[t]he personal data collected from a known child;" and (4) "[p]recise geolocation data."
  • Covered Entities: The CDPA "applies to persons that conduct business in the Commonwealth or produce products or services that are targeted to residents of the Commonwealth and that (i) during a calendar year, control or process personal data of at least 100,000 consumers or (ii) control or process personal data of at least 25,000 consumers and derive over 50 percent of gross revenue from the sale of personal data."
  • Enforcement: The CDPA exclusively authorizes the state attorney general to enforce its provisions via civil actions. There is no private right of action and covered entities are entitled to a 30-day cure period.

On February 3, the Virginia Senate unanimously passed SB 1392, identical companion legislation to HB 2307, which easily cleared the House of Delegates by a 89-9 vote on January 29. Should Governor Ralph Northam sign the bill into law, it would become effective on January 1, 2023.

I have argued in posts to the Free State Foundation Blog as well as Perspectives from FSF Scholars that what is needed is a single set of privacy rules that apply nationwide and preempt state laws. In the absence of federal legislation, however, we continue to see activity at the state level.

Additional states currently considering data privacy legislation include Washington, New York, and Oklahoma.

Thursday, February 04, 2021

Report Emphasizes 5G Job Creation and Boost to the US Economy

A new report by Boston Consulting Group (BCG) titled "5G Promises Massive Job and GDP Growth in the US" estimates the significant economic boost that the American economy will receive on account of next-generation wireless network deployment. The report was released on February 2, 2021. 


According to BCG's report, "5G deployment will contribute $1.4 trillion to $1.7 trillion to US GDP and create 3.8 million to 4.6 million jobs" over the next ten years. The report provides a helpful overview of the primary stages of 5G development – "foundation," "expansion," and "augmentation." Coinciding with those three states of development, BCG's report projects that 5G will first drive economic activity through network infrastructure deployment but then enable "an even greater wave of economic activity" indirectly as 5G networks enable new uses across manufacturing, construction, health care, and other industries. 

The expected economic benefits from 5G networks should prompt Congress, the FCC, and NTIA to continue infrastructure siting reforms as well as efforts to make more spectrum available for commercial 5G services. 


BCG's new report on 5G's job and GDP prospects is a follow-up to a report I covered in a September 2020 blog post

Wednesday, February 03, 2021

Save the Date! FCC Commissioner Nathan Simington's Maiden Address - February 16

FSF Block Logo

WHAT: Maiden Address by FCC Commissioner Nathan Simington

WHERE: Via Zoom

WHEN: Tuesday, February 16 – 11:00 am - 12:00 pm EST

The Free State Foundation is very pleased to host FCC Commissioner Nathan Simington for his maiden address.

Please mark the date and time on your calendar now. Registration information will follow shortly.

Tweet #FSFSimington

Tuesday, February 02, 2021

Charter Announces Ambitious Project to Deploy Broadband to Over One Million Unserved Locations

Yesterday Charter Communications announced a new multiyear, multibillion-dollar initiative to deliver gigabit broadband speeds to over a million customer locations in rural and other areas presently unserved.

Charter will invest $5 billion in this infrastructure expansion project, including $1.2 billion that it won in the Rural Digital Opportunity Fund (RDOF) Phase I reverse auction. This large-scale effort, which will extend Charter's fiber optic network in 24 states, is in addition to existing, privately funded buildout plans.

The project is expected to generate 2,000 new jobs and expand Charter's network mileage coverage by 15 percent.

In announcing the initiative, Tom Rutledge, Chairman and CEO of Charter Communications, explained that "[t]he pandemic has further highlighted the need for broadband availability and adoption and Charter is committed to furthering its efforts as part of the comprehensive solution needed to address these challenges."

One potentially significant external factor that could impact the timing of this project: utility pole permitting and "make-ready" processes.

Free State Foundation President Randolph May and Director of Policy Studies and Senior Fellow Seth Cooper submitted comments to the FCC in September 2020 in support of a Petition filed by NCTA – The Internet & Television Association seeking an expedited declaratory ruling regarding pole replacements and pole attachments.

Specifically, they argued that the Commission should:

  • Prohibit utility pole owners in unserved areas from requiring broadband providers to bear the entire costs of new replacement poles;
  • Place pole attachment disputes on its accelerated docket to expedite their resolution; and
  • Clarify that it has authority to order pole owners involved in disputes involving unlawful delays and denials to complete pole replacements within specific timeframes.

Mr. Cooper posted to the FSF Blog on this topic, as well.

On January 19, 2021, the Wireline Competition Bureau released a Declaratory Ruling that, while declining to weigh in broadly on the issues presented in the Petition filed by NCTA, did narrowly "clarify that it is unreasonable ... for utilities to impose the entire cost of a pole replacement on a requesting attacher when the attacher is not the sole cause of the pole replacement."

Comcast Announces Additional Voluntary Steps to Promote Broadband Adoption, Remote Learning, and Digital Equity

Comcast launched its low-cost Internet Essentials program in 2011. Over the last decade, it has connected millions of eligible low-income families at the discounted price of $9.95 per month, provided tens of thousands of free laptops, and invested hundreds of millions to promote digital literacy.

The ongoing public health crisis has focused greater attention on digital divides, remote learning, and digital equity. Today Comcast announced additional voluntary efforts to address these concerns.

Comcast's Internet Essentials program arguably is the leading example of the broadband industry's commitment to make high-speed Internet access more affordable for low-income families, but there certainly are others.

Such programs have been highly successful. So successful, in fact, that Congress made sure to leverage them in the recently passed COVID-19 relief package.

As I described in a recent post to the Free State Foundation's blog, Congress has appropriated $3.2 billion to the FCC for an Emergency Broadband Benefit Program that will provide discounts on broadband service during the COVID-19 pandemic. In doing so, it directed the agency to automatically approve providers offering "an established program as of April 1, 2020, that is widely available and offers internet service offerings to eligible households and maintains verification processes that are sufficient to avoid fraud, waste, and abuse."

The additional actions that Comcast announced today "to help connect as many Americans to the Internet as possible and create new opportunities for underrepresented communities through the education, resources, and skills training they need to succeed in today’s digital economy" include:

  • Increasing, automatically and at no cost, Internet Essentials downstream speeds from 25 to 50 Mbps and upstream speeds to 5 Mbps for all new and existing customers on March 1;
  • Continuing to provide 60 days of free service to new Internet Essential customers through June 30, 2021;
  • Expanding its commitment to connect Lift Zones – safe spaces at Boys & Girls Clubs and other locations where students can access free Wi-Fi – to cover 1,000 locations by the end of 2021; and
  • Providing $3.5 million in grants to "help[] more people of color gain the education and critical workforce development skills needed to access career opportunities in media and technology" as part of its $40 million pledge in 2020 to invest in partners focused on education and digital equity. Current recipients include CodePath, Genesys Works, Jobs for the Future, NPower, i.c. stars, Opportunity at Work, Goodwill Industries International, YWCA, and Philadelphia Youth Network.
As I highlighted in a May 2020 Perspectives from FSF Scholars, Comcast and other broadband providers didn't merely sign on to then-Chairman Pai's Keep Americans Connected pledge; many elected to go above and beyond the specific commitments – not terminating service to those unable to pay as a result of the pandemic, waiving late fees, and opening Wi-Fi hotspots to all Americans – set forth therein.

Providing new Internet Essentials customers with 60 days of free service was just one of the steps Comcast took at that time. Others included increasing downstream speeds from 15 to 25 Mbps, providing two months of free service to university students, and suspending data limits.

Further details on Comcast's commitment to education and digital equity are available here.

FSF President Randolph May on C-SPAN Discussing Social Media

This past weekend I appeared on C-SPAN's "The Communicators" program discussing the problems with social media and what to do about them -- if anything. Appearing with me was Public Knowledge's Harold  Feld.

You can watch the program here.