Monday, February 28, 2022

Supreme Court Ends Legal Challenge to Limits on Cable Franchising Authorities

On February 22, the Supreme Court denied a petition for certiorari in City of Eugene v. FCC. The Supreme Court's denial of the petition leaves standing a decision by the Sixth Circuit Court of Appeals that upheld most of a 2019 order by the Commission that clarified limits on local franchising authorities (LFAs) with respect to cable infrastructure. This is welcome news because the Commission's 2019 order is an important reform that helps keep state and local governments from regulating broadband Internet access services.   

As explained in my blog post from June 2021, the Sixth Circuit upheld the Commission's "mixed use rule" – which clarifies that LFA's may not use their cable franchising authority to regulate non-cable services such as broadband Internet access services. Also, the Sixth Circuit upheld the Commission's determination that in-kind obligations imposed by LFAs on cable operators count toward Section 622(b)'s limit on how much LFAs can charge cable operators. Under Section 622(b), LFA's can charge cable operators no more than an amount equal to 5% of their gross revenues during any 12-month period.


Additionally, Free State Foundation Legal Fellow Andrew Magloughlin wrote a blog post on January 12 of this year about the certiorari petition in City of Eugene v. FCC and offered solid reasons why the Supreme Court should deny it. 

Friday, February 25, 2022

Rehearing Requested in Ninth Circuit on California's Net Neutrality Law

On February 11, a group of broadband Internet service providers (ISPs) filed a petition with the Ninth Circuit Court of Appeals, requesting a rehearing en banc of the court panel's January 2021 decision in ACA Connects v. Bonta. The panel upheld California's law imposing public utility regulation on broadband Internet service providers operating in that state.  

In their petition for rehearing, the ISPs argue that the panel decision wrongly characterized the D.C. Circuit's decision as holding that the FCC's Restoring Internet Freedom Order "surrendered" or "abandon[ed]" its statutory authority over broadband – and thereby eliminated the order's conflict preemptive power. As the petition points out, the D.C. Circuit expressly stated in Mozilla that the Commission "can invoke conflict preemption" when "a practice actually undermines" the order.

Additionally, the ISPs' argue that the panel decision's conclusion that California's law merely regulates intrastate communications that touch on interstate communications is in conflict with circuit court precedents. According to the ISPs, the Ninth Circuit as well as other circuits have recognized that Internet access is jurisdictionally interstate and that a state's authority over intrastate communications does not encompass regulation of facilities providing both intrastate and interstate service in conflict with federal law. 


In a press release on January 28 of this year, Free State Foundation President Randolph May responded to the news of the Ninth Circuit panel's decision in Bonta. For a legal critique of California's law imposing public utility regulation on Internet access services, see Prof. Daniel Lyons' Perspectives from FSF Scholars paper, "Day of Reckoning Approaches for California Net Neutrality Law." 

Thursday, February 24, 2022

PRESS RELEASE: FSF President Randolph May Commends FCC's Proposed Pole Attachment Rulemaking



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


“I am pleased the FCC has proposed to begin a new rulemaking proceeding seeking comment on questions concerning the allocation of pole replacement costs and the resolution of pole attachment disputes. FSF filed comments in September 2020 urging the FCC to begin such a proceeding, and it is important that the agency now do so and complete it in an expeditious manner.


As we said in our earlier comments urging Commission action, issues surrounding pole attachments 'are increasingly important and quickly resolving them in a pro-deployment, pro-consumer way can make a real difference.’ The reality is that pole attachments are a critical component of the infrastructure that supports more ubiquitous broadband deployment. Unless the costs of pole replacements are equitably apportioned so that would-be attachers are not charged above-market rates, and an efficient process is put in place to quickly resolve disputes, then overall broadband deployment to currently unserved areas will be slowed. This is a problem at any time, but especially now that the federal government is disbursing massive amounts of money in efforts to close digital divides, including in presently unserved rural areas.


So I urge the Commission to initiate the proposed rulemaking proceeding and to complete it in an expeditious manner."


Tuesday, February 22, 2022

AT&T's 3G Network Sunset Will Enhance 5G Services for Consumers

Today, AT&T is shutting down its 3G Universal Mobile Telecommunications Service (UMTS) network so that it can repurpose more of its licensed spectrum to 5G. AT&T's 3G-to-5G transition is an important milestone, as AT&T is the first nationwide wireless provider to entirely close down its legacy 3G network. Plans to close down the 3G UMTS network were publicly announced by AT&T in February 2019, and it was recently reported that data traffic on the legacy network dwindled to less than 1% of AT&T's overall network traffic. Overwhelmingly most services that were previously using 3G services heeded the three years advance notice and have moved to 4G LTE or 5G network services. And some services have secured other means to enable their 3G devices to connect to next-generations networks.

Despite receiving ample advance notice regarding AT&T's 3G network sunset, the alarm industry has sought government intervention to delay it. However, the FCC has declined to step in. The Commission's refusal to intervene is likely because the agency lacks any legal authority to stall the 3G-to-5G transition. Additionally, any government-imposed delay would inhibit the ability of AT&T to optimize their 5G networks, offer consumers faster and more capacious services, and more effectively compete in the wireless market. 


For more on this matter, see my September 2021 Perspectives from FSF Scholars, "AT&T's Sunset Will Make Way for Speedy 5G Services: Technology Transitions Shouldn't Be Delayed by Special Pleading." Also see my November 2021 blog post, "FCC Should Dismiss Alarm Industry's Petition to Stall 3G-to-5G Transition."

Friday, February 18, 2022

The Sunset of T-Mobile's Legacy 3G CDMA Network is Drawing Near

An article published in Fierce Wireless on February 8 reports that a California Administrative Law Judge (ALJ) has recommended that the California Public Utilities Commission (CPUC) deny a petition by DISH Network that seeks to delay T-Mobile's shutdown of the 3G CDMA network that it acquired in its merger with Sprint. T-Mobile is scheduled to closed down the legacy network so that it can repurpose more of its spectrum to support 5G services. DISH has claimed that it was not given reasonable notice about the timeframe for T-Mobile's planned 3G sunset, and it seeks an order by the California agency to delay the sunset. But as reported by Ms. Monica Alleven in Fierce Wireless, the ALJ found that it was reasonable to leave any decision about what constitutes "reasonable notice" regarding the proposed 3G shutdown to the federal government.  

The importance of transitioning spectrum from legacy services to next-generation services was the subject of my August 2021 Perspectives from FSF Scholars, "T-Mobile's Timely 3G Sunset Will Spur Stronger 5G Services: Early 2022 CDMA Network Retirement Shouldn't Be Slowed." In that Perspectives, I wrote:

The generally recognized industry-wide phase-out and retirement of 3G networks, T-Mobile's unmistakable intent that it would retire Sprint's deficient CDMA network, and T-Mobile's track record in transitioning MetroPCS subscribers within 15 months all go to show that the advance notice given to DISH was reasonable. And it would be wrong to insist that those unforeseeable post-notice occurrences events like lockdowns and chip shortages somehow make T-Mobile's advance notice to DISH or its act of providing advance notice retroactively unreasonable. Those post-notice facts simply aren't relevant to the reasonableness of T- Mobile's advance notice regarding its CDMA network shutdown.

Moreover, DISH could have negotiated for stronger minimum reasonable advance notice protections against risk of loss from future events that might hamper its ability to migrate Boost customers in response to the retirement of Sprint's CDMA network. But it negotiated only for a six-month minimum for reasonable advance notice, and the actual notice it received came several months ahead of the agreed upon minimum. 

After the publication of the August 2021 Perspectives, T-Mobile agreed to push back the 3G CDMA network shutdown to March 31 of this year. DISH has requested the shutdown be delayed to as late as July 2023. The CPUC will consider the AJL's recommendation that DISH's petition be denied at its public meeting on March 17.  

Thursday, February 17, 2022

Study Predicts Near Doubling of Wireless IoT Market by 2026

A new study from Juniper Research makes noteworthy projections about the future of 5G in the American economy. The study, titled Cellular IoT: Strategies, Opportunities & Market Forecasts 2022-2026, predicts that the wireless Internet of Things (IoT) market will nearly double in revenue by 2026. Juniper Research predicts that low power wide area (LPWA) connections will comprise most of the IoT market growth, with strong growth also coming from 5G connections.

The study finds that "the global value of the cellular IoT market will reach $61 billion by 2026; rising from $31 billion in 2022." This is a 95% value increase. That growth will come from two main areas: 5G and LPWA.

Juniper projects that 5G revenues will total roughly $9 billion in 2026, a strong 1000% growth from the roughly $800 million in 2021. Juniper noted "network slicing and edge computing" as important services for boosting 5G revenue growth during this period.

Juniper also projects that LPWA connections will grow 1200% by 2026, fueled by low costs for connectivity and hardware. LPWA adoption accounts for a larger portion of Juniper's predicted IoT market growth than 5G. LPWA networks typically involve low-bandwidth devices connected to low-power LTE. The advantage of LPWA networks is strong coverage over a geographic area, including penetration of building walls, for low-bandwidth uses. An example of a LPWA use case is a network of remote monitoring sensors, often useful for industries such as agriculture and manufacturing.

Wednesday, February 16, 2022

FCC Rule Removing Barriers to Fixed Wireless Broadband Deployments Upheld

On Friday, in Children's Health Defense v. FCC, the D.C. Circuit upheld the FCC's 2021 OTARD Order that expanded the scope of its rule preempting restrictions on broadband Internet rooftop antennas to include all "hub and relay" antennas. Free from such unreasonable deployment barriers, fixed wireless broadband providers are better able to compete against other distribution technologies and serve the needs of consumers.

For background, the Telecommunications Act of 1996 directed the Commission to adopt rules that promote intermodal competition in the video market by preempting state, local, and covenant-based restrictions on the installation of rooftop antennas. Congress mandated this rulemaking because states, localities, multitenant building owners, and home owners' associations often banned rooftop antennas needed for "wireless cable" and satellite TV services, or at minimum saddled them with unreasonably burdensome compliance costs and other obligations.

In response, the Commission adopted its "over-the-air reception device" (OTARD) rule, which preempts regulations that "unreasonably delay or prevent installation" or "unreasonably increase the cost" of rooftop antennas smaller than 1 meter in diameter and no higher than 12 feet above the roofline. In subsequent years, the Commission has updated the OTARD rule multiple times, including expanding the scope of the rule to cover rooftop antennas used for fixed wireless broadband service.

The 2021 OTARD Order is the latest of these updates, revising the OTARD rule to conform with current technical realities of fixed wireless broadband offerings, many of which involve "mesh" networks that rely upon a greater number of smaller antennas. Pursuant to the Order, the OTARD rule now preempts regulation of all "hub" rooftop antennas used for fixed wireless broadband service that fall within the rule's dimension limits. Prior to this Order, the OTARD rule only protected hub antennas used to serve the specific location to which they were attached.

Consumers stand to benefit from the 2021 OTARD Order because it enables fixed wireless providers to deploy the equipment needed to improve and expand network performance.

The D.C. Circuit upheld the 2021 OTARD Order against multiple attacks from petitioners. First, the court rejected petitioners' claim that the FCC lacked authority to expand the OTARD rule, holding that the text of Section 303 of the Communications Act and the Commission's interpretation of this section provided authority and a reasoned basis for its Order. According to the Court, Section 303 grants the Commission authority to regulate radio "stations," which the Commission has interpreted to mean individual antennas using radiofrequency (RF) spectrum. The Order is a lawful use of this authority.

Next, the court rejected petitioners' Administrative Procedures Act challenge that the Commission failed to consider health effects from RF exposure, concluding that this issue was outside the scope of the Order and best addressed in the Commission's RF proceedings. The court reasoned that federal agencies can designate specific proceedings to address specific issues, as the Commission had done in a 2019 rulemaking on RF exposure.

The court also rejected petitioners claim that the Order facially violates the Americans with Disabilities Act (ADA) and Fair Housing Act (FHA), determining that petitioners failed to show that the Order is unlawful in every application and because their arguments again relied on the supposed health effects of RF exposure. A facial challenge to an agency order requires that the order be invalid in every instance, and since the petitioners' claims here involved specific individuals protected by the ADA and FHA, they could not meet this burden. Further, even if petitioners could meet that burden, the claims involved assertions about the health effects of RF exposure that the Commission addressed in a separate proceeding.

Lastly, the court rejected petitioners' claim that the Commission unlawfully preempted state and local law, holding that Section 303 empowers it to do so.

However, the court noted in dicta that the Commission is "treading on thin ice" by preempting state and local statutes mandating community notice prior to the construction of commercial grade antennas, pointing out that such preemption may implicate the First Amendment. But because petitioners in this case relied on a facial challenge to the 2021 OTARD Order, the court did not rule on this narrower preemption issue.

Free State Foundation scholars are pleased to see the D.C. Circuit uphold a sound policy that fosters intermodal broadband competition by removing unreasonable barriers to the deployment of fixed wireless broadband equipment. Director of Policy Studies Seth Cooper wrote FSF Blog posts supporting the 2021 OTARD Order and proceeding. We hope to see more infrastructure reforms that remove broadband deployment barriers.

Tuesday, February 15, 2022

Congress Should Set Parameters for Improved Interagency Spectrum Coordination

Today, Free State Foundation President Randolph May and I published our Perspectives from FSF Scholars, "Congress Should Require Better Agency Coordination on Spectrum Policy." In this Perspectives, FSF President May and I recommended that Congress require the FCC and NTIA to update their Memorandum of Understanding (MOU) on spectrum coordination. Shortly after publishing the Perspectives, we learned that the FCC and NTIA announced their spectrum coordination initiative. 

In short, we welcome the FCC-NTIA announcement as a positive first step toward improving harmony between agencies on spectrum policy matters. But as explained in our Perspectives, in order to succeed in reducing agency clashes, an updated MOU needs to reaffirm the FCC's role as the expert independent agency on signal interference claims and NTIA's role as the sole representative of all executive branch agencies on spectrum. And the interagency process for expressing differing agency viewpoints and seeking consensus will need to will to be more formalized as well as respected in practice. In our view, it would be best if Congress adopts legislation to outline and guide the agencies' efforts to better coordinate on spectrum reallocation and use decisions.

For more on what ought to go into the updated MOU on interagency spectrum coordination, check out our Perspectives.  

Saturday, February 12, 2022

Thinking Clearly About Speaking Freely – Part 6 - Don't Miss Catholic Law's Inaugural Seigenthaler Debate


If all of mankind minus one were of one opinion, mankind would be no more justified in silencing that one person than he, if he had the power, would be justified in silencing mankind.” John Stuart Mill


*     *     * 


If you are concerned about the impact of today's raging Cancel Culture on the ability of Americans to speak freely on a wide range of subjects, including politics, culture, education, religion, race, and public health, then there is a good chance you are aware of Justice Clarence Thomas's concurring opinion last year in Biden v. Knight First Amendment Institute of Columbia University.


In a case involving President Donald Trump's control of his Twitter account, and his subsequent suspension from Twitter, Justice Thomas said this:

"Today’s digital platforms provide avenues for historically unprecedented amounts of speech, including speech by government actors. Also unprecedented, however, is the concentrated control of so much speech in the hands of a few private parties. We will soon have no choice but to address how our legal doctrines apply to highly concentrated, privately owned information infrastructure such as digital platforms."

Justice Thomas says there is a “fair argument” that Google, Facebook, Twitter, and perhaps other online platforms could be deemed common carriers. If so, they then would incur an obligation to carry, without discrimination, all lawful content posted to their sites. In other words, the platforms would be required to operate, for purposes of carrying or hosting content, in a nondiscriminatory fashion like the telephone and telegraph companies long deemed common carriers. 



In Part 3 of this "Thinking Clearly About Speaking Freely Series," I explored Justice Thomas's suggestion that Internet platforms, or at least the dominant ones, should be considered common carriers (or public forums, an alternative suggestion). I did not advocate – at least not then – adoption of his suggestion, and I remain skeptical for the reasons I have articulated. Nevertheless, given my ongoing concern that Internet platforms censor too much lawful content that ought to remain within the realm of legitimate debate and widely available to the public, I know that Justice Thomas's suggestion is worthy of discussion by serious scholars in a forum expressly dedicated to respectful debate. 


That's why the Free State Foundation is proud to co-sponsor, with Catholic University's Columbus School of Law, the inaugural Seigenthaler Debate, named in honor of the late John L. Seigenthaler. The virtual debate will be held on February 16 at 7:00 p.m. Mr. Seigenthaler, founder of the First Amendment Center and an editor of the Tennessean and USA Today newspapers, was widely acclaimed as a staunch advocate of free speech and freedom of the press.


The debate topic: "Resolved: “Should Internet Platforms Be Treated Like Common Carriers?” Eugene Volokh, Professor of Law at UCLA and a member of the Free State Foundation's Board of Academic Advisors, will argue in favor the resolution, and Ash Bhagwat, Professor of Law at University of California at Davis, will argue against.


I'm very much looking forward to the debate, and here I don't want to say more about the merits of the opposing positions than I have already – except these brief prompts. On the one hand, the Internet platforms, including Facebook, Twitter, and Google, which most often are accused of prohibiting or restricting legitimate debate, are private companies, generally protected by the First Amendment from government compulsion or interference relating to their content moderation decisions or practices.


On the other hand, consider this: Former Twitter CEO Jack Dorsey referred in congressional testimony to Twitter as a “public square” and “a global town square” while emphasizing the importance of a “free and open exchange” of ideas on the site. In a March 2019 post, Facebook CEO Mark Zuckerberg described Facebook as the “digital equivalent of a town square.” Google’s @TeamYouTube proudly claims on Twitter that “YouTube is a platform for free expression of all sorts.”


The purpose of the Seigenthaler Debate is to "provide a collegial forum that fosters debate, dialogue, and study of First Amendment issues from all sides." As I have often said, the free speech values at the heart of the Founders’ First Amendment are central to our country’s Constitutional Culture, and the health of our democracy. These values should be nourished in the private sphere by individuals, businesses, institutions – including, not the least of which, educational institutions. Whatever other laws or public policy actions, if any, might be deemed proper to remedy the Cancel Culture's adverse effects, nurturing a robust Constitutional Culture that supports the free exchange of ideas is a crucial antidote.


That's the job of all of us. With that in mind, I do hope you will join me for the debate, "Resolved: “Internet Platforms are Common Carriers,” on February 16 at 7:00 p.m. Pertinent information with the registration link is here.

Friday, February 11, 2022

Study Indicates Broadband Internet Service Prices Have Fallen the Last Five Years

A study released on February 7 by BroadbandNow found across-the-board decreases in prices for broadband Internet service offerings over a five year period ending in the fourth quarter of 2021. The publication is called "Broadband Pricing Changes: 2016 to 2022." Among the BroadbandNow's findings, the average monthly price for broadband offerings with speeds in the range of 25Mbps to 99 Mbps fell by $8.80 or 14% over that span of time. And the average monthly price for 500+ Mbps offerings decreased by $59.22 or 42%. BroadbandNow's study provides evidence that effectively rebuts claims by proponents of rate regulation that prices for broadband have been increasing and made broadband supposedly unaffordable. 

For more on the topic of broadband pricing and affordability, see Free State Foundation Fellow Andrew Long's August 2021 Perspectives from FSF Scholars, "Evidence of Falling Broadband Prices Grows Despite Overall Spike in Inflation." Mr. Long's Perspectives analyzes sources that indicate that prices for broadband Internet service offerings decreased between 2020 and 2021, while putting those figures in the context of the strong capital investment in broadband networks that is benefiting U.S. consumers. Also check out his August 2021 blog post, "New BroadbandNow Report Further Demonstrates Affordability of Broadband."

Tuesday, February 08, 2022

Federalist Society Podcast Panelists Tackles NFIB v. OSHA and Non-Delegation

The Federalist Society-hosted "Regulatory Transparency Project's Fourth Branch Podcast" features an episode from January 20 on "The Vaccine Mandate Cases and the Future of Administrative Law." The podcast episode featured a panel discussion about the U.S. Supreme Court's decisions released January 13 in NFIB v. OSHA and Biden v. Missouri. The panelists addressed the Court's reasoning in those cases regarding statutory authority and legal doctrines such as non-delegation, major questions, and constitutional avoidance.

One of the panelists for the podcast episode was Law Professor Ilan Wurman, a member of the Free State Foundation's Board of Academic Advisors. Prof. Wurman's 2021 article in the Yale Law Journal on "Non-Delegation at the Founding" was cited by Justice Neil Gorsuch's concurring opinion in NFIB v. OSHA. During the panel discussion, Prof. Wurman offered sharp insights into the differences between non-delegation, major questions, and constitutional avoidance. Listeners will benefit from the contributions of all of the episode's participants regarding the import of NFIB v. OSHA for the future of the administrative state. 

For additional insights on these topics, check out Free State Foundation President Randolph May's Perspectives from FSF Scholars titled "NFIB v. OSHA: Nondelegation, Major Questions, and Chevron's No Show." 

Monday, February 07, 2022

Waiting for Updated FCC Broadband Maps

Tens of billions in government subsidies await updated FCC broadband service availability maps that indicate with accuracy and precision those locations that currently lack access to a high-speed Internet connection.

The question is, when will those maps be completed?

At a Senate Appropriations Committee hearing last week, Department of Commerce Secretary Gina Raimondo testified that the FCC will release those maps this summer – "probably."

Not so fast, an FCC spokesperson later clarified, describing the project as "complicated" and noting that "there is a protest pending before the Government Accountability Office" that has delayed progress, at least temporarily.

The Broadband Deployment Accuracy and Technological Availability (DATA) Act, passed by Congress in March 2020, directs the FCC to produce revised broadband maps – and to rely upon those maps "when making any new award of funding with respect to the deployment of broadband internet access service intended for use by residential and mobile customers."

Consequently, two substantial FCC subsidy programs are on hold until those maps are finalized: (1) Phase II of the Rural Digital Opportunity Fund (RDOF), which will disburse as much as $11.2 billion on top of the $9.2 billion already awarded in Phase I, and (2) the $9 billion 5G for Rural America Fund.

In addition, and as Free State Foundation President Randolph J. May and I emphasized in comments we submitted last Friday to NTIA regarding implementation of the $42.45 billion Broadband Equity, Access, and Deployment (BEAD) Program, the Infrastructure Investment and Jobs Act requires NTIA and the states to rely exclusively on those maps in determining which areas are "unserved" – and, secondarily, "underserved" – and therefore eligible for grants.

Accordingly, the FCC is under intense pressure to complete the Digital Opportunity Data Collection (DODC) – now referred to as the "Broadband Data Collection" – that Mr. May and I summarized in a November 2020 Perspectives from FSF Scholars.

In a March 2021 blog post, then-Acting Chairwoman Jessica Rosenworcel provided an overview of actions the agency had taken to do just that, one of which was "to issue a Request for Information to jump start the contracting process for the creation of the Broadband Serviceable Location Fabric, a common dataset of all locations in the United States where fixed broadband internet access service can be installed."

On November 9, 2021, the FCC awarded that $44.9 million contract to CostQuest Associates. However, a losing bidder, LightBox Parent, LP, filed a bid protest with the Government Accountability Office (GAO) on November 19, 2021. By law, the GAO has up to 100 days – that is, until February 28, 2022 – to issue a decision. Until it does, progress on the Broadband Serviceable Location Fabric has been paused.

In a December 8, 2021, letter to Representative Victoria Spartz (R – IN), Commissioner Rosenworcel described this temporary impasse, stated that "[t]he FCC is committed to implementing its new Broadband Data Collection process as fast as possible," and described the ways in which it "has made significant progress."

However, Chairwoman Rosenworcel did not provide a date certain for when the maps would be completed.

Friday, February 04, 2022

T-Mobile's Fixed Wireless Growth Boosts Broadband Competition

Last week, I blogged about Verizon's strong quarterly performance adding fixed wireless subscribers, and this week T-Mobile is joining the party. Fierce Telecom's Diana Goovaerts reports that T-Mobile added 224,000 fixed wireless subscribers in Q4 2021. That's even more additions than Verizon posted, and it brings T-Mobile's total fixed wireless subscribes to 646,000, exceeding its year-end goal of 500,000.

T-Mobile's C-Suite office noted that the largest portion of its fixed wireless additions are former cable and fiber customers, showing that, so far, fixed wireless is best poised to compete in areas already served by at least one provider. This could change as fixed wireless providers get access to more mid-band spectrum like C-Band, 3.45-3.55 GHz, 2.5 GHz, or other mid-band frequencies auctioned in the future. These bands have the propagation characteristics required for better service quality in presently unserved rural areas.

In any event, more fixed wireless offerings will still add competition in broadband markets. T-Mobile's C-Suite also claimed that price appears to be its main competitive advantage. Fixed wireless services, so far, offer service quality that is inferior but comparable enough to cable and fiber for a handful of price-sensitive customers to switch.

Market-based competition on price is always welcome.

Thursday, February 03, 2022

Report Estimates Annual Economic Value of Devices Using Unlicensed Spectrum

On February 1, the Consumer Technology Association (CTA) released a report titled "Unlicensed Spectrum and the U.S. Economy." This interesting report focuses on the economic value of sales of devices using unlicensed spectrum. According to CTA's estimate, the incremental sales value (ISV) of unlicensed devices at retail is $95.8 billion per year, or $79.8 billion at wholesale.

CTA defines ISV as the value attributable to the unlicensed spectrum access capability of devices. For some devices, CTA assigns 100% of their value to those devices' unlicensed spectrum capability. But for other devices, CTA assigns only a portion of their value the unlicensed aspect. For instance, CTA attributes 30% of the value of smartphones to unlicensed spectrum capability, so it determined that the $63 billion in revenues generated by smartphone sales in the U.S. in 2020 amounted to almost $19 billion for smartphone ISV for that year. In its report, CTA identified the top six categories of devices generating significant revenues on account of unlicensed spectrum capability as smartphones, laptops, wireless earbuds, smart TVs, and tablets. 

CTA's report acknowledges that the indirect benefits of unlicensed spectrum to the U.S. economy are much greater still. Yet the report helpfully brings into focus the variety of devices that utilize unlicensed spectrum. 

Free State Foundation scholars have emphasized the importance of making spectrum available for commercial and other personal uses on both unlicensed and licensed terms. For a recent publication on spectrum policy see the December 2021 Perspectives from FSF Scholars by President Randolph May and I titled "Constitutional Considerations for Proper Spectrum Policy: A Preference for Private Property Rights and Market Competition."

Tuesday, February 01, 2022

GOP Senators Criticize Treasury for Promoting Broadband Overbuilds

On January 28, 2022, eleven Republican Senators wrote to Department of the Treasury Secretary Janet L. Yellen to voice their "deep concern" that Treasury's Final Rule for a $350 billion government subsidy program encourages the use of taxpayer dollars to construct broadband networks in locations where robust service already exists – a concern that Free State Foundation President Randolph J. May and I similarly raised in a recent Perspectives from FSF Scholars.

In "Self-Defeating Treasury Subsidy Rule Wrongly Champions Broadband Overbuilds," Mr. May and I noted with alarm how the Final Rule adopted by Treasury for the State and Local Fiscal Recovery Funds (SLFRF) program rejects the sound policy that subsidies ought to target those areas that lack adequate levels of service – defined by Congress in the Infrastructure Investment and Jobs Act as 25 megabits per second (Mbps) downstream and 3 Mbps upstream – and instead declares eligible any "location where the recipient has identified need for additional broadband investment."

We also pointed out that the Final Rule encourages applicants to rely upon "any available data" – not just the revised broadband service availability maps that Congress directed (1) the FCC to generate, and (2) NTIA and the states to rely upon exclusively in disbursing over $42 billion in grants via the Broadband Equity, Access, and Deployment (BEAD) Program.

As we concluded, "[i]n championing government-subsidized overbuilds of existing, privately financed broadband networks, the Final Rule discourages continued private investment, interferes with the efficient operation of the competitive marketplace, ignores congressional intent, and undermines achievement of the very goal it seeks to advance: universal broadband access."

The letter to Secretary Yellen makes a number of similar points.

Led by Senator Moran (KS), the eleven GOP Senators wrote that the Final Rule "will allow SLFRF recipients to fund projects in areas where broadband service is already or will be available – while continuing to leave truly unserved areas in our states without access to broadband" and "allows states to choose whatever information they wish to determine the availability of broadband in a given area."

Instead, the Senators urged Secretary Yellen "to ensure that SLFRF funds are focused on truly unserved areas to maximize the benefit to those Americans currently without broadband service."