The Gentle Art of Disagreeing

In my ongoing series of essays, "Thinking Clearly About Speaking Freely," now numbering nineteen, I've talked a lot about the need to recreate a Constitutional Culture as a way of combatting today's Cancel Culture.  For example, in the very last essay, I ended by declaring, "more than ever, Americans need to rekindle an appreciation of our Constitutional Culture, of which free speech has always been an integral part."

In that vein, I commend to you a wonderful essay - "The Gentle Art of Disagreeing " - published today in RealClear Politics.

In it, Richard Porter, a Republican and Christian, relates his long-standing friendship with Stephen, a Democrat and Jew. They both had Ivy League backgrounds and both were lawyers. But their politics and philosophical perspectives could not have been more different. Stephen passed away last month, and Mr. Porter doesn't reveal his last name.

As Mr. Porter says, they frequently debated vigorously, and then, proverbially, would just "agreed to disagree."

The essay is touching and instructive. What most interested me is the way that Mr. Porter casts his friendship with Stephen, and their ability to disagree agreeably, in the light of our nation's Constitutional Culture about which I have been writing.

Here are a few brief excerpts:

I embraced my admiration of him, instead of dwelling on our differences. We treated each other as we would each wish to be treated ourselves. We treated each other with the same brotherly love upon which the nation we love was founded.

Jefferson wrote the Declaration of Independence in the city of brotherly love: Philadelphia. Philos, the root of Philadelphia, is one of several Greek words for love. And Jefferson slyly built love into the Declaration.

"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness."

And then, this in closing:

And loving our neighbor is the premise upon which our Creator endowed us with unalienable rights, including liberty – because loving others as ourselves governs and empowers the exercise of liberty.

Our nation was the first and is still the only nation founded on the premise of the equalizing power of brotherly love. Brotherly love informs the structure of our Republic and is amplified in the Bill of Rights –  such as the First Amendment rights to free speech and religion.

As hard as it may be in the face of deeply-held divisions and disagreements about politics and philosophical perspectives, "The Gentle Art of Disagreeing" is certainly worth reading. And thinking about. Now more than ever.

  

 

Subcommittee Looks at Legislation Promoting Broadband Infrastructure Buildout

On April 19, the U.S. House Communications & Technology Subcommittee held a hearing titled "Breaking Barriers: Streamlining Permitting To Expedite Broadband Deployment." On the legislative agenda for the hearing was some 30 Republican discussion draft bills and two Democratic bills. The subcommittee's attention to the importance of policies that promote the construction and upgrade of broadband infrastructure – and that eliminate unreasonable barriers to building new facilities and upgrading existing ones – is welcome.

No doubt there are geographic, population, and other economic conditions that play into timely broadband deployment. But careful attention to permitting and other regulatory policies regarding wireline and wireless broadband infrastructure buildout should be a component of a pro-market, pro-innovation, pro-investment federal policy for encouraging broadband access for all Americans.

Information about those legislative measures is contained in the hearing memo that available on the subcommittee's webpage. The high number of draft bills and bills precludes specific discussions particular each one, but several such bills previously have been introduced in Congress, at least in substantially similar form. The legislation under review at the hearing included streamlining the approval process for deploying infrastructure on federal lands, imposing shot clocks for decisionmaking on infrastructure permit applications by local permitting authorities, and legislative codification of specific infrastructure citing reforms adopted by FCC. 

 

Hopefully, the House Communications & Technology Subcommittee's hearing will be the prelude to a near-future advancement of legislation that will boost enable more timely deployment and reduce unnecessary harmful obstacles to next-gen broadband buildout. 

 

The Chairman of the House Communications & Technology Subcommittee is Rep. Bob Latta, who delivered a keynote address at the Free State Foundation's Fifteenth Annual Policy Conference – #FSFConf15 – held on March 28. Video of his keynote is available online. 

 

For publications by Free State Foundation scholars on infrastructure siting reforms, see the June 2022 Perspectives from FSF Scholars, "The FCC Should Preserve and Expand Its Broadband Infrastructure Reforms" by former FSF colleague Andrew K. Magloughlin and I. Also still very relevant today is the July 2021 Perspectives from FSF Scholars, "Real Infrastructure Opportunity for Congress: Speed Deployments of 5G Network," co-authored by FSF President Randolph May and I. Additionally, in a June 2021 Perspectives from FSF Scholars, FSF President May and I address fundamental legal issues connected to this topic in "Wireless Infrastructure Reforms Rest on Solid Constitutional Foundations: Congress Should Preempt Local Obstacles to 5G Deployment."

Senators Thune, Luján Urge GAO to Revisit Broadband Funding

In a letter dated April 24, Senators John Thune (R – SD), ranking member of the Commerce Committee's Subcommittee on Communications, Media, and Broadband, and Ben Ray Luján (D – NM), subcommittee chairman, request that the Government Accountability Office (GAO) "conduct an additional review of federal, state, and local broadband efforts to determine the effectiveness of each program."

In a recent post to the FSF Blog describing an effort led by Senator Thune to compel the National Telecommunications and Information Administration (NTIA) to align with statutory intent its rules for the $42.45 billion Broadband Equity, Access, and Deployment (BEAD) Program, I pointed out that in prerecorded remarks delivered to the Free State Foundation's Fifteenth Annual Policy Conference, he cited a May 2022 GAO report cautioning that "there are more than 130 federal broadband programs that are administered by 15 federal agencies."

As I noted in a June 2022 post to the FSF Blog, the GAO concluded that "[t]his patchwork of programs could lead to wasteful duplication of funding and effort" and therefore recommended that the "Executive Office of the President … should develop and implement a national broadband strategy with clear roles, goals, objectives, and performance measures."

To date, no such national broadband strategy has emerged. Fortunately, however, Senator Thune's ongoing broadband funding oversight activities maintain a bright spotlight on this multi-agency, multi-program recipe for duplication, waste, fraud, and abuse.

For instance, his December 2022 oversight letter, to which FSF President Randolph J. May helpfully provided a comprehensive response, brought focused attention to the GAO report's findings. Yesterday's letter to the Honorable Gene L. Dodaro, Comptroller General of the United States, treads a similar path.

Specifically, Senators Thune and Luján request that the GAO investigate a number of topics, including:

• Whether each of the 133 (and counting) federal subsidy programs "were … established in line with Congress' directive on the funding's intended purpose";
• The "statutory basis" for each program;
• The extent to which these programs have met their "specific policy goals";
• The frequency with which – and how – "federal programs' funding [has] overlapped other federal programs";
• The effect of "the fragmented and overlapping approach the federal government [has] taken" on the ability of these programs to accomplish their intended goals;
• Whether the goals set forth in the May 2022 Memorandum of Understanding between the FCC, Department of Agriculture, NTIA, and Treasury Department have been achieved; and
• The extent to which "federal agencies [have] coordinated their broadband programs with state and local broadband funding programs."

As the letter rightly concludes, "[a]ddressing weaknesses in each of these broadband programs will help ensure more Americans are connected to reliable broadband services."

FCC Chairwoman Jessica Rosenworcel at NSF's 6G Event

Speaking at the National Science Foundation's event titled "6G: Open and Resilient" on April 21, FCC Chairwoman Jessica Rosenworcel said this:   

“For three decades the FCC has had the authority to auction off airwaves to commercial actors to use to deploy, create, and innovate. But on March 9 of this year, that authority expired for the first time Consider it another small, barely recorded moment in history. But if it is not corrected, it could have big impact.”

Big impact, indeed!

Chairman Rosenworcel did an excellent job explaining why "we cannot afford to wait." And her recital of some of the FCC's current spectrum policy efforts that are laying the groundwork for future 6G networks - yes, that's 6G - is worthwhile! The underlying theme is that considerable advance planning and preparation is necessary in order to take advantage of the opportunity for maximizing efficient utilization of spectrum.

I commend Ms. Rosenworcel's remarks to you. 

Also, in an April 18 letter to congressional leadership of the pertinent House and Senate committees, Chairman Rosenworcel and all her fellow commissioners urged Congress promptly to renew the FCC spectrum auction authority "so that we can once again use this authority in service of consumers, businesses, and national security."

It should have been done yesterday.

FSF Submits Reply Comments in the FCC's Digital Discrimination Proceeding

The Free State Foundation submitted reply comments today in the FCC’s important Digital Discrimination proceeding. The complete reply comments, with all footnotes, is available at FSF's website:

These reply comments are submitted in response to the Commission's proposed rulemaking to address digital discrimination of access to broadband Internet access service. In these reply comments, we again urge the Commission to adopt an intent-based definition of digital discrimination because it is consistent with the text of Section 60506 of the Infrastructure Investment and Jobs Act. These reply comments emphasize that the record in this proceeding does not support the claims made in some comments that there is systemic digital discrimination in America. Also, in the context of responding to other parties, these reply comments identify requirements that should be satisfied before the Commission can impose liability on broadband Internet service providers (ISPs), as well as identifying limits on the scope of the Commission's rules and their enforcement.

 

Claims made in certain comments that there is clear evidence of pervasive digital discrimination rely on largely the same handful of studies that have significant limitations and defects, including reliance on outdated deployment data and a myopic focus on a particular ISP's footprint within a geographic area while ignoring that residents in the footprint are served by a competing provider offering comparable service. Moreover, purported low adoption rates do not constitute evidence of digital discrimination as consumers have many reasons for not adopting broadband – such as concerns about privacy, security, lack of a PC, and other personal considerations – that are outside the control of ISPs.

 

Instead of relying on faulty and outdated studies claimed to prove that digital discrimination of access is pervasive, current data based on accurate maps should be required for the Commission's adjudication of any digital discrimination complaint. And no finding of liability should be made absent the availability of accurate current data regarding existing broadband deployments.

 

Additionally, it would be wrong to find an ISP liable for digital discrimination of access if residents of the area already have access to one or more other broadband providers offering comparable services, and the Commission's rules should not recognize liability in such circumstances. The underlying purpose of Section 60506 is to ensure equal access, not to try to find back door traps to mandate fiber overbuilds. New entrants into the broadband market face financial risks in going head-to-head with incumbents. Rules that ignore the presence of already available services and high adoption rates would unreasonably expand the basis for liability and make entry even more financially risky for providers seeking to expand into new geographic areas. This would have the perverse effect of curtailing deployment.

 

The Commission should recognize that an available service is comparable whenever it can reliably support online edge services and applications that have relatively wide use among consumers. The rules should embody the principle of technological neutrality. So long as alternative platforms can meet speed and latency benchmarks, they should be deemed to be comparable services.

 

Importantly, there is research evidence that the presence of a local government-owned broadband network deters network investment and deployment by private market providers, and there should be a "safe harbor" from liability when an ISP's non-deployment decision is based on a refusal to overbuild and compete against a government-owned network.

 

Notably, there are a variety of instances in which laws and regulations control the deployment decisions of ISPs. Aside from any direct strings attached to the expenditure of federal and state subsidies which have the effect of dictating deployment decisions beyond ISPs' control, state and localities will continue to exercise authority to approve, limit, or prohibit the construction of new facilities and upgrades to existing ones. Accordingly, ISPs should enjoy a "safe harbor" from any liability when their deployments are made pursuant to federal or state subsidy awards. And ISPs should receive safe harbor when actions by federal, state, or local governments regarding permit or other approval processes have prohibited, limited, or delayed infrastructure construction and upgrades.

 

Similarly, ISPs should receive safe harbor from liability when they can show they were denied access to utility poles or that pole owners delayed approval of attachments or pole upgrades necessary for new attachments. And ISPs should be permitted to proffer evidence showing the technological and/or economical infeasibility of deploying to a given area due to the high cost of attachments, particularly where attachments would be needed for high numbers of poles.

 

The Commission's authority under Section 60506 almost certainly will be limited by the major questions doctrine. As explained in West Virginia v. EPA (2023), the major questions doctrine holds that there are certain "extraordinary cases" involving decisions of such "political and economic significance" that a "clear congressional authorization" by Congress is required in order for the agency to exercise the powers that it claims. The broader the extent to which the Commission's rules seek to impose liability on ISPs and the more onerous the restrictions and obligations they impose – particularly if the agency adopts a disparate impact definition and imposes pervasive restrictions and obligations on ISPs' deployment practices that effectively constitute unfunded buildout mandates and price controls – the more likely it is that such rules would be deemed unlawful under the major questions doctrine.

(P.S. FSF's initial comments to the FCC in its Digital Discrimination proceeding were filed on February 21, 2023, and they are available online.)

Senator Thune Spearheads Call to Revise BEAD Program Rules

In a letter released earlier today, a group of eleven Republican Senators, led by John Thune (SD), ranking member of the Senate Commerce Committee's Subcommittee on Communications, Media, and Broadband, and including Senate Commerce Committee ranking member Senator Ted Cruz (TX), urged National Telecommunications and Information Administration (NTIA) head Alan Davidson to bring in line with congressional intent the $42.45 billion Broadband Equity, Access, and Deployment (BEAD) Program's rules.

Specifically, the letter pressed Assistant Secretary Davidson to remove several provisions from the May 2022 Notice of Funding Opportunity (NOFO) that "divert resources away from bringing broadband service to rural America and are inconsistent with NTIA's statutory authority in the Infrastructure Investment and Jobs Act (IIJA)."

The letter targets the following extraneous and counterproductive policy priorities not found within the IIJA yet championed by the NOFO:

• Labor requirements inappropriately designed "to achieve targeted social outcomes";
• A "misguided" bias in favor of government-owned networks;
• A fiber-focused failure to heed "Congress' technology neutral stance in the IIJA" with regard to other viable broadband distribution platforms;
• Affordability and other requirements inconsistent with specific language in the IIJA prohibiting NTIA from '"regulat[ing] the rates charged for broadband service";
• Climate change mandates "not envisioned by Congress" that raise costs; and
• "Buy American" mandates that threaten untimely delays absent "a consistent waiver process."

Senator Thune stepped up his broadband-funding oversight efforts late last year with the release of a letter soliciting input on a wide range of topics, including many of those listed above.

In "Senator Thune's New Broadband Oversight Initiative," a December 2022 post to the FSF Blog, Free State Foundation President Randolph May welcomed the arrival of Senator Thune's oversight letter and wrote that he "couldn't agree more on the need for congressional oversight of the various programs providing funds for broadband."

Mr. May submitted a thorough response, referencing dozens of related FSF scholarly papers, on January 6, 2023.

In prerecorded remarks addressing the FSF Fifteenth Annual Policy Conference on March 28, 2023, Senator Thune emphasized the importance of congressional oversight and highlighted the Free State Foundation's substantive contributions to those efforts:

On rural broadband oversight, as many of you know, Congress has allocated an unprecedented amount of money in federal broadband investments. And there are more than 130 federal broadband programs that are administered by 15 federal agencies. That spiderweb of bureaucracy is exactly why I began an effort last year to ensure there is stringent oversight of how these taxpayer funds are being spent. And I greatly appreciate the Free State Foundation taking the time to provide thoughtful responses to my oversight request.

The other signatories to the letter to NTIA Administrator Davidson are Senators Ted Cruz (TX), Marsha Blackburn (TN), Ted Budd (NC), Shelley Moore Capito (WV), Deb Fischer (NE), Eric Schmitt (MO), Dan Sullivan (AK), J.D. Vance (OH), Todd Young (IN), and Roger Wicker (MS). 

The Price Tag of Streaming Video Piracy Losses

This is from a new report on piracy losses issued by Park Associates. 

"The practice of illegally accessing subscription streaming video services, and accessing pirate platforms has a price tag. New data from Parks Associates finds that piracy of movies and TV shows across over-the-top video platforms will reach $113 billion by 2027. Dallas-based Parks disclosed the number at the ongoing NAB trade show in Las Vegas.

The international research firm’s latest forecast reveals piracy rates for U.S. streaming services are expected to rise from 22% in 2022 to 24.5% in 2027. In addition, the value of fraudulent advertising delivered online to media and entertainment consumers may exceed $700 million in 2027."

That's $113 billion -- not $113 million -- in projected losses by 2027.

Obviously, losses of this magnitude have effects, and they are not positive. But for the theft, the lost revenue could have been used by distributors to invest in more programming and/or higher quality programming. And it could have been used to reward the creators and producers of programming to provide incentives for the continued creation of programming.

Certainly, there needs to be better means of detecting theft of intellectual property and enforcing existing sanctions. And there also needs to be a greater effort at continuing education to explain why the Founders included the Copyright Clause in the Constitution -- that is, to protect and secure for creators of intellectual property the fruits of their labors.

 

Ookla Reports Rising Fixed and Mobile Broadband Speeds in Early 2023

On April 17, Ookla released its Market Report for the United States for the first quarter of 2023. According to Ookla, during the first quarter of the year, Charter Communications' Spectrum was ranked highest among fixed broadband services with download speeds of 234.8 Mbps. Comcast was a close second for fixed providers with speeds of 232.85 Mbps. For mobile providers, T-Mobile ranked first with download speeds of 165.22 Mbps, and Verizon Wireless was second at 74.5 Mbps. Oookla's Market Report provides additional breakdowns for both fixed and mobile services for consistency and latency and performance in supporting video services. The report also includes rankings for fixed broadband by region and for major cities as well as separate ranking among mobile providers for 5G performance and availability.

Coinciding with the release of its U.S. Market Report for Q1 2023, Ookla also released updated findings for March 2023. Ookla found that median upload/download speeds in the U.S. for last month were 197.84/23.02 Mbps for fixed broadband services, and 81.26/9.44 Mbps for mobile broadband services.

The Ookla report's speed findings for early 2023 are an indicator of continuing improvements in broadband service capabilities and network deployment in the United States. The report's findings also are a reflection of the federal light-touch regulatory framework for broadband Internet access services, which encourages private market investment and innovation. Future improvements in broadband access are best achievable by maintaining the pro-free market approach embodied in the FCC's 2017 Restoring Internet Freedom Order. Additionally, Congress and the Commission take further steps to build on the progress being made in this space. My January 2023 Perspectives from FSF Scholars, "The 2022 Communications Marketplace Report: Timely FCC Action Could Accelerate Next-Gen Broadband Deployment," identified three such steps: (1) prioritize the lower 3 GHz band and other spectrum bands for repurposing for commercial services; (2) adopt fee caps and "shot clocks" on deployments of wireline facilities in state and local rights-of-way; and (3) ensure equitable access to broadband by prohibiting intentional discrimination, and not by imposing disparate impact liability. 

FSF Calls for Fast Action on Mid-Band in National Spectrum Strategy

On April 17, the Free State Foundation filed public comments with the National Telecommunications and Information Administration (NTIA) in the agency's proceeding for the Development of a National Spectrum Strategy. As FSF's comments observe, there is a lack of available spectrum that is needed for delivering next-generation wireless services in the years ahead. To maintain of U.S. global leadership on 5G makes it imperative that the spectrum pipeline be replenished. The federal government is the primary occupier and user of a significant amount of spectrum, particularly in the mid-band. And while spectrum is needed for continued support of national security, law enforcement, and other governmental functions, much of the government-occupied is going underutilized. Hopefully, the NTIA's development and implementation of a National Spectrum Strategy will be swiftly developed and implemented to make more spectrum available for commercial services and help ensure that its value and use are maximized.

To this end, two policy imperatives are set forth in the initial paragraph of FSF's comments are set forth in the initial paragraph: 

The agency should adopt and implement its proposal to identify at least 1,500 MHz of spectrum for study – and, importantly, it should make determined efforts to reallocate at least 1,500 MHz of spectrum for more commercial use. And while the maintaining the availability of sufficient unlicensed spectrum should remain an important objective, the National Spectrum Strategy's short-term priority should be accomplishing the repurposing of more mid-band spectrum for exclusive licensed use, starting with the 3.1-3.45 GHz band. 

FSF's comments recommend that low-, mid-, and high-band spectrum be identified and reallocated for commercial wireless use. Additionally, FSF's comments recognize that dedicating spectrum for unlicensed use such as Wi-Fi also can yield considerable value and use. For more details, FSF's comments are available online. 

 

The NTIA's ongoing efforts to develop and implement a National Spectrum Strategy was a subject of a keynote address at #FSFConf15 on March 28 of this year by Scott Blake Harris, Senior Spectrum Advisor at the NTIA. Video of Mr. Blake's keynote is available online. 

A National Spectrum Strategy has been long awaited. Indeed, back in January 2019, FSF filed comments with the NTIA, under the prior administration, for the agency's earlier proceeding to develop a sustainable national spectrum strategy. That earlier proceeding never succeeded in accomplishing its task. Hopefully, the current administration and proceeding at the NTIA will continue apace and have an implementation plan ready by the summer of this year. We wish Mr. Harris and the agency success in promptly assembling and putting into action a National Spectrum Strategy that will boost spectrum use and efficiency and put the U.S. solidly out in front on 5G and, one day, 6G.

Stronger Copyrights Would Give Added Boost to Rising Music Market

On March 9, the Recording Industry Association of America (RIAA) released its "Year-End 2022 RIAA Revenue Statistics." RIAA's report highlights continuing annual increases in U.S. recorded music market revenues. Hopefully, recording artists also do well here in 2023. But Congress can promote the continued success and expansion of economic opportunities in the copyright-intensive music recording industry by passing the American Music Fairness Act – S.253 and H.R. 791.

RIAA's report found that retail revenues for the U.S. sound recording industry grew to $15.9 billion in 2022, up from $15 billion in 2022. Revenues from paid subscription music services increased 8% to 10.2 billion in 2022, accounting for 77% of streaming revenues and almost two-thirds of total revenues. Interestingly, in 2022, vinyl records outsold music CDs for the first time since 1987. For the sixteenth year in a row, revenues for vinyl record sales have increased. And in 2022, revenues from sales of vinyl grew 17%, constituting $1.2 billion of the $1.7 total for sales of physical copies that year. Also, $495 million in revenues were generated from sales of digital downloads, an annual figure that amounted to only 3% of annual U.S. recorded music revenues last year. Digital download revenues have declined several years in a row since 2012, when they constituted 43% of annual recorded music revenues. 

Bearing those overall positive findings in mind, there are steps that Congress can and should make to promote flourishing and opportunity in recorded music marketplace. One significant thing that Congress can do is pass the American Music Fairness Act, which was reintroduced in the 118th Congress as S.253 and H.R. 791. 

 

Existing copyright law exempts terrestrial AM/FM radio stations from paying royalties to owners of copyrighted sound recordings when their music is given radio airplay. Online subscription services and online ad-supported services that play copyrighted sound recordings pay royalties to the owners of those sound recordings. But no such payments are required by AM/FM stations that profit from broadcasting copyrighted sound recordings by drawing audiences and resulting ad revues. 

 

The American Music Fairness Act would rectify this unequal legal treatment and the unfairness to copyrighted owners who receive no compensation when third party terrestrial AM/FM stations commercially exploit their creative works. S.253 and H.R. 791 would require AM/FM stations to pay royalties to owners of sound recordings for the use of their intellectual property just like online streaming services do.  

 

An oft-overlooked downside to the current terrestrial AM/FM station exemption for paying public performance royalties to copyrighted sound recording owners is that the exemption effectively precludes the sound recording owners from receiving royalties from foreign stations that play their music over the air. So long as domestic terrestrial AM/FM radio stations have no obligation to pay royalties for broadcasting copyrighted sound recordings owned by American, foreign radio stations are similarly relieved from having to pay those royalties when they play copyrighted music owned by Americans. Passing of the American Music Fairness Act into law would therefore enable American copyright owners to tap royalty streams in foreign nations. Notably, the legislation takes a light-touch approach to smaller commercial and non-profit stations by treating them to a a low, flat royalty rate. 

 

My February 2022 Perspectives from FSF Scholars, "American Music Fairness Act Would Secure Copyrights in Sound Recordings," spotlighted the hearing that the legislation received a in the House Judiciary Committee during the 117th Congress. The 118th Congress is now primed to advance the American Music Fairness Act into law. 

FCC Proposes Policy Statement on Spectrum Use and Receiver Interference

At its April 20 public meeting, the FCC will be voting on a proposed Policy Statement for promoting efficient use of spectrum that lays out principles for considering transmitter and receiver efficiency for wireless systems. As the proposed Policy Statement recognizes, the Commission is faced with the challenge of ensuring harmonious co-existence among a growing number of varied services operating in increasingly crowded spectrum. Traditionally, the Commission has set rules regarding transmitters and their operations. But as the proposed Policy Statement observes: "the properties of receivers, and their immunity to out-of-band interference in particular, offer an increasingly promising pathway to manage spectrum needs in a balanced and comprehensive way."

The proposed Policy Statement sets out three general policies – and not enforceable rules or receiver design mandates – that will offer guidance on how the Commission intends to manage spectrum more efficiently in the future. Here is a thumbnail of those principles: 

First, the realities of interference, drawn from basic physics, should guide the reasonable expectations of receivers and transmitters on how best to operate in an increasingly noisy radiofrequency (RF) environment. Second, in light of these foundational realities, both receivers and transmitters share responsibility to take prophylactic action to reduce the likelihood and impact of harmful interference. Finally, robust quantatitve data—including information about transmitters and receivers—will be highly probative in how we analyze the RF environment and evaluate the merits of interference-related claims. 

Among other things, those generalized principles, if adopted by the Commission, would guide the agency's future spectrum management efforts to address claimed out-of-band harmful signal interference with receiver devices operating within a specific band and also provide some guidance to incumbent users of spectrum regarding when and how they can safely and confidently increase or expand usage of their licensed spectrum without the raising specter of government intervention. In all, the Commission's proposed Policy Statement on transmitter and receiver operations and efficient spectrum use appears to be carefully and measured approach to a complex issue. 

 

The subject of receiver performance immunity was discussed at last year's Free State Foundation Annual Policy Conference and highlighted in a June 2022 blog post, "#FSFConf14: FCC Commissioner Simington on Receiver Interference Policy."

Greater Video Competition Should Prompt Less Regulation, Not More

Dormant for nearly a decade, the FCC's misguided proposal to expand the definition of "Multichannel Video Programming Distributors" (MVPDs) – a category limited to facilities-based offerings such as cable, Direct Broadcast Satellite, and telco TV – recently has received renewed attention. In a letter dated March 24, 2023, responding to an inquiry from Senator Charles Grassley (R - IA), FCC Chairwoman Jessica Rosenworcel pointed to statutory definitions as the basis for not subjecting MVPDs that stream content over the public Internet – that is, "virtual MVPDs" (vMVPDs) such as YouTube TV, Hulu + Live TV, Sling TV, and DIRECTV STREAM – to legacy regulations.

This is the right outcome, of course. However, the justification put forth overlooks the forest for the trees. The dramatic rise of vMVPDs, as well as the multitude of other Online Video Distributors (OVDs) that make video content available to consumers – think Netflix, Amazon Prime Video, Hulu, Disney+, Apple TV+, HBO Max, Paramount+, and so on – has rendered the video programming marketplace robustly competitive. Consequently, the goal of the Commission in 2023 should be to identify opportunities to eliminate outdated rules that apply to traditional MVPDs, not extend them to the new entrants whose competitive influence obviates any justification for regulatory intervention.

I, as well as other Free State Foundation scholars, document regularly the rapid growth of streaming services at the expense of traditional MVPDs. Recent examples include "On Video, the FCC's Competition Report Falls Short," a January 2023 Perspectives from FSF Scholars, and "A Tale of Two Trends: Traditional Video Distributors Shrink While Streaming Video Grows," a Perspectives published in September 2022.

In the latter, I followed these changed circumstances to their logical conclusion, writing that:

[I]t is past time for the Commission and Congress to take all necessary steps to eliminate one-sided burdens that impede competition – such as set-top box regulations, program access and carriage requirements, and the network non-duplication and syndicated exclusivity rules [that apply solely to facilities-based MVPDs] – and instead rely on the efficient operation of marketplace forces to drive down prices and expand consumer choices.

Chairwoman Rosenworcel did acknowledge the current competitive reality in her letter to Senator Grassley, highlighting the fact that "the video marketplace has changed significantly with the introduction of streaming services." Nevertheless, and as was the case with the 2022 Communications Marketplace Report, she failed to articulate an appropriate deregulatory response.

While it is true that vMVPDs do not deliver video content within "a portion of the electromagnetic frequency spectrum which is used in a cable system" and therefore do not fall within the statutory definition of an "MVPD," it is equally true that, given the vast array of competitive options available to consumers, regulations premised upon that technical distinction have outlived whatever utility they once may have had and should be eliminated.

FCC Unveils Draft Order to Combat New Access Stimulation Schemes

On March 30, the FCC released a draft order for consideration at its April 20 public meeting that is intended to foreclose a new method for evading the Commission's rules and arbitraging the access charge regime.

As the draft order recounts, some local exchange carriers (LECs) in areas with high access charges partner with "free" conference call or chat line services that significantly increase the volume of terminating calls to the LECs and thereby dramatically boost the access charges that the LECs can bill to interexchange carriers (IXCs). Access charges are supposed to cover the LECs' costs of providing service. But access stimulation schemes unnecessarily raise the costs for IXCs – as well as their customers – and such schemes unjustly enrich the LECs and their call service partners.  

 

The tactics employed by arbitragers change over time, requiring periodic updates of the rules to curb access stimulation. According to the draft order, certain LECs have inserted Internet Enabled Protocol Service (IPES) Providers into the call pathway for these conference call and call services. Apparently, some LECs have converted traditional competitive LEC numbers into IPES numbers in order to claim that the Commission's 2019 order does not apply to them. The Commission's draft order would address this. If adopted by the Commission, the draft order would provide that "when traffic is delivered to an IPES Provider by a LEC or an Intermediate Access Provider and the terminating-to-originating traffic ratios of the IPES Provider meet or exceed the triggers in the existing Access Stimulation Rules, the IPES Provider will be deemed to be engaged in access stimulation."

 

The Commission's draft order appears a reasonable and necessary step to halt further gaming of the access charge regime. (For further background, see my July 2022 blog post.)