Independence Day 2023

Over the years, as I have contemplated writing my annual Independence Day message, I have found myself, many times, turning to Abraham Lincoln. This year, coming on the heels of the Supreme Court's decision regarding "affirmative action" in college admissions decisions in Students for Fair Admissions, this is especially so.

Born in 1809, Lincoln was a generation (or two, depending on how you count) removed from the Founding generation. But there is no doubt that, among all the post-Founding era presidents, Lincoln understood, and drew inspiration from, the true meaning of the self-evident "Truths" proclaimed in the Declaration of Independence – "that all Men are created equal, that they are endowed by their Creator with certain inalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness."

In my Independence Day 2017 message, I showed how, in his little known but eloquent address at Peoria in October 1854, Lincoln grounded his extended argument against slavery firmly in the philosophy and principles expounded in the Founders’ Declaration of 1776, not the Constitution of 1787. Invoking the Declaration's self-evident truths, Lincoln said this in 1854: "What I do say is, that no man is good enough to govern another man, without that other's consent. I say this is the leading principle---the sheet anchor of American republicanism."

Now, fast forward to February 22, 1861. On Lincoln's journey to Washington as president-elect to be inaugurated, he stopped in Philadelphia. And not just any place in Philadelphia, but at the Pennsylvania State House site where the Declaration of Independence had been signed. There Lincoln delivered some very brief remarks – in contrast to his Peoria Address which lasted over three hours. Indeed, at the site that subsequently became known as Independence Hall, Lincoln protested to the gathered crowd, "I did not expect to be called upon to say a word when I came here."

Unsurprisingly, what Lincoln did say that day was memorable. Most notably, and most pertinent as we prepare to celebrate Independence Day 2023, Lincoln declared: "I have never had a feeling politically that did not spring from the sentiments embodied in the Declaration of Independence."

Explaining what he meant by invoking the sentiments embodied in the Declaration, Lincoln declared: "It was not the mere matter of the separation of the Colonies from the motherland; but that sentiment in the Declaration of Independence which gave liberty, not alone to the people of this country, but, I hope, to the world, for all future time. It was that which gave promise that in due time the weight would be lifted from the shoulders of all men."

The citizenry of our country is riddled with deep divisions, some involving matters of high principle and others not so much so. And, of course, our politics reflect these divisions, as it always has in our democracy, and on matters of principle that is appropriate. But I can't help believing that perhaps our politicians could find more common ground if every day, or if only occasionally, they said to themselves: "I have never had a feeling politically that did not spring from the sentiments embodied in the Declaration of Independence."

Towards the end of his remarks in Philadelphia on that day in February 1861 at the site of the signing of the Declaration of Independence, Lincoln said that if the country could not be saved without giving up on the fundamental principle of equality of all men, "I would rather be assassinated on this spot than surrender it."

Lincoln was assassinated on April 15, 1865, little more than four years later – but not before the Declaration's sentiments, which so inspired him and of which he so often spoke, had been vindicated by the Union's victory in the bloody Civil War.

I respect the views of those who disagree with Chief Justice John Roberts' majority opinion in Students for Fair Admissions. But, for me, it was time for the Supreme Court to return to the foundational equality principle at the core of the Declaration of Independence and the Constitution's Fourteenth Amendment. As the Court emphasized, pursuant to the Equal Protection Clause: "Eliminating racial discrimination means eliminating all of it."

On this Independence Day, it's appropriate to reflect on the meaning of the Declaration's self-evident truths.

Best wishes to you and your family for a safe and meaningful Independence Day 2023!

 

My previous Independence Day messages are here: 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022.

 

Video and Audio Available for Webinar on FCC's Digital Discrimination Rulemaking

On June 23, the Federalist Society hosted a webinar titled "The FCC's Digital Discrimination Rulemaking: Facilitating Equal Access to Broadband Services." Video and audio of the event are now available for streaming and download:

Free State Foundation President Randolph May moderated the discussion amongst panel participants Harold Feld of Public Knowledge, Clint Odom of T-Mobile, and myself. The webinar included discussion of the FCC's authority under Section 60506 of the Infrastructure Investment and Jobs Act of 2021. Does Section 60506 confer authority on the agency to adopt rules that would impose liability on broadband providers based only on a showing of unintentional disparate impact? Or does the statute require evidence of intentional discrimination. And what effect might disparate impact liability have on efforts to ensure equal access to broadband Internet services? Check out the online video or listen to the podcast to hear thoughtful insights on these and related matters. 

 

In public comments and reply comments filed with the FCC in its digital discrimination rulemaking proceeding, FSF President Randy May and I concluded that Section 60506 of the Infrastructure Act contains an intent-based standard for rules prohibiting digital discrimination, and that the text of statute does not support the imposition of unintentional disparate impact liability on broadband Internet service providers. During the webinar event, I emphasized that Section 60506 contains specific language that calls for an intent-based anti-discrimination rules and that the statute does not contain hallmark catchall terms that courts have identified as authorizing or permitting unintentional disparate impact claims. For discussion about that issue more, check out the webinar.

Ericsson Reports on Present and Future Growth of Mobile Services

The June 2023 edition of the "Ericsson Mobility Report" was released on June 23. The updated report features high-level view of global and regional developments and trends in mobile data services as well as projected growth forecasts. Although the June 2023 report does not include any figures specific to the United States, it does contain many useful insights regarding mobile data traffic increases, progress in 5G deployment, and potential growth in fixed wireless access (FWA) for the globe and for North America.

Among the report's findings, "[t]he uptake of 5G subscriptions in North America has been stronger than expected," and year's-end 2022 it had the highest 5G subscription penetration at 41%. Included in the report is a chart showing the disappearance of legacy 3G services in North America and strong growth in 4G LTE as well as 5G. Yet although 4G subscriptions increased in 2022, the report expects those numbers to decline starting this year. According to the report's projection, in 2028, North America will have the highest 5G penetration at 91%.

The report credits the use of mid-band spectrum in North American for strong 5G services growth, and it expects there to be over 250 million subscriptions by the end of this year. And the report projects there to be about 410 million 5G subscriptions by 2028. Important to this 5G growth is FWA services. The report observes that "FWA, providing high-speed internet to homes and small businesses, has become the primary technology fueling fixed broadband growth in North America." 

 

Moreover, the report projects that average monthly mobile data usage per smartphone in North American will rise to 58 GB in 2029, and it credits this to unlimited data plans and improved 5G network capacity supporting new mobile and FWA 5G subscribers. 

 

Notably, the report also found that monthly global mobile data traffic reached 126 exabytes (EB) by the first quarter of this year – nearly double what it was just two years prior.  

 

But in order to fully support projected future increases in mobile data traffic in the U.S. – as well as support potential stronger-than-expected growth in 5G services – more spectrum will need to be made available for private commercial use. Now that the U.S. spectrum pipeline for commercial wireless services has run empty and the FCC's authority for conducting competitive bidding spectrum license auctions has lapsed, the clear policy priority should be to replenish the pipeline with more mid-band spectrum from commercial licensing and to renew the Commission's authority conduct auctions and license spectrum use on an exclusive basis. 

Report Shows Growth in Satellite Broadband

On June 20, the Satellite Industry Association (SIA) announced the release of its 26th Annual State of the Satellite Industry Report. A report executive summary or set of satellite industry highlights for the year 2022 is available online.  

According to SIA's announcement, a total of 2,325 commercial satellites were deployed in 2022, a 35% increase compared to the year before. And at year's end 2022, there were 7,316 active satellites orbiting the earth. Additionally, SIA announced that global satellite broadband subscriptions and revenue combined with satellite radio and remote sensing revenue growth totaled $113.3 billion. 

Notably, a June 23 Via Satellite article stated that "the report found that consumer broadband satellite service revenue grew 18% in 2022 to $2.4 billion, while subscribers grew 28%, to nearly 4 million. The majority of revenue comes from Geostationary Orbit (GEO) broadband, but subscriber growth is largely driven by Low-Earth Orbit (LEO) systems. And the article also observed report findings of growth in satellite mobile voice and data revues of 7%. 

 

SIA's report constitutes a reminder of the potential for next-generation satellite technologies to provide viable new choices for high-speed broadband competition and connectivity in difficult-to-reach geographic areas. That potential was discussed by former FSF Legal Fellow Andrew Magloughlin and I in our January 2022 Perspectives from FSF Scholars, "The Broadband Internet Services Market in January 2022:
5G, Cable, Fixed Wireless, Wi-Fi 6, and Fiber Are Benefitting Consumers."

GOP Senators to Biden: Use COVID-19 Dollars to Extend ACP

According to Light Reading and other news outlets, on Tuesday a group of 8 Republican Senators identified for President Biden a stopgap funding source for the Affordable Connectivity Program (ACP): untapped COVID-19 relief money.

The ACP, which provides eligible households with a $30 monthly subsidy ($75 on Tribal lands) to apply toward their choice of broadband service and up to $100 for a connected device, was created by the Infrastructure Investment and Jobs Act of 2021 (IIJA). Congress filled the ACP's coffers with $14.2 billion on a one-time basis.

Without question, $14.2 billion is a hefty sum. However, given that (1) to date nearly 19 million households have signed up for the ACP, and (2) the FCC continues to encourage consumer participation through outreach grants, that money soon will run out – perhaps as early as the first quarter of 2024.

Accordingly, many have called upon Congress to appropriate additional funds to extend the ACP's lifespan. That group includes Free State Foundation President Randolph May, who urged Congress to "extend it, while mending it" in a Real Clear Markets op-ed published in April of this year.

And in a March 2023 Perspectives from FSF Scholars, Mr. May wrote that:

Congress should extend the worthwhile ACP program promptly by appropriating additional funding. At the same time, it can consider revising the program to better target the ACP benefit to those lower-income households most truly in need and adopting measures to minimize, to the extent possible, any waste, fraud, and abuse in the program.

Notably, the ACP has bipartisan support. In written testimony submitted prior to her participation in an oversight hearing held yesterday by the House Energy and Commerce Committee's Communications and Technology Subcommittee, FCC Chairwoman Jessica Rosenworcel wrote that "I strongly support funding the Affordable Connectivity Program into the future to help more families get and stay connected to the high- speed internet they need to participate in modern life."

Speaking during that hearing, Chairwoman Rosenworcel reportedly stated that:

As a result of the bipartisan infrastructure law, we've got lots of funds to help with the deployment in largely rural areas, but we're also going to need funds and efforts to address affordability. ACP is the best program we have ever developed to do that, and we've got to make sure it continues.

Earlier this week, Senator Roger Wicker (MS) and 7 of his Republican colleagues reportedly wrote to President Biden to share a novel short-term solution: "repurpose a portion of unobligated emergency COVID relief funds to ensure the continuity of funding for this program, while we explore alternative sustainable funding mechanisms and updated parameters."

Senator Wicker's coauthors include Mike Crapo (ID), Kevin Cramer (ND), Thom Tillis (NC), Shelley Moore Capito (WV), J.D. Vance (OH), James Risch (ID), and Todd Young (IN).

As did Chairwoman Rosenworcel in her House testimony, the letter's signatories emphasized the interdependent relationship between (1) the hundreds of billions in federal subsidy dollars, including the $42.45 Broadband Equity, Access, and Deployment (BEAD) Program, targeting broadband infrastructure expansion, and (2) the ability of lower-income Americans to pay for the service that that massive public investment makes possible.

Specifically, they pointed out that, as those subsidized networks "become operational, the significance of the Affordable Connectivity Program will become even more important as it ensures our constituents can benefit from these historic investments in connectivity."

In response, a White House spokesman stated that "[w]e look forward to working with members of both parties to extend funding for the program so that it can keep lowering high-speed internet costs for tens of millions of American families."

Register Now: The FCC's Digital Discrimination Rulemaking: Facilitating Equal Access to Broadband Services

On Friday, June 23 at Noon Eastern Standard Time, the Federalist Society will be hosting a webinar titled "The FCC's Digital Discrimination Rulemaking: Facilitating Equal Access to Broadband Services." Registration for the virtual event is now open.

The webinar will be moderated by Free State Foundation President Randolph May, and it will feature a panel that includes Dr. Harold Feld of Public Knowledge, Clint Odom of T-Mobile and Seth Cooper of the Free State Foundation. The Federalist Society's webpage for the event describes what will be in store for the webinar: 

The Infrastructure Investment and Jobs Act, signed into law on November 15, 2021, requires the Federal Communications Commission (FCC), within two years, to promulgate rules to facilitate equal access to broadband internet services and to prevent "digital discrimination of access based on income level, race, ethnicity, color, religion, or national origin." Significantly, the statute also requires that the rules take into account "issues of technical and economic feasibility." The FCC issued a notice of proposed rulemaking on December 22, 2022, and comments and reply comments have now been submitted.

 

Given the importance of widespread access to broadband services, the "Digital Discrimination" proceeding is one of the most important items on the FCC's agenda. The panelists, from a diversity of perspectives, will discuss key legal and policy issues presented in the rulemaking, including the following: Does the agency have authority to adopt rules that would impose liability on broadband providers based only on a showing of unintentional disparate impact or is evidence of intentional discrimination required? In considering liability, how should the agency take into account claims relating to the technical and economic feasibility of making available access? What impact will the rules have on investment and innovation under various scenarios? What type of process should the Commission employ in considering complaints of digital discrimination?

 

Please join the panel of experts for a lively discussion of these and other questions as the FCC prepares to adopt final rules in the digital discrimination proceeding.

Be sure to register for this timely event online.

Report on Fixed Wireless Access Competition Shows Need for More Mid-Band Spectrum

Today, Econ One released a report titled "Competitive Effects of Fixed Wireless Access on Wireline Broadband Technologies." There is an ongoing debate over the potential impact of fixed wireless access (services) on broadband competition. This interesting report, authored by Hal Singer and Augustus Urschel, provides a significant contribution to the debate.

The Econ One report estimates the competitive effects of FWA entry into broadband markets. The estimates are based on surveys of consumer responses to hypothetical scenarios in which FWA services are made available at different price levels and in local markets with differing choices among incumbent providers of cable modem and/or fiber broadband services. 

 

According to Econ One's report: "In all scenarios—including at current prices or alternative discounted prices, and in markets with only cable or those with a mix of cable and fiber offerings—the introduction of FWA packages yields price reductions and significant consumer welfare gains." That is, the report found that FWA market entry would prompt many subscribers to switch from incumbent services to competitively priced FWA services and also lead to price reductions for subscribers to cable broadband services. For the details, check out Econ One's report.

Notably, Econ One's report "assumes sufficient capacity to support all potential subscribers with high-speed FWA service." That assumption is key because mid-band spectrum is a necessary input for supporting FWA services for large numbers of subscribers. But as Free State Foundation scholars have pointed out in April 2023 public comments to the NTIA for its National Spectrum Strategy proceeding, in Perspectives from FSF Scholars papers, and in blog posts, there is a shortfall of mid-band spectrum available for commercial licensing on an exclusive basis. The Econ One report is on solid ground in concluding that "[t]he best and fastest way to increase home broadband competition, which will bring significant consumer savings, is getting more full-power, licensed, mid-band spectrum into the hands of FWA providers."

FSF scholars have supported prior FCC allocations of spectrum for use on an unlicensed basis, including the Commission's 5.9 GHz Order. Congress and federal agencies also ought to be open to pursuing new opportunities to dedicated other spectrum resources to unlicensed uses. But it is now imperative that Congress and federal agencies prioritize the repurposing of mid-band spectrum for exclusive licensed use. Congress needs to renew the FCC's authority to conduct competitive bidding auctions for spectrum licenses and get additional mid-band spectrum into use to support FWA.  

Report Compares Broadband Performance in Rural Areas

On June 11, Recon Analytics published an interesting report titled, "The Happiest and Unhappiest Broadband Customers in the United States." Recon received responses from broadband customers from rural counties across America regarding their satisfaction with broadband service performance. The report includes a list of the ten happiest broadband counties as well as the ten unhappiest broadband counties. In the report, author Dr. Roger Entner makes the commonsense observation that broadband provider performance matters more than technology platform, and that the performance level of individual providers can vary substantially in different geographic markets. For more, check out Recon Analytics' report.

Market competition certainly is important for encouraging performance quality by broadband Internet service providers in rural as well as urban areas. Broadband service providers that fail to deliver speeds at advertised benchmarks, that experience network outages and do not provide subscribers with sufficient connectivity, or that otherwise fail to provide value for the dollar deserve to lose subscribers to market rivals who can offer better performance. It's no secret that rural areas have lower population levels and density as well as geographic challenges to providing service. Consequently, rural areas have less competitors than urban areas. Near-term increases in availability and awareness of fixed wireless access (FWA) services may provide an additional spur to incumbent rural broadband providers to boost performance levels in areas where they are perceived to be lagging. 

GAO Reiterates Broadband Funding Coordination Concerns

On May 10, 2023, the Government Accountability Office (GAO) released "Broadband: A National Strategy Needed to Coordinate Fragmented, Overlapping Federal Programs," a Statement addressing the status of federal broadband subsidy efforts. It echoes the findings set forth in a May 2022 GAO Report that I summarized in a post to the FSF Blog – and that Senator John Thune (R-SD) underscored in prerecorded remarks delivered to the Free State Foundation's Fifteenth Annual Policy Conference on March 28, 2023.

Troublingly, it also indicates that little has changed over the past twelve months.

As Senator Thune noted, the May 2022 GAO Report concluded that "there are more than 130 federal broadband programs that are administered by 15 federal agencies" – a scenario he characterized as a "spiderweb of bureaucracy." The Statement, meanwhile, focuses on a subset of that total: the 25 programs whose "main purpose" is broadband, 13 of which "overlap because they can each be used for the purpose of broadband deployment," as illustrated in the chart reproduced below.

The Mosaic of 25 Federal Programs with Broadband as a Main Purpose,
as of November 2021, by Purpose Category

Continuing, the Report expressed concern that "[t]his patchwork of programs could lead to wasteful duplication of funding and effort." It therefore made the following recommendations:

• That the National Telecommunications and Information Administration (NTIA), in consultation with other relevant agencies, "present to Congress a report that identifies the key statutory provisions that limit the beneficial alignment of broadband programs and offers legislative proposals to address the limitations, as appropriate."
• That the "Executive Office of the President … develop and implement a national broadband strategy with clear roles, goals, objectives, and performance measures to support better management of fragmented, overlapping federal broadband programs and synchronize coordination efforts."

The publication of the Statement coincided with the appearance of Andrew Von Ah, GAO's Director, Physical Infrastructure, at a hearing held the same day by the House Energy and Commerce Committee's Oversight and Investigations Subcommittee entitled "Closing the Digital Divide: Overseeing Federal Funds for Broadband Deployment." (Indeed, it served as his official witness testimony.)

In terms of updates, the Statement reveals that little concrete progress on those recommendations has been made over the last year:

• NTIA's report to Congress remains in the planning stage – and is not expected until May 31, 2026.
• In May 2022, "the Executive Office of the President was considering if a national strategy was needed. As of this testimony, it has not developed a national strategy for broadband."

As I illustrated in "Wasteful Duplication by Design: A Case Study on Overlapping Federal Broadband Subsidies," a recent Perspectives from FSF Scholars, the status quo unacceptably – and seemingly intentionally – opens the door to redundant grants from multiple sources and the overbuilding of privately funded networks.

GAO once again has raised the alarm and proposed solutions. It is high time that the Biden Administration and Congress respond with meaningful coordinating measures.

Report Stresses Importance of Mid-Band Spectrum for 5G and U.S. Leadership

On June 7, the Center for Strategic & International Studies released a report titled "Spectrum Allocation for a Contest with China." Authored by James Andrew Lewis, the report emphasizes the need for allocation of more mid-band spectrum to support commercial 5G services. 

The report argues that American success in competition with China and global influence depends on the U.S. staying at the cutting edge of technology. This includes 5G wireless technologies; "[b]ut the United States lags far behind the rest of the world in allocations of the spectrum needed for 5G." The report states that federal government agencies have been allocated 60% of the mid-band spectrum compared to only 5% for licensed commercial users. Thus, "U.S. mid-band allocations diverge from the practices of other leading economies, including China, all of which have allocated much more mid-band spectrum to 5G uses."

Also, the report acknowledges that the expiration of the FCC's spectrum license auction authority in March of this year "deprives the United States of a valuable spectrum management tool and makes it more difficult to align spectrum use to make the country more competitive with China." And it rightly calls for the U.S. to find ways to allocate sufficient spectrum for 5G while supporting other national security objectives.

 

Free State Foundation Senior Fellow Andrew Long also wrote about these same important topics in his February 2023 Perspectives from FSF Scholars, "Extending FCC Spectrum Auction Authority Is Essential to the 5G Race."

Law Journal Article Endorses American Music Fairness Act

On May 17, the Journal of Legislation published an article titled "Oh Brother, Where Art Thou Royalties? Reflecting on the Emergence of Bluegrass and Appalachian Folk Music in Promoting the American Music Fairness Act." Written by Mark Edward Blankenship, Jr., the article discusses the 2000 movie named in the title as a window into the need for Congress to pass legislation securing full public performance rights in music sound recordings. Existing law exempts terrestrial AM/FM radio stations that broadcast copyrighted sound recordings over-the-air from having to pay royalties to the owners of those recordings. As the article points out, "[t]errestrial radio is the only medium allowed to use intellectual property without copyholders' permission or compensation, which is fundamentally unfair."

The article provides a straightforward legal history of public performance rights as well as their extension to performances of copyrighted sound recordings – except when it comes to terrestrial radio broadcasting. That historical backdrop sets the stage for the American Music Fairness Act (MMA), which has been introduced in the 118th Congress – S.253 and H.R. 791.  The article rightly concludes that "[a]dopting the AMFA would benefit many artists, honor intellectual property owners’ rights, and promote the progress in the arts." 

The AMFA also is the subject of my February 2022 Perspectives from FSF Scholars, "American Music Fairness Act Would Secure Copyrights in Sound Recordings." 

As an important conceptual sidenote, I disagree with the article's statement that "[u]nlike its foreign counterparts that employ a natural-rights view, the United States employs an economical view of copyright protection." In The Constitutional Foundations of Intellectual Property: A Natural Rights Perspective (Carolina Academic Press, 2015), Free State Foundation President Randolph May and I cited ample historical evidence that the Founding Fathers as well as jurists and legal scholars of the nineteenth century understood copyrights as natural property rights to the fruit of one's labors. Certainly, Congress takes economic considerations seriously in defining the boundaries of copyright protections. That is consonant with the Founders' political philosophy of natural rights, according to which copyright protections promote progress in the useful arts as well as financial opportunities for creators. 

However, it is true that U.S. copyright law is premised on a different set of principles than foreign countries. Although European regimes are characterized by some writers as being based on “natural rights,” the occasional use of the term in that context can be highly misleading. Different theories of natural rights exist, but when speaking about the American constitutional order, I think it best to speak of the natural rights principles reflected in the Declaration of Independence and held in common by the likes of the American Founders, James Kent, Daniel Webster, Abraham Lincoln, as well as other American statesmen and jurists. In chapter 6 of our book Modernizing Copyright Law for the Digital Age, Constitutional Foundations for Reform (Carolina Academic Press, 2020), FSF President Randolph May and I described European copyright regimes as being premised on a "moral rights" view. And in that book, we warn Congress against importing those foreign concepts into American law because they actually could undermine the protections for American copyright owners.

Montana Makes Nine: Another State Passes a Data Privacy Law

On May 19, 2023, Governor Greg Gianforte signed into law the Montana Consumer Data Privacy Act (MCDPA). With that, the number of states to adopt comprehensive data privacy statutes expanded to nine. And the regulatory headache that consumers and companies alike must endure grew by an equal measure.

In other ways similar to legislation passed in Virginia and Connecticut, the MCDPA forges its own unique path with regard to applicability. Perhaps as a reflection of Big Sky Country's relatively low population level, the MCDPA covers a wider range of businesses: those that possess the personal information of just 50,000 (rather than the more common 100,000) residents. Consequently, some smaller businesses that were exempt under other state statutes may now be on the hook for costly compliance programs.

The MCDPA establishes a familiar set of consumer rights: to know, to access, to correct, to delete, and to port collected personal data. In addition, consumers (1) can opt out of targeted advertising, data sales, and "profiling in furtherance of solely automated decisions that produce legal or similarly significant effects," and (2) must opt-in before a business can make use of "sensitive" personal data.

Businesses must abide by "privacy by design" principles, which include purpose-specific constraints on data usage and an obligation to adopt reasonable security measures. They also must conduct data protection assessments before engaging in a number of activities that "present[] a heightened risk of harm to a consumer." And starting in January 2025, they must recognize browser-based universal opt-out mechanisms.

Notably, the MCDPA will go into effect before laws recently adopted in Iowa (January 1, 2025) and Indiana (July 1, 2026): on October 1, 2024.

Meanwhile, it appears likely that Texas will be next: the Texas Data Privacy and Security Act has reached Governor Greg Abbott's desk.

On Regulatory Reform, Maryland Should Follow Virginia's Example

 In an op-ed published in January of this year, "Wes Moore Should Follow Glenn Youngkin's Regulatory Reform Model," I called attention to the important regulatory reform program initiated by Virginia Governor Glenn Youngkin. Here is part of what I wrote then:

"In June 2022, Virginia Governor Glenn Youngkin issued an Executive Order establishing a new Office of Regulatory Management – similar to the federal Office of Information and Regulatory Analysis (OIRA) that's part of the Office of Management and Budget. The executive order requires the new office, in coordination with the various state executive agencies, to "streamline the regulatory process and provide important institutional controls." And it establishes a concrete objective for the office: oversee a 25% reduction in regulatory requirements across state executive branch agencies."

As I explained, in December 2022, Virginia's Office of Regulatory Management released a Regulatory Economic Analysis Manual which I summarized this way:

"Written in clear, concise language free from economic jargon, the manual is a step-by-step guide for implementing an effective and efficient process for reviewing proposed and existing regulations. It explains how to perform the analyses required to ensure that the costs of new regulations, or ones already on the books, don't exceed their benefits. To achieve this, the manual describes the process for properly identifying the problem a regulation is intended to address and for identifying alternative approaches to addressing the problem that are the least intrusive and least costly, while still accomplishing their intended objective."

In my January 2023 op-ed, I urged newly inaugurated Governor Moore to look across the Potomac for good ideas regarding implementation of a regulatory reform program of his own.

Now, Reeve Bull, the Deputy Director of the Virginia Office of Regulatory Management, and an acknowledged expert on regulatory matters, has provided a useful update on the Virginia experience in an essay published in Penn Law's The Regulatory Review. In his piece, "A New Approach to Regulatory Budgeting in Virginia," Mr. Bull provides helpful information regarding the establishment of a "regulatory budget," one of the foremost regulatory reform tools. As he explains: "The idea is similar to a budget on government spending: agencies can regulate up to a certain amount, but, beyond that level, they need to get rid of old regulations in order to adopt new ones."

Easy to say, but the devil is in the implementation details, of course. So, Mr. Bull usefully discusses the nitty-gritty of several different regulatory budgeting approaches, including the one on which Virginia has chosen to focus: seeking to reduce the total number of regulatory restrictions by 25 percent by the end of the Youngkin Administration."

To be clear, we're not talking about willy-nilly deregulation for deregulation's sake. Mr. Bull emphasizes, and I agree, that the overriding goal is "to roll back regulatory burdens while still preserving necessary public protections." A proper balance can be achieved if the right reform tools are put in place.

In his inauguration remarks last January, Governor Moore acknowledged that, among the states, Maryland is "44^th in the nation in the cost of doing business." The existence of excessive regulatory burdens – regulations that are no longer needed because of changed conditions or in which the costs exceed the benefits – are a significant contributor to Maryland's poor "cost of doing business" ranking.

Improving Maryland's business climate, including by reducing unnecessary regulatory burdens, shouldn't be a partisan issue.

Thus far, Governor Moore has not devoted much attention to implementing a meaningful regulatory reform program in Maryland. For the sake of the state's economic health, he should. And, by way of example, he would be wise to look to Governor Youngkin's regulatory budgeting model and the other reform work undertaken by Virginia's Office of Regulatory Management. 

 

PRESS RELEASE: FSF Files Amicus Brief in FCC Forfeiture Case Raising Important Due Process and First Amendment Issues

On Thursday, May 31, the Free State Foundation filed the attached amicus brief in the Court of Appeals for the Eleventh Circuit asking the court to vacate a forfeiture in the amount of $518,283 imposed on Gray Television, Inc. for allegedly violating the FCC’s Local TV Ownership Rule. Because the FCC’s imposition of the forfeiture raises important due process and First Amendment issues, FSF filed an amicus brief in support of Gray’s appeal. Below is an excerpt from the brief’s Introduction:

"This case raises important due process and First Amendment issues that extend beyond the immediate impact that this Court’s ruling may have on Gray or on any one TV broadcaster. Agencies must articulate rules with legally fixed standards, and agencies must follow those rules to avoid arbitrary enforcement. No agency may sanction a regulated party based on a freewheeling interpretation of its own rules, articulated for the first time in an administrative proceeding. The FCC’s approach to dealing with Gray’s alleged offenses in this case calls to mind a game of government “gotcha,” full of surprises and lacking reasoned decision making.

Unless the Court vacates the FCC’s forfeiture order, this case could serve as a roadmap for agencies to flout due process and to abridge free speech through the arbitrary use of authority. If the FCC’s order stands, it likely will have negative consequences for other parties subject to the FCC’s expansive interpretation of its regulatory jurisdiction and for all regulated parties.

The FCC’s order violates Gray’s due process and First Amendment rights. As for due process, Gray lacked fair notice that the transaction violated the so-called “top-four prohibition” found in the local television ownership rule at 47 C.F.R. § 73.3555(b). The FCC does not even claim that Gray violated the plain terms of this regulation. Gray did not. Instead, the agency claims that Gray violated an interpretive note to the rule, which itself depends on a flawed reading of the FCC’s 2016 Second Report and Order (adopting Note 11). That is agency decision making run amok.

And this is only the beginning of the layers of convoluted and confusing administrative interpretations adopted by the FCC, upon which imposition of the forfeiture depended. If anything, to comport with due process requirements, the FCC’s newfound interpretation of its authority to penalize Gray—based on an amalgamation of the Rule (47 C.F.R. § 73.3555) + Note 11 + the Second Report and Order – should have been applied only prospectively, not retroactively.

As for the First Amendment, the forfeiture order plainly applies to Gray’s acquisition of a network program affiliation agreement, not the transfer of a broadcast license. The agency apparently recognized a limitation on its ability to regulate Gray’s transaction in these circumstances because the FCC purported to rely on “ancillary authority” found nowhere in the relevant statutory text. In doing so, the Commission effectively seeks to regulate broadcast content. But it cannot do that: both the Communications Act, 47 U.S.C. § 326, and the First Amendment prohibit the FCC from regulating broadcast content. This Court should vacate the agency’s forfeiture order for these reasons.

In fact, the media landscape has changed dramatically in the years since the FCC adopted its television ownership rules. Residents of Anchorage, Alaska, and almost all other consumers across the country, have access to a plethora of media outlets, including multiple sources of video news, information, and entertainment. It is arbitrary and capricious for the FCC to impose forfeiture in this case without accounting for the First Amendment. The FCC erred in broadly applying its ownership rules, whose constitutional rationale has been called into serious question and are now more dubious than ever, in a way that regulates broadcast content. This is especially so when the agency steadfastly refuses to complete on a timely basis the periodic reviews that Congress has mandated specifically to determine “whether any of such rules are necessary in the public interest as the result of competition.” 47 U.S.C. § 202(h).