What Goes Around Comes Around

A quarter century ago I published a column in Legal Times titled, "Any Volunteers?" The editors added this subtitle: "The FCC unfairly regulates 'by condition' when it extracts concessions from merging telecom companies."

 

In the column, I criticized what was then becoming an increasingly frequent practice of extracting so-called "voluntary" concessions from applicants seeking to obtain FCC approval for their pending transactions involving mergers, acquisitions, or the like. Because the FCC reviews proposed transactions – whether the applicants hold spectrum licenses or common carrier authorizations – under the amorphous "public interest" standard, FCC commissioners found it easy to justify the extraction of conditions that, at least in their minds, comported with the public interest.

 

As I detailed in the column in 2000, often the voluntary, usually "midnight" concessions did not involve matters unique to the applicants before the Commission. And the conditions imposed did not involve compliance with specific then-existing requirements of the Communications Act or of Commission rules. The justification for imposing them was that they somehow advanced the public interest. The Legal Times column contains many examples of extraneous conditions imposed to obtain transaction approvals during the Clinton FCC period.

 

Regarding what I called "regulation by condition," I said: "The bottom line is that this process unfairly singles out merger applicants for regulation that, if justified at all, should be applied on an industrywide basis." And I urged Congress to reform the FCC's transaction review process.

 

In the ensuing 25 years, on many occasions I have bemoaned the ongoing practice – used most often, but not exclusively, by Democrat-controlled commissions – to extract extraneous "voluntary" commitments from supplicants seeking approval of proposed transactions. Again, by extraneous I mean the imposition of conditions that are not transaction-specific or uniquely related to the applicants as opposed to a generic group of market participants.

 

In both 2011 and 2013, my testimony before the House Energy and Commerce Committee urged reform of the FCC's transaction review process to prohibit the agency from imposing any condition not narrowly tailored to remedy a unique transaction-specific harm.

 

As a matter of principle, my position regarding the FCC's handling of transaction reviews and the need for reform of the process has been consistent throughout.

 

Which brings me to the FCC's approval of Skydance's acquisition of Paramount CBS, including its broadcast television stations. In approving the transaction, the FCC's Republican majority imposed an anti-DEI condition and an ""unbiased journalism" condition based on commitments offered by Skydance. Here's the FCC's description of both conditions:

 

"Commitment to Unbiased Journalism. Skydance has made written commitments to ensuring that the new company’s array of news and entertainment programming will embody a diversity of viewpoints across the political and ideological spectrum and that CBS’s reporting will be fair,

unbiased, and fact-based. To promote transparency and increased accountability, Skydance commits, for a period of at least two years, to have in place an ombudsman who will report to the President of New Paramount and evaluate complaints of bias.

 

Ensures that Discriminatory DEI Policies End. Skydance, which has no DEI programs in place today, has committed that it will not establish any such initiatives at the new company and confirms that New Paramount will also be committed to equal opportunity employment and nondiscrimination. This will ensure that the combined business will enact policies and practices consistent with the law and the public interest."

 

At this point in our nation's history, I generally oppose government-imposed or government-cajoled DEI programs because, all too often, in practical effect and however couched, they turn into coercive mandates that lead to forms of invidious discrimination. In other words, in effect, they deny equal treatment to those individuals who happen to be outside of the groups favored by the DEI programs and who did not engage in perpetuating any form discrimination themselves. And, like many, I am disturbed by the demonstrable left-leaning political bias that still largely prevails in many of what we called "mainstream" media outlets. So, philosophically, I am disposed to be sympathetic to the concerns that give rise to the FCC's anti-DEI and "unbiased journalism" conditions.

 

Nevertheless, as a matter of principle, I dislike seeing the FCC's transaction review process continue to be used to impose "voluntary" concessions not uniquely related to the specific transaction – as it was in this instance. To be sure, the "public interest" standard may be sufficiently indeterminate for today's Republican Commission majority to justify imposition of the anti-DEI and anti-political bias conditions. Certainly, under the public interest rubric, Democrat commissioners, historically, have resorted to the extraction of "voluntary" concessions leading to imposition of concededly extraneous conditions much more frequently than have their Republican colleagues. If you're not familiar with these instances, you can start with my "Any Volunteers?" column and go from there.

 

So, I could say "what goes around, comes around." Or what's "good for the goose is good for the gander." Or some such. There's lots of truth in those old sayings, and there's part of me that wants to leave it at that. This is especially so because there's rarely, if ever, any acknowledgement by those now decrying the FCC's handling of the Skydance transaction that "their side" has abused the review process in the past.

 

But I prefer not to leave it at that. I prefer to take leave offering the same consistent message I have offered for a quarter-century: Congress should reform the FCC's transaction review process along the lines I've advocated. That reform starts by prohibiting the agency from imposing any condition not narrowly tailored to remedy a unique transaction-specific harm.

Anna Gomez Is Wrong About Defunding Public Broadcasting

By Randolph May 

Unsurprisingly, FCC Commissioner Anna Gomez was quick to condemn Congress's decision to defund "public" [read: government-funded] media. After the Senate acted, she issued a statement claiming the action "is a key step in a coordinated campaign to silence public media, and the latest attempt by this Administration to censor and control speech."

She calls the defunding a "one-sided attack on free speech." 

Commissioner Gomez's condemnation perhaps would be more worthy of consideration if she had given even a mere nod in the direction of acknowledging the pronounced left-leaning bias in public broadcasting's programming, especially that of NPR. You won't find any such acknowledgement in her statement, or I suspect in any of her other declamations.

It would take much more than a short blog post to catalogue all the instances evidencing NPR's leftist bias. But for a short primer, please see long-time (25+ years) NPR senior editor Uri Berliner's piece in the Free Press highlighting some key examples, such as NPR's steadfast refusal to cover the Hunter Biden laptop story and insistence that the Wuhan lab leak theory regarding COVID was nonsense. And, as Mr. Berliner says, NPR's reporting on the contentious issues of climate change, the war in Gaza, and gender identity treatments for adolescents "leaned on moralizing and emotional certitude more than rigorous factual analysis."

So, while Ms. Gomez talks about "silencing those who report the news accurately," absent some acknowledgement – even a teensy, weensy one – that there have been legitimate issues of bias in public broadcasting's programming that needed to be addressed, her entreaties ring hollow. And this is especially so because we're talking about taxpayer-funded broadcasters, not private media outlets.

Ms. Gomez characterizes the defunding of public broadcasting as a "one-sided attack on free speech" by the Trump administration. Putting aside whether her accusation regarding one-sidedness squares with reality, she should acknowledge this truth: There are important differences between "public" media and private media when it comes to how the government should respond to claims of political bias.

It is not an attack on free speech for Congress and the president to decide that taxpayers should not be required to fund speech claimed to be politically biased. On the other hand, there may be – as Commissioner Gomez has suggested many times – threats to free speech protected by the First Amendment if the government, whether the Trump administration or any other, threatens private media outlets with adverse consequences based on the content of their programming.

That is the ground on which Commissioner Gomez should stand.  

 

A Revisionist History of the BEAD Program Ignores Congressional Intent

Today's Policyband (subscription required) included a useful pointed critique of a July 9 Washington Monthly article suggesting a clandestine plot by Republican lawmakers to sabotage from within the $42.45 billion Broadband Equity, Access, and Deployment (BEAD) Program. But there is even more that can be said by way of rebuttal.

The extraneous, partisan policies layered on top of the Infrastructure Investment and Jobs Act (IIJA) by the Biden NTIA were not the issue, authors Paul Glastris and Kainoa Lowman insist. Instead, they make the unsupported claim that "the complexity and delays of the BEAD program and the broader failure of Washington over many years to solve the digital divide is overwhelmingly the result of telecom monopolies whose economic and political power previous administrations unleashed."

Likening NTIA's Notice of Funding Opportunity to an "everything bagel," the piece nevertheless goes to great lengths to assure us that requirements not found in the IIJA – promoting policies relating to labor standards, climate threats, net neutrality, third-party (so-called "open") access, and so on – "were not major time sinks." The real impediment, they suggest, was "incumbents' goal of avoiding competition to their existing infrastructure." The truth, meanwhile, is that lawmakers appropriately took reasonable steps to prevent the use of federal subsidies to overbuild privately financed networks to prevent waste and encourage additional private investment.

In the IIJA, Congress, exercising its authority under Article I of the Constitution's Spending Clause, reached a relatively rare bipartisan compromise. That compromise sought to learn from the mistakes of the past – mistakes that the authors describe at length – and once and for all connect those remaining locations not yet served by privately constructed broadband Internet infrastructure.

According to USTA | The Broadband Association, providers have invested nearly $2.2 trillion in broadband infrastructure since 1996 – including $94.7 billion just in 2023. Largely because of that capital spending, the FCC reported in May that "110 million homes and small businesses (95 percent) have access to a terrestrial fixed service with speeds of 100 Mbps download and 20 Mbps upload (100/20) or greater."

What the authors willfully choose to ignore is that the stated goal of the IIJA was to subsidize the prohibitively high price tag to connect primarily rural locations still "unserved" – not to use taxpayer dollars to compete with these existing, privately funded networks, which of course would disincentivize future investment.

Accordingly, Congress in the IIJA defined "unserved" as without access to speeds of at least 25/3 Mbps and "underserved" as lacking access to speeds of at least 100/20 Mbps; designated the FCC's then-under-development National Broadband Map as the definitive source of location-specific service availability information; established a challenge process to verify that information; and enlisted state-level offices to determine how best to overcome the unique geographic, financial, and other factors encountered within their borders.

To be sure, in practice BEAD Program implementation has left much to be desired. To suggest, however, that measures agreed to by Congress to avoid the wasteful overbuilding of existing broadband infrastructure using taxpayer dollars somehow tell a "story … of how telecom monopolies are behind the failure of government to solve the digital divide" ignores both the substantial role played by Biden NTIA overreach and the well-documented – in the article itself, no less – mistakes of the past.

Instead of engaging with the IIJA's actual text and structure, the authors rely on a convenient – but wrong-headed – narrative to try to deflect accountability away from those truly responsible and onto those that have invested the trillions necessary to connect nearly every location in the U.S.

Governor Moore Should Emulate Virginia's Regulatory Reform Efforts

 Maryland Governor Wes Moore talks a good game (well, sometimes!) about making Maryland's government more efficient, effective, and accountable. But talking and doing are two different things. 

During the last decade, my Free State Foundation colleagues have often offered ideas, across Democrat and Republican administrations, for implementing meaningful regulatory reform measures in Maryland. While reducing wasteful spending in Maryland's budget is important, of course, cutting red tape and eliminating unnecessary regulations also serves leads to cost savings that enhances consumer welfare.

 

At an event yesterday, Virginia Governor Glenn Youngkin announced that the state had surpassed his target of cutting regulatory requirements by 25%. To lead his regulatory reform efforts, Governor Youngkin quickly established a new Office of Regulatory Management (ORM), initially led by Andrew Wheeler and for the last couple of years directed by Reeve Bull, a well-known expert regarding regulation and administrative law.

 

In this piece, "Regulatory Reform in the Old Dominion," Susan Dudley, herself one of the nation's foremost scholars on regulation, chronicles what was achieved in Virginia by Governor Youngkin, Reeve Bull, and the regulatory reform team – and how they did it.

 

If you are interested in improving Maryland's economic climate and benefitting consumer welfare by eliminating red tape, it's worth reading Susan Dudley's piece and getting inspired by Governor Youngkin's effort. More to the point, I commend it to Governor Moore – hoping it might not be too late for him to gaze across the Potomac and get inspired too.

PRESS RELEASE: FSF's Randolph May Commends FCC for Employing Direct Final Rulemaking

 

 

Regarding the FCC’s July 3 announcement that it plans to employ the “Direct Final Rule” process to eliminate unnecessary rules, Free State Foundation President Randolph May issued the following statement:

“At different times over many years, I’ve encouraged the FCC to issue Direct Final Rules to expedite getting unnecessary and costly rules off its books. With direct final rulemaking, there is still an opportunity for the public to comment, but if no significant adverse comments are submitted within an abbreviated time frame, then the rules identified in the agency’s notice are eliminated without the need for any further bureaucratic rigmarole. The Direct Final Rule process, recognized and promoted by the Administrative Conference of the United States, is a perfect vehicle for advancing the aims of the DELETE DELETE DELETE proceeding, and I commend Chairman Carr for using it to achieve worthwhile deregulatory goals.”