President Trump Holds White House Meeting to Discuss EchoStar and FCC Review

News outlets have reported that President Donald Trump held a meeting at the White House with EchoStar Chairman Charlie Ergen and FCC Chairman Brendan Carr on June 12. Although we do not know for certain what was discussed at the White House meeting, it is a supremely safe bet that the conversation included the FCC's current review of EchoStar's compliance with deadlines for reaching wireless facilities construction milestones. Reports indicate the President rightly hopes to prevent a scenario in which a major U.S. company goes bankrupt. 

EchoStar previously acquired wireless spectrum licenses in conjunction with the T-Mobile/Sprint merger and settlement with the U.S. Department of Justice. It has invested billions in private capital to build out a nationwide 5G wireless network, which is available to 80% of Americans. EchoStar’'s network offers a fourth competitive nationwide facilities-based mobile wireless service, and its network is unique for its deployment of Open Radio Access Network (Open RAN) technology. 

 

Free State Foundation President Randolph May and I expressed our views regarding the FCC's review of EchoStar's compliance with buildout commitments in reply comments filed on June 6.

Reduce Multiple Government Agency Merger Reviews

On June 11, the Connecticut Public Utilities Regulatory Authority reportedly issued an order approving the Verizon/Frontier merger. The approval is welcome news, insofar as it involves the clearing of a regulatory hurdle to the completion of a pro-competition, pro-consumer transaction. As explained in a blog post from last month, the FCC approved the Verizon/Frontier on May 16. In its order, the FCC found that there are no potential transaction-related public interest harms and that there are some likely public interest benefits from the transaction. Verizon's and Frontier's wireline services operate in different geographic territories, meaning consumers do not lose a choice of providers as a result of the merger. Moreover, Verizon is more likely to invest in and improve service in Frontier territories than Frontier would absent the merger. Verizon's acquisition of Frontier means that fiber will reach more Americans – sooner.

 

Even with the approval by Connecticut regulators, the Verizon/Frontier merger is reportedly subject to pending reviews by state regulators in Pennsylvania and California. This raises the process issue of whether overlapping reviews of proposed mergers by state regulators are likely to provide added public benefits or more likely to result in extra costs and delays due to redundant reviews. This is not a new issue; it was the subject of my December 2010 Perspectives from FSF Scholars, "Multiple Government Regulatory Reviews Burden Telecom Mergers with Too Many Conditions." Therein, I discuss the problem of compounding process costs and regulatory conditions that can result from redundant merger reviews. 

 

One approach for a more efficient, streamlined process for mergers involving interstate communications service providers is to enable a sole federal agency review process in which state regulators are encouraged to provide input regarding state-specific concerns. 

 

Also, the FCC could adopt rules or issue a declaratory order setting forth limits on state regulatory conditions for merger approval as well as limits on state-level merger review process shotclocks. Actions by state regulators that transgress those limits and conflict with federal law would be subject to federal preemption. Certainly, this approach is viable in the interstate wireless communications services context, as merger review by state public utility commissions effectively constitutes state-level restrictions on market entry contrary to Section 332(c)(3) of the Communications Act. 

 

Hopefully, Pennsylvania and California will promptly conclude their reviews of Verizon/Frontier and allow fiber broadband to timely deploy to more Americans. 

Regulation Article Critiques the Weak IP Rights Regime

The Spring 2025 issue of Regulation magazine features an eye-opening article by Law Professor Jonathan M. Bartlett titled "The Perils of 'Free' Information." In the article, Mr. Bartlett tackles the narrative that IP owners are exploitative monopolists that inflate prices and bar competition and corresponding legal and policy strategies employed by certain tech platforms "to weaken IP rights to reduce the costs of securing content and tech assets, which are then monetized within a portfolio of complementary products and services." 

One of Mr. Bartlett's insights is that "even [IP-free] markets usually restore some form of property rights—whether implemented by IP law, contract, or technology—to sustain incentives to invest in innovation." He describes how tech platforms have migrated toward closed-access subscription models that rely on technology and contracts to serve as a function equivalent of IP rights. The weakening of IP rights undermines innovation and market entry by new competitors. According to Mr. Bartlett, "[w]hile innovation in information-technology industries can sometimes persist in a weak-IP environment, it would likely take place principally within the bundled product-and-service ecosystem maintained by tech platforms or the vertically integrated structures maintained by large bricks-and-mortar producers." 

 

Mr. Bartlett writes that "IP rights are often a precondition for sustaining the innovators and artists that drive knowledge ecosystems." He is in good company in writing this. The idea that creators and inventors require secure and exclusive rights in their writings and discoveries to fully realize their ideas and bring them to market goes back to the earliest days of our nation when the Framers of the U.S. Constitution drafted the Article I, Section 8 IP Clause. 

 

Mr. Bartlett's article is worth reading in full. It is based on his important new book, The Big Steal: Ideology, Interests, and the Undoing of Intellectual Property (Oxford University Press, 2024).

Study: State Broadband Rate Controls Have Bad Consequences for Investment and Competition

On May 29, ACA Connects held a webinar highlighting a newly released study by Cartesian titled "State Broadband Rate Regulation: Impact on Investment and Competition." The study analyzes the negative effects of state-level price controls for fixed broadband Internet service investment and access.  

My February 2025 Perspectives from FSF Scholars, "States Should Keep Broadband Internet Services Free From Price Controls," addressed New York's requirement that fixed providers in the state offer $15 and $20 monthly price plans to qualifying consumers. In response to the state's law requiring service offerings at rates far below market, AT&T discontinued its AT&T Internet Air fixed wireless access (FWA) service. Also, Starlink petitioned for an exemption and thus apparently intends to limit its subscribership to less than 20,000 in New York. Those early responses to the implementation of New York's law are real-life examples of how imposing price controls in competitive markets creates more problems than it solves. New York's rate regulation has discouraged market entry by new providers using innovative technologies. 

 

Back to the Cartesian study. Based on its economic model, Cartesian found that price caps on fixed broadband Internet service would result in most states losing 15% to 35% of modeled capital expenditures by marketplace providers, depending on the state and based on whether it imposes a $30 monthly or $15 monthly low-income plan mandate.  

 

Cartesian similarly concluded that American consumers lose choices as a result of state-level rate regulation, as it found that most states would get 15% to 35% fewer locations served by new competitive entrants. Among its key findings: a 19% drop in investment (per $30 low-income monthly plan) would result in one less provider for 3.3 million locations, and a 41% drop in investment (per a $15 low-income monthly plan) would result in 7.5 million locations with one less additional competitor. 

 

ACA Connects and Cartesian should be commended for preparing and publishing the insightful study about the harmful downsides of state-level rate regulation of broadband services. 

 

The bottom line is that state-level rate regulation is a poor policy for promoting Internet access. Instead of imposing price controls that will inevitably reduce investment and new market competitors, state legislators who are concerned about affordability and lack of access for low-income households should consider options such as (1) promoting awareness of the federal Lifeline subsidy program, which offers $9.25 per month toward broadband service for qualifying households; (2) using state universal service fund subsidies or establish other state-level subsidy programs to supplement Lifeline support for their residents; (3) promoting awareness of private affordability programs such as Xfinity's Internet Essentials. 

TMT with Mike O'Rielly – Ep 22: Pending SCOTUS Decision on USF

Episode 22 of "TMT with Mike O'Rielly," a videocast featuring former FCC Commissioner and Adjunct Senior Fellow at the Free State Foundation Michael O'Rielly, was released on June. In this episode, titled "The Pending U.S. Supreme Court Decision on the Universal Service Fund," Mr. O'Rielly has a conversation with guest Tim Donovan, President and CEO of the Competitive Carrier Association (CCA). Their conversation addresses issues involving the much-anticipated ruling by the Supreme Court in FCC v. Consumers' Research. Streaming video of the episode is now available:

Deregulation Is the Cure for the Video Regulatory Disparity

In a May 27 op-ed, just-departed FCC Commissioner Nathan Simington, along with his Chief of Staff Gavin Wax, argued that a 2014 proposal by then-Chairman Tom Wheeler to regulate "virtual" video distributors (vMVPDs) the same as facilities-based video distributors (MVPDs) "deserves a second look." Relatedly, Chairman Brendan Carr, in a March 7 letter to YouTube TV and its parent company, Alphabet, noted that "the FCC and Congress have been encouraged by a diverse group of stakeholders to expand the Commission's existing rules and to apply the same or a similar framework to virtual MVPDs like YouTube TV" and that it "has multiple open proceedings seeking comment on whether to do just that."

Without question, the intended goal – in the words of Simington and Wax, "placing [vMVPDs] on equal regulatory footing with cable and satellite operators" – is one that policymakers should prioritize. After all, and as I described most recently in "No Basis Exists in 2025 for Rules Targeting Traditional Video Providers," a March Perspectives from FSF Scholars, facilities-based MVPDs subject to FCC regulations have been shedding subscribers for years while their online competitors – including the vMVPD YouTube TV, which is expected to surpass Charter Communications, Inc.'s Spectrum to become the largest MVPD by the end of 2026 – have been adding subscribers at a breakneck pace.

However, given that the video distribution marketplace is, and grows steadily more, competitive, I (and others affiliated with the Free State Foundation) have argued consistently that the appropriate path to a level playing field is through the deregulation of facilities-based MVPDs, not the expansion of existing regulations to vMVPDs.

In Comments filed in the "IN RE: DELETE, DELETE, DELETE" proceeding, Free State Foundation President Randolph May and I pointed out that "what primarily stands in the way of unbridled, consumer-benefiting competition are ill-fitting rules that hamstring the subset of participants to which they uniquely apply: cable operators and Direct Broadcast Satellite (DBS) providers."

And in "Video Subscriber Updates Underscore Ongoing Shift to Streaming," an August 2023 post to the FSF Blog, I wrote that "the appropriate response to these ongoing trends is to eliminate outdated rules, not expand them."

The proposal to extend rules targeting legacy MVPDs to vMVPDs isn't only the wrong approach from a competition policy perspective, however. It also appears to lack a statutory justification.

In a March 2023 letter to Senator Charles Grassley (R-IA), then-FCC Chairwoman Jessica Rosenworcel explained that the plain language of 47 U.S.C. § 522(4), which defines a "channel" as "a portion of the electromagnetic frequency spectrum which is used in a cable system and which is capable of delivering a television channel," limits the FCC's ability to regulate vMVPDs that stream content over the public Internet:

It is imperative that the Commission give these words full meaning. As reflected in the record, online video programming distributors do not neatly fit in these statutory definitions because they lack a physical connection to subscribers and do not use any electromagnetic frequencies when delivering programming to their viewers. As you know, the Commission lacks the power to change these unambiguous provisions on its own but can do so if Congress changes the underlying law.

This statutory impediment has become more pointed in the wake of the Supreme Court's Loper Bright decision rejecting the Chevron doctrine. Rather than defer to an agency interpretation of an ambiguous statute, reviewing courts now will adopt what they view as the "best reading of the statute." In this case, and assuming for argument's sake that the statute is ambiguous, that seemingly would lead to the judicial conclusion that the FCC's regulatory authority over MVPDs does not extend to vMVPDs that deliver digital bits over the public Internet.

FCC Chairman Carr Says DELETE Legacy Cable TV Rules

Yesterday FCC Chairman Brendan Carr said: ‘’Our dated and reticulated set of cable television rate regulations are one such example. That is why I would like to consider an order that gets rid of those obsolete and unworkable rules.”  He's proposing to remove "77 rules and requirements that have no meaningful application today."

This would be a meaningful regulatory reform accomplishment if it occurs.

The Free State Foundation's initial comments in the FCC's "DELETE DELETE DELETE" proceeding were focused most heavily on just what Chairman Carr is now proposing: the elimination of outdated legacy regulations applicable to cable and satellite TV operators.

Here is part of what FSF said in its comments:

The ability to deliver the highest-quality video over broadband, in any format and to any connected device, has proven to be the great equalizer – a development that indisputably eviscerates any policy rationale underlying legacy regulations premised upon the existence of claimed video distribution "bottlenecks." As ongoing trends in the marketplace make plain, facilities-based Multichannel Video Programming Distributors (MVPDs) enjoy no competitive advantage vis-à-vis over-the-top providers warranting one-sided regulations.

To the contrary, what primarily stands in the way of unbridled, consumer-benefitting competition are ill-fitting rules that hamstring the subset of participants to which they uniquely apply: cable operators and Direct Broadcast Satellite (DBS) providers. This proceeding can foster optimal efficiency levels in the operation of the marketplace by realigning the regulatory environment to fit the facts that exist on the ground today.

I'm encouraged by Chairman Carr's statement -- and I look forward to the deregulatory follow-through!