MEDIA ADVISORY: FSF's Randolph May Congratulates Brendan Carr as the Next FCC Chairman

Free State Foundation President Randolph May issued the following statement regarding President-elect Trump's intention to appoint Brendan Carr as FCC Chairman:

I congratulate Brendan Carr as President-elect Trump's choice to be the FCC's next chairman. Given his long experience at the FCC, first as a staffer and then as a commissioner, and his acknowledged expertise regarding communications law and policy, Commissioner Carr is very well-qualified to undertake his new responsibilities leading the agency come January 20.

 

There is much work that still needs to be done to reform communications policies so that they reflect digital age technological and marketplace realities. Enhancing consumer welfare and increasing consumer choice, along with closing remaining digital divides, can be accomplished in free market-oriented ways that minimize unnecessary costs, reduce regulatory burdens, and avoid wasteful spending. And restoring a culture of free speech consistent with the First Amendment is an important objective.

 

I look forward to Brendan Carr getting to work as FCC Chairman. 

PRESS RELEASE: The FCC Latest Inquiry Regarding 'Data Caps' Avoids Economics in Favor of Anecdotes

Regarding the FCC’s newly-initiated proceeding to examine so-called "data caps" imposed by broadband providers, Free State Foundation President Randolph May issued the following statement: 

If I were a cynic, I might think the FCC's newly launched inquiry into "data caps" is just a political ploy with an election looming. But I'll just deal with the issue on the merits. The FCC's news release announcing the inquiry contains snippets of “stories” related by persons claiming to be adversely impacted by the practices of some broadband providers who charge higher prices for heavier usage. But, tellingly, the release contains not one single word regarding the economics of building out and maintaining ever faster, more reliable broadband networks. There is no apparent recognition that the heaviest users impose greater costs on broadband networks, and that, in reality, so-called "data caps" are just a form of "usage-based pricing" common in many different market segments.

 

Of course, if broadband networks grew freely on trees, and the costs of building and maintaining them didn't have to be recovered primarily by the users of the networks, it would be far easier to indulge in the polemics of those who advocate for unlimited usage for all at the same low price. But that's not reality. The FCC can't be an "economics free zone" relying on stories it collects if it expects the private sector to continue to invest enormous amounts of capital — over $2 trillion - just in the last two decades to build out and maintain increasingly faster, more reliable broadband networks.

 

To be sure, there are those who will always need financial assistance to obtain Internet services. But there are ways to provide subsidies to those in need without destroying incentives that lead to economic efficiencies that benefit all consumers.

Media Advisory - FSF Files Comments on FCC's Propose Rules for AI Generated Content in Political Ads

Media Advisory

September 19, 2024

Contact: info@freestatefoundation.org

Free State Foundation President Randolph May and Seth Cooper, Director of Policy Studies and Senior Fellow, submitted comments today in the Federal Communications Commission’s proceeding proposing to require radio and TV broadcasters as well as cable and direct broadcast satellite (DBS) operators to include a disclaimer on all political ads that contain content generated by artificial intelligence (AI). These comments demonstrate that the Commission lacks statutory authority to adopt its proposed regulation of the content of political ads using AI and that, in any event, it would constitute unsound policy to do so.

The complete set of the Free State Foundation comments, with footnotes, is here.

 

Immediately below are the "Introduction and Summary" to the comments, without the footnotes.

Introduction and Summary

These comments are submitted in response to the Commission’s Notice proposing to require radio and TV broadcasters as well as cable and direct broadcast satellite (DBS) operators to include a disclaimer on all political ads that contain content generated by artificial intelligence (AI). They also would be required to include a notice in their online political files disclosing the ad’s use of AI. The Commission’s rush to adopt a novel AI political ad regulation is a misguided power grab – a combination of bad law and bad policy. The Commission should not adopt the proposed rule.

 

The agency lacks statutory authority for its proposed regulation of the content of political ads using AI. The Notice of Proposed Rulemaking cites Section 303(r) and other provisions of Title III of the Communications Act regarding the agency’s power to make rules and regulations necessary to carry out the Act’s provisions in the “public interest.” But the Commission has no traditional regulatory authority over the content of political ads on broadcast radio or TV, and none of those provisions cited in the Notice contain language that reasonably may be interpreted to authorize disclaimer and disclosure mandates for political ads featuring AI-generated content.

Moreover, the FCC’s proposal is likely to run afoul of the Major Questions Doctrine (MQD) as articulated in West Virginia v. EPA (2022) because it involves a question of “vast economic and political significance.” Proposing for the first time to regulate the use of AI in connection with political advertisements appears to be a paradigmatic case meeting the MQD criteria. As such, and because Congress has not clearly granted the FCC authority to adopt the rule it proposes, it’s very unlikely to survive judicial review.

 

By contrast, the Federal Elections Commission (FEC) is given much more explicit statutory authority to regulate significant aspects of political campaign ads under the Federal Election Campaign Act. This includes the FEC’s “exclusive jurisdiction with respect to the civil enforcement” of the Act. To date, however, the FEC has never determined it has jurisdiction to regulate political ads with AI-generated content under its “materially deceptive” statute – and the FEC may lack such authority. If the FEC lacks authority to regulate political ads with AI-generated content, then a fortiori the FCC certainly lacks similar authority under Communications Act provisions regarding broadcast, cable, and satellite services. 

Even if the FCC had the requisite legal authority, the proposal constitutes bad policy because it would apply to ads with AI-generated content that are not materially deceptive, likely causing many viewers to distrust the ads solely or primarily because of the boilerplate disclaimer or simply to “tune out” the disclaimers. Also, it would apply only to ads that are broadcast or transmitted by FCC-regulated services – and not by Internet outlets that garner an increasing share of political ads. Requiring disclaimers on ads shown by broadcast, cable, and satellite services when those same ads may be posted online to wider audiences without disclaimers will add to the confusion, especially since materially deceptive ads are more likely to appear online. Moreover, broadcasters (and cable and DBS operators) do not have inside knowledge about how given political ads were created; yet under the proposed regulation, apparently they would shoulder the burden of having to discern when generative AI was used. By focusing on broadcasters of political ads rather than the creators, the proposed regulation deviates from a more reasonable focus on ad creators that is taken in many nascent state laws regulating the use of AI in elections.

 

Additionally, the proposal would put the Commission in the untenable position of making judgments about “credible third parties” who raise complaints about ads, a matter in which the agency has no expertise. Government should not assume any role in designating third parties as “credible” or not credible for purposes of deciding whether political ads should be disclaimed, disclosed, or taken down. If it were to do so, it would inevitably, and justifiably, invite suspicion that its decisions are politically motivated. The proposed overly broad definition of “AI-generated content” likely would result in broadcast, cable, and satellite services requiring disclaimers for all or nearly all political ads as a regulatory risk aversion measure, rendering such disclaimers unhelpful, if not meaningless.

A PDF of the complete set of Free State Foundation comments, with footnotes, is here.

Media Advisory: Supreme Court Wrongly Lets Stand the Government's Coercion of Social Media

Regarding the Supreme Court’s decision today in Murthy v. Missouri, Free State Foundation President Randolph May issued the following statement:

The majority opinion seems strained in holding that the states and individuals complaining about social media censorship lacked standing. And Justice Alito's dissenting opinion is convincing regarding the merits of the First Amendment claim. By virtue of its very detailed — and chilling — description of the government’s ongoing interactions with Facebook and other leading social media companies, Justice Alito shows that the Biden Administration crossed the line from offering its suggestions regarding the removal of speech it disfavored to threatening retribution if the disfavored speech was not removed. Private entities are free to carry or not carry whatever speech they choose, but when government actions rise to the level of entangled coercion of private entities that they did in this case, then the government violates the First Amendment by suppressing the free speech rights of those censored.

Press Release: The FCC's Digital Discrimination Order Includes "The Long Tail of Intangible Variables"

Free State Foundation President Randolph May issued the following statement regarding the FCC’s adoption of its Digital Discrimination order.

The FCC and the Biden Administration both acknowledge that there is no evidence in the record or otherwise that Internet service providers intentionally have discriminated based on income or otherwise in deploying broadband facilities or providing access to broadband networks. So, rather than using this finding as a point of departure for establishing a sensible framework to prevent any digital discrimination that may occur in the future, the Commission opts to use it as a basis for perhaps the most far-reaching unauthorized power grab in the history of the agency. The foundation upon which the Commission's Democrat majority hopes to rest this power grab is the adoption of a "disparate impact" standard, rather than a disparate treatment standard. Based on existing judicial precedent, I predict the courts will find this a shaky foundation indeed.

 

As astonishing as it may seem, it is no exaggeration to say that the Commission claims for itself the power to regulate all — yes, all — aspects of the policies and practices of Internet providers, including a provider's decisions regarding deployment, network reliability, network maintenance, the equipment it distributes to customers, pricing, promotional discounts, customer service, language options, credit checks, marketing and advertising, and more. And, as astonishing, the Commission claims the power to regulate the policies and practices of landlords, banks, construction firms, unions, advertising, and other business sectors. The order makes clear that, for Internet providers and for those firms that have no idea even where the FCC is located, the list of policies and practices which the agency claims the right to examine, and the list of businesses covered, is non-exhaustive.

 

Indeed, the FCC actually touts "the long tail of intangible variables" that can't be foreseen as a justification for placing no tangible limits on the power it asserts to regulate all aspects of the operations of all the businesses now within its sights.

 

Anyone who doesn't foresee that the Commission's order will lead to rate regulation, however denominated, of Internet providers is engaging in willful blindness. The Commission has emphasized it will examine a provider's pricing, and, in assessing "economic feasibility," it will consider the provider's projected income, expenses, demand, and expected rate of return. Those factors are at the core of regulating the rates charged by public utilities — which the FCC now has no hesitancy in admitting that’s what it is determined for Internet providers to be. It's difficult to see how the agency will not get bogged down in years-long proceedings that resemble old-fashioned utility rate cases.

 

Finally, what ought to be as disturbing as anything else is the certainty that the effect of the order will be to curtail the investment and innovation which should be the primary objective of government policy, including promoting equal access.   

MEDIA ADVISORY: FSF's Seth Cooper Reacts to NAS Study on Potential Spectrum Interference in L-Band

The following statement may be attributed to Free State Foundation Director of Policy Studies & Senior Fellow Seth Cooper:

 

Now that the National Academies of Sciences has completed its review of the FCC's 2020 order that authorizes Ligado Networks to operate mobile-satellite services in the L-band, NTIA hopefully will constructively work with Ligado to identify any old equipment owned by DOD that might need replacing. The FCC's order from April 2020, which was based on careful technical analysis, anticipated the possibility that some older equipment might need to be replaced due to harmful signal interference and it outlined a process for handling that. Importantly, the NAS study expressly states that it was not an evaluation of the FCC's decision from April 2020, and it has no legal operative effect. Executive branch agencies and members of Congress should not overread the NAS study's statements or miss the key point that the study acknowledged that most commercial GPS receivers will not experience significant harmful interference from Ligado's operations.

MEDIA ADVISORY: NTIA Releases Notice of Funding Opportunity for the BEAD Program

The following statement may be attributed to Free State Foundation Director of Policy Studies & Senior Fellow Seth Cooper:

On May 13, NTIA released its anticipated Notice of Funding Opportunity as part of the agency's implementation of the Broadband Equity, Access, and Deployment Program ("BEAD Program"). NTIA deserves credit for getting the ball rolling on the BEAD Program. We hope that NTIA and states that participate in the program will be successful in timely, accurately, and efficiently funding the construction of broadband Internet networks that will finally reach Americans who are truly unserved by broadband services.  

 

At the same time, certain aspects of NTIA's Notice raise some concerns. Although the Notice does indicate that Eligible Entities shall prioritize unserved locations when scoring and awarding funding for last-mile deployment projects, much of the Notice gives the appearance of putting unserved and underserved locations on equal footing. The BEAD Program will fail in its essential purpose if Americans are still left unserved by broadband services after the $42.5 billion allocated for the program is spent. Going forward, it will be important for NTIA to emphasize that unserved locations are to be given first priority for receiving grant awards for broadband deployment. And states awarding grants should be responsible for ensuring that every last unserved location within their jurisdiction gets connected to broadband. Otherwise, BEAD Program dollars may end up going to so-called "underserved" locations wherein most Americans already have access to broadband Internet services with 80 Mbps download speeds. 

 

And while it is good that NTIA's Notice does not impose "open access" or "net neutrality" regulatory conditions on the awarding of funds by states under the BEAD Program, the Notice includes a misguided recommendation that states ought to favor open access wholesale last-mile broadband services in setting their criteria for awarding grants. Open access requirements do not and would not help unserved Americans gain access to broadband. It is essential that states keep focused on connecting the truly unserved and not bog down the process or the program's ultimate success by pursuing open access requirements. 

MEDIA ADVISORY: FSF's Seth Cooper Reacts to Supreme Court's Decision on Media Ownership Rules

The following statement may be attributed to the Free State Foundation's Director of Policy Studies and Senior Fellow Seth Cooper regarding the U.S. Supreme Court's decision in FCC v. Prometheus Radio Project:

Today's unanimous decision by the Supreme Court rightly upholds the FCC's sensible decision to reform media ownership rules that date back to the 1970s. In an era of broadcast, cable, satellite, and Internet-enabled media abundance, government-imposed ownership restrictions on select legacy media outlets are arbitrary and they effectively restrict speech in tension with the First Amendment. As the Court found, the Commission's 2017 decision to remove some of its old media ownership rules was a reasonable exercise of the agency's statutory duty to periodically review and update those rules to fit with current marketplace conditions. Thankfully, Court's decision puts an end to the years-long analysis paralysis over media ownership regulation in the lower court.  

MEDIA ADVISORY: Congress Passes Copyright Reforms on Streaming Piracy and Small Claims

The following statement may be attributed to Free State Foundation Senior Fellow Seth Cooper regarding the passage of   the Protect Lawful Streaming Act and the Copyright Alternative in Small-Claims Enforcement Act (CASE Act) – both of which were included in the omnibus spending bill for 2021.

The Senate and House deserve thanks for passing these needed reforms and strengthening copyright protections against online infringements that cost copyright owners hundreds of millions of dollars each year.  The Protect Lawful Streaming Act targets illicit commercial streaming operations with tougher criminal penalties. As I recently stated in a blog post, operators of illegal movie and music streaming services faced less severe penalties than operators of online piracy sites for downloading copyrighted content. There obviously was no reason for that disparity in the law. By increasing criminal infringement penalties for streaming piracy, Congress has helped make it worthwhile for prosecutors to go after illegal commercial streaming operations. 

By passing the CASE Act, Congress has provided many copyright owners with access to justice through a less expensive and voluntary small claims venue for hearing infringement claims. The six-figure costs of hiring attorneys as well as fees and legal costs of going to federal court make civil copyright enforcement beyond the reach of copyright owners of modest means. Now copyright owners will soon have a less expensive and simpler process for resolving copyright infringement claims, including certain types of online infringement claims.

MEDIA ADVISORY: USF Contribution Factor Tops 31% and May Be Nearing a Tipping Point

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

On December 14, the FCC’s Office of Managing Director announced that the Universal Service contribution factor for Q1 2021 will be a record 31.8%. This record amount is a result of a continuing drop in interstate and international revenue, The steady increase over time in the amount of the USF "tax," which is the surcharge added to every consumer’s telecom bill for interstate and international calls, is shocking and ought to receive far more widespread attention that it has. This consumer tax — because that is exactly the economic effect of USF surcharge — is regressive because, perversely, it negatively impacts low income subscribers who can least afford to pay it more than higher income subscribers who can.

 

It ought to be clear that USF surcharge increases can't go on too much longer without reaching a tipping point — that is, the point at which many more current subscribers will rapidly abandon services subject to the tax. When that happens, the current USF regime, like the proverbial house of cards, may come tumbling down. What this means is that it is time for Congress to tackle comprehensive USF reform, including especially consideration of replacing the contribution surcharge mechanism with direct congressional appropriation to fund USF programs. This would be a more sustainable, transparent, and efficient way to support the USF programs, such as Lifeline, that are deemed necessary in the public interest.  

MEDIA ADVISORY: FCC's Actions Today Display Commendable Bipartisan Unity

The following statement may be attributed to Free State Foundation President Randolph May regarding today's actions by the FCC:

In a series of votes today, the FCC took some important steps to advance sound communications policy. Probably the most consequential action was the adoption of an order that immediately makes available additional spectrum for next-generation WiFi in the 5.9 GHZ spectrum band, while also reserving spectrum to be used to improve auto safety. While it is not to be expected that the commissioners always will agree across party lines on all consequential matters, nor should they, today's actions show that on many matters, especially those that are more technically and engineering-oriented such as spectrum allocations, they can and do agree on a bipartisan basis. In today's environment, and given the importance of more ubiquitous broadband connectivity and 5G deployment to the nation's social and economic well-being, this is worthy of note, and commendation.

Media Advisory: FSF Agrees with FCC General Counsel's Legal Analysis of FCC's Authority to Construe Section 230

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

I've reviewed the analysis of the FCC's General Counsel regarding the FCC's authority to conduct a proceeding to clarify the meaning of certain ambiguous terms in Section 230, and I agree with his legal analysis. Indeed, his analysis, relying on Section 201(b) of the Communications Act, is fully consistent with the comments and reply comments that FSF filed with the Commission. See the excerpts below and the attached comments and reply comments.

 

The General Counsel's determination that the Commission possesses authority to conduct a proceeding to clarify the meaning of Section 230's ambiguous terms does not mean that the courts necessarily will agree that any Commissions interpretations are correct, only that courts reviewing the agency’s action will accord the agency’s interpretation substantial deference.

 

I hope, if the Commission does conduct a proceeding to clarify the meaning of Section 230's provisions, that those participating, regardless of their political persuasion, will not let politics and reflexive preconceptions trump sound legal analysis. And it is important to keep foremost in mind, given that Section 230 is now a quarter-century old, and today's Internet ecosystem bears little or no resemblance to that which existed at the time of Section 230's adoption, Congress, ultimately, may choose to revise or not revise the law as it sees fit.

.     .     .     .     .

 

Here are brief excerpts from the Free State Foundation's submissions co-authored by me and FSF Senior Fellow and Director of Policy Studies Seth Cooper:

 

FSF Comments: "Section 230 is part of the Communications Act of 1934, as amended. And the Commission has authority pursuant to Section 201(b) to 'prescribe such rules and regulations as may be necessary in the public interest to carry out this chapter.'"

 

FSF Reply Comments: "[I]t is worth noting that the Court relied on a grant of authority in Section 201(b) as empowering the Commission to issue a declaratory ruling clarifying the meaning of certain wireless siting provisions in Section 332 of the Communications Act."

MEDIA ADVISORY: The FCC Moves Forward in Its Section 230 Proceeding

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

It looks like FCC Chairman Ajit Pai agrees with the comments that the Free State Foundation submitted to the Commission contending that the agency possesses the authority to clarify the meaning of some of Section 230's terms and that it may be able to do so consistent with the First Amendment. In our comments, we emphasized that there is a difference between the FCC providing its interpretation as to the meaning of Section 230's provisions, for whatever weight the courts then may decide to give to the agency's interpretation, and the FCC taking enforcement actions pursuant to Section 230. And we emphasized that any action that has the effect of narrowing Section 230's broad grant of immunity doesn't necessarily violate the First Amendment. There is an important distinction, for purposes of the First Amendment application, between protecting a content provider's, say Twitter's, right to decide what to carry or delete, and granting such content provider immunity from suits for all of its content moderation decisions. I'm pleased, but not surprised, that Chairman Pai appreciates these points regarding the First Amendment and the Commission's legal authority.

MEDIA ADVISORY: The FCC Should Be Commended for Holding ORAN Forum

Regarding the FCC's forum today regarding ORAN (open radio access networks), the following statement may be attributed to Free State Foundation President Randolph May: 

The FCC should be commended for holding the forum today exploring ORAN, what it means, and what it may portend for the future. Even discounting the usual hype accompanying new technological advances and business models, ORAN, properly understood, holds the promise to promote increased marketplace competition and innovation, and, at the same time, promote U.S. national security by increasing supply chain diversity. ORAN could be a case in which technological advances associated with 5G, artificial intelligence, and virtualization, and changing business models, advance freedom in both the economic and geopolitical spheres. But this should be done largely in a context of private sector decision-making with minimal direct government intervention and mandates.

MEDIA ADVISORY: Today's Senate Armed Services Hearing on Ligado

The following is a compilation of a Twitter thread by Free State Foundation President Randolph J. May regarding today's hearing before the Senate Armed Services Committee on the FCC's grant of Ligado's application of L-Band spectrum for its mixed satellite-terrestrial network:

Senate Armed Services Comm. has every right to hold a hearing on @FCC grant of @LigadoNetworks long-pending license application to use L-Band spectrum. But it's disappointing the hearing is so one-sided. FCC based its decision on its technical expertise, and it should be heard. Because grant of @LigadoNetworks will further #5G deployment, it furthers a national security interest. There is widespread agreement US doesn't want to lose #5G race to China or others. I have confidence in the engineering expertise of @FCC re interference determination. To be constructive, focus of the hearing shouldn't be on reversing the FCC decision, but looking towards how FCC should implement mitigation actions IF needed after Ligado net is operational. I have confidence that @FCC has the requisite authority, and would exercise it, IF it turned out that adjustments to @LigadoNetworks license were needed as a matter of national security once Ligado's network is operational.