President Trump Revokes President Biden's Mislabeled "Promoting Competition" EO

On August 13 President Trump issued an Executive Order revoking President Biden's Executive Order 14036 issued in 2021. EO 14036 was styled "Promoting Competition in the American Economy." 

Naming EO 14036 "Promoting Competition in the American Economy" was real misnomer in the same way that President Biden's "Inflation Reduction Act of 2022" was misleadingly labeled. That law did a whole bunch of things, but reducing inflation was not one of them. Instead, it increased inflation. Likewise, the "Promoting Competition" executive order encouraged adoption of a lot of unsound policies by various agencies. The overall effect was not to increase competition and make markets freer but to increase government intervention in key segments of the U. S. economy.

 

With respect to communications law and policy, the Biden EO "encouraged" the FCC to adopt "net neutrality" rules to convert broadband Internet service providers into public utilities. Additionally, it "encouraged" the agency to prohibit early termination fees; to require broadband providers to regularly report broadband price and subscription rates to the agency; and to prevent landlords and cable and Internet service providers from inhibiting tenants' choices among providers.

 

                                                  

Not surprisingly, the FCC under Jessica Rosenworcel's leadership proceeded to implement, or try to implement, all of the actions it was "encouraged" to implement. Most of these sugar-coated government interventions did not contribute to enhancing competition or benefitting consumers.

 

So, I'm pleased President Trump has revoked the Biden's Executive Order 14036 which provided a lot of the impetus for many of his administration's regulatory crusades.

 

That said, I have no hesitancy in admitting that I wish President Trump would resist his not-so-occasional urges to "encourage" government intervention in the free marketplace when it strikes his fancy. Could he issue an executive order that would restrain himself?

President Trump Designates Brendan Carr as New FCC Chairman

As noted in a statement released by the FCC, today, January 20, 2025, President Donald J. Trump signed an order designating Brendan Carr as the new Chairman of the Commission. Congratulations to Chairman Carr, and best wishes for success in steering the agency into new direction for federal communications policy. 

Chairman Carr has many times been a speaker at prior Free State Foundation Annual Conferences, including #FSF16 – FSF's 16th Annual Conference held in Washington, D.C. on March 12, 2024, where then-Commissioner Carr was part of the keynote conversation, "TMT with Mike O'Rielly."

Also, as widely reported on January 16, President Trump intends to nominate Olivia Trusty to fill the vacant position member position on the Commission. Thus, congratulations also are due to Ms. Trusty. Members of the Senate should promptly conduct a committee hearing on her nomination and bring her nomination to a vote.  

FSF President Randolph May's Statement Regarding Former President Trump's Lawsuits Against Social Media Companies

Free State Foundation President Randolph May issued the following statement in reaction to former President Trump’s filing of lawsuits against Twitter, Facebook, and Google’s YouTube:

Regardless of what one thinks of former President Trump, or his use of social media, the lawsuits he filed today against Twitter, Facebook, and Google's YouTube are not frivolous. They claim that the immunity from liability granted to social media companies by Section 230 of the Communications Act, in effect, converts these private firms into 'state actors' for First Amendment purposes because the immunity grant amounts to a delegation of authority by Congress that facilitates the companies' censorship actions. If the state action theory is correct, then the Big Tech companies would not be able to censor posts — or deplatform persons — based on the content of their lawful speech.

 

In his recent Biden v. Knight First Amendment Institute concurring opinion, Justice Thomas lent credence to the "state actor" theory upon which Trump’s lawsuit is based, and other respected scholars have done so as well. While the claim is not frivolous, I'm not convinced at this point that Section 230's grant of immunity, standing alone, is sufficient to make the Big Tech social media companies state actors. It is certainly possible, however, that if the case makes it to the discovery phase, Trump could uncover a trove of emails from various congressional officials urging the social media companies to take certain actions which the firms quickly took. That would make the case even more interesting, and the claim stronger.

President Trump Issues Executive Order for Agency Regulatory Accountability

On January 18, President Trump issued an Executive Order intended to increase the democratic accountability of executive branch agencies' regulatory activities. It requires senior appointees of the President to initiate the  Administrative Procedure Act (APA) process process at their agency, to sign finalized rules, and to approve their agency's regulatory agenda. The idea behind this executive order is to help ensure that federal agency heads chosen by the President – officials at least indirectly accountable through national elections – take responsibility for the actions of the agencies they oversee rather than pass of significant rulemaking and regulatory implementation decisions to subordinates who are insulated from the democratic process. Since federal agency heads chosen by the President are removable by the President, the Executive Order is thus a measure for increasing the President's responsibility for regulatory undertakings by the executive branch.

President Trump's Executive Order is consonant with the constitutional separation of powers. It doesn't reduce the powers of any particular executive branch agency, nor does it transfer any power away from the executive branch to the other branches. No lengthy or expensive process requirements are involved. Indeed, the Executive Order appears to be a common-sense measure for democratic accountability. Despite the late hour of the Executive Order's release, it would be to the next Administration's credit to retain and follow the Order. 

First Amendment Challenges Involving Section 230 Fall Short

On December 11, 2020, the U.S. District Court for the District of Columbia dismissed a First Amendment challenge to President Trump's Executive Order (EO) 13,925. Among other things, EO 13,925 charged the U.S. Secretary of Commerce to file a petition with the FCC requesting that the Commission propose regulations to clarify the scope of Section 230(c) of the Communications Decency Act. 

In CDT v. Trump, the District Court concluded that CDT's First Amendment claims against President Trump did not specify a concrete or imminent injury, and that CDT therefore lacked legal standing to bring its claims. As the court explained, Article III precedents require an organization making a claim to sufficiently allege a demonstrable injury to a party's activities, and that "a mere setback ... to abstract social interests" is insufficient. Additionally, the court concluded that CDT's alleged injury from the EO were not imminent but conjectural or hypothetical. The court observed that the EO doesn't apply to private parties but "only sets a course of government process into motion." The EO, for instance, directed NTIA to "file a petition for rulemaking . . . requesting that the FCC expeditiously propose regulations" regarding the meaning and application of Section 230. According to the court, speculative future government action through that process is not enough to establish Article III standing.

 

The court in CDT v. Trump also concluded that the injunctive and declaratory relief CDT sought are unavailable against the President – the lone defendant named in the case. And the court determined that even if Article III standing were satisfied, CDT's claims still were unripe for adjudication. The result in CDT v. Trump was similar to the result reached in October 2020 by the U.S. District Court for the Northern District of California. In Rock the Vote v. Trump, the court concluded that the party bringing First Amendment challenges against EO 13,925 lacked Article III standing. 

 

In sum, the dismissals of these First Amendment challenges to EO 13,925 were resounding, and the parties raising them resorted to standing arguments that were so thin as to appear silly. These court decisions are reminders of a broader point that many First Amendment-related claims about Section 230 are off-base. As Free State Foundation President Randolph May explained in his November 2020 Perspectives from FSF Scholars paper, "narrowing Section 230 is not necessarily a First Amendment violation." It is one thing for government to mandate what a private actor must say, but it is something else for the government to confer special immunity on private actors from the consequences to third parties of their speech-related conduct. And as CDT v. Trump and Rock the Vote v. Trump show, it is altogether another thing for government agencies to undertake a process to consider what the terms of Section 230 mean and how they apply – and which may or may not lead to some sort of government action. 

 

For more on the FCC's authority to issue interpretations of Section 230's terms as well as discussion of First Amendment-related claims, see the Free State Foundation's public comments and reply comments filed in the Commission's proceeding. 

Commissioner O'Rielly Urges President to Help Free Up Federal Mid-Band Spectrum for 5G

On April 8, FCC Commissioner Michael O'Rielly sent a letter to President Donald Trump that calls attention to our nation's urgent need to put more mid-band spectrum into use for commercial 5G use and to the apparent fact that the U.S. Department of Defense is hesitant to part with any of that spectrum. Commissioner O'Rielly has played a valuable role in several FCC proceedings to make spectrum available for next-generation commercial mobile networks. He is right in imploring the President to engage DoD and find the most practical way to repurpose some of that valuable spectrum in a manner that is worthwhile to the DoD and consistent with our nation's national security interests. 

Both the matter of freeing up spectrum currently belonging to the federal government and interagency cooperative processes regarding spectrum use were topics addressed during the hot topics panel held at the Free State Foundation's Annual Telecom Policy Conference on March 10. The conference panel video and transcript are available online. 

President Trump Signed the TRACED Act

On December 30, 2019, President Donald Trump signed the TRACED Act into law. As highlighted in my post from December 13, the TRACED Act directs a number of federal agency actions toward combatting unwanted robocalls as well as ID spoofing. The President and the 116th Congress deserve credit for addressing those important consumer protection issues. Now it's up to the FCC and other agencies to begin implementing the law and hopefully help reduce substantially the illegal scams and other unwanted being calls made to American consumers. 

President Trump Signed the Music Modernization Act

Yesterday, President Trump signed the "Orrin Hatch-Bob Goodlatte Music Modernization Act" (H.R. 1551), which creates a compulsory blanket licensing system for music recordings, updates the rate standards applicable to music licensing, provides copyright royalties to pre-1972 artists, and provides compensation to producers, mixers, and sound engineers.

President Trump released the following statement when he signed the bill:

The Music Modernization Act closes loopholes in our digital royalty laws to ensure that songwriters, artists, producers, and providers receive fair payment for the licensing of music. 

Streaming has made music more accessible than ever, yet our laws have not kept up with the pace of technology.  As such, artists of all varieties and all career stages are losing out on revenue that they have rightly earned

This legislation will help ensure that artists from eras long ago, in addition to modern day, can retire in security, and that current and upcoming artists can make a living by creating amazing works that captivate their fans and entertain our nation — and the world. 

FSF scholars have advocated for Congress to pass the Music Modernization Act in order to better secure copyright protections and royalty payments for recording artists, songwriters, and other music professionals.

Further Readings:

Randolph May and Seth Cooper, "A Constitution Day to Strengthen Copyright Protection," Perspectives from FSF Scholars, Vol. 13, No. 35, (September 17, 2018).

Seth Cooper, "Senate Should Vote on the Bill to Modernize Music Copyright," FSF Blog, (August 9, 2018).

Seth Cooper, "Senate Should Advance Consensus Bill to Modernize Music Copyright," FSF Blog, (May 15, 2018).

Randolph May and Seth Cooper, "World IP Day – An Opportune Time to Modernize Music Copyright Protections," Perspectives from FSF Scholars, Vol. 13, No. 14, (April 23, 2018).

A Trade War May Not Fix China's Weak IP Protections

Earlier this month, President Donald Trump threatened to impose tariffs on $500 billion of Chinese imports, the value of all U.S. imports from China in 2017, because he claims China has taken advantage of the United States. President Trump already imposed 25% tariffs on $34 billion of Chinese goods. He said his action was taken “in light of China's theft of intellectual property and technology and its other unfair trade practices.” China immediately retaliated with equivalent tariffs, 25% on $34 billion of imported U.S. goods.

President Trump’s concerns about China’s weak protections of intellectual property (IP) rights are justified, but imposing tariffs and igniting a trade war may not be the best way to fix the problem.

In 2013, international trade of counterfeit and pirated goods represented up to 2.5% of world trade, or as much as $461 billion. Of that, China alone is estimated to account for more than 70% of global physical trade-related counterfeiting, amounting to more than $285 billion. Physical counterfeiting accounts for the equivalent of 12.5% of China’s exports of goods and over 1.5% of its GDP. China and Hong Kong together are estimated to account for 86% of global physical counterfeiting, which translates into $396.5 billion of counterfeit goods each year.

China and Hong Kong account for 87% of counterfeit goods seized coming into the United States. The annual cost to the U.S. economy of counterfeit goods, pirated software, and theft of trade secrets exceeds $225 billion and could be as high as $600 billion. According to the Global Innovation Policy Center’s (GIPC) 2018 International IP Index, China ranks 25^th out of 50 countries in the study with regard to strong IP systems. So while China’s IP system may not be the weakest in the world, the size of its economy in conjunction with its lack of strong IP protections and enforcement means it is a major threat to U.S. creators and innovators.

IP-intensive industries comprised over 38% of the entire U.S. economy in 2014, equating to $6.6 trillion. And IP-intensive industries directly accounted for 27.9 million jobs and indirectly accounted for 17.6 million jobs, totaling 45.5 million jobs or about 30% of all U.S. employment in 2014. Therefore, when IP rights are violated in the U.S. or abroad, it stifles innovation and job-growth throughout the economy.

As FSF Senior Fellow Ted Bolema discussed in a Perspectives from FSF Scholars, “Why Economists Consistently Support Free Trade Policies,” free trade policies lead to higher paying jobs and lower prices. Protectionist policies, like tariffs and trade wars, ultimately harm consumers and entrepreneurs in both China and the United States and likely harm other countries because investment and innovation are hindered.

The best way to address violations of IP rights in China is through diplomatic efforts, like the adoption of a new free trade agreement creating robust IP protections in China. Hopefully, China will adopt IP protections that are similar to those in the United States, the global leader according to GIPC’s 2018 International IP Index. Then, consumers and entrepreneurs in both countries will benefit from mutual gains from trade and legitimate economic activity.

The U.S.-China Joint Commission on Commerce and Trade (JCCT) is a high-level dialogue on bilateral trade issues between the United States and China, dealing extensively with strengthening IP rights protections in both countries and fostering innovation. Also, the U.S.-China IP Cooperation Dialogue is a group of professionals from both countries who meet to discuss how IP systems can be improved to spur innovation and economic activity between the two countries. The common theme of both of these groups is that China’s IP rights protections can be improved in three main areas: reducing the amount of bad-faith trademarks, combatting online piracy, and decreasing theft of trade secrets.

Bad-faith trademarks are trademarks that are meant to look similar to popular brands and confuse consumers into buying seemingly familiar products. According to GIPC’s Index, China’s trademark law “provides limited criteria for obtaining design protection and no substantive review takes place, leading to many low-value patents and a high rate of invalidations.” China should combat the pervasive problem of bad-faith trademarks by strictly filtering trademark applications. On a positive note, the establishment of China’s IP courts in 2014 has already created a strong precedent on bad-faith trademarks when it found that the Chinese retail sports chain Qiaodan had violated Michael Jordan’s naming rights. Hopefully, this precedent will deter bad-faith trademarks from emerging in the future.

With regard to online piracy, China should adopt e-commerce-related legislation to strengthen the supervision and enforcement of online piracy and counterfeiting. China must continue to provide more licensing opportunities for Internet companies in the music and movie industries, which should discourage piracy by increasing access to legal content. Also, improving the patentability of software by allowing applicants to file partial design claims and extending the grace period that precedes the patent application should reduce rampant software piracy in China by encouraging competition and ultimately lowering prices.

Theft of trade secrets is defined as stealing, misappropriating, or receiving such secrets with intent to convert the trade secret into an economic benefit for anyone other than the rights holder. Although China recently amended its Anti-Unfair Competition Law to shift the burden of proof to the accused infringer for many trade secrets cases, this action does not address the issue sufficiently. The amended law likely will lead to a “one-size-fits-all” enforcement approach that may not be suitable for all types of trade secrets. Instead, China must adopt trade secret legislation which should include steps to assist rights holders in seeking preliminary injunctions and include evidence and asset preservation measures under China’s Civil Procedure Law. Also, China can do more to engage the public about trade secrets protection and streamline its processes for providing trade secrets licensing.

Instead of igniting a trade war, President Trump should welcome free trade with China. With the adoption of a new bilateral free trade agreement (or multilateral if other countries choose to participate), the United States could address the concerns regarding bad-faith trademarks, online piracy, and theft of trade secrets by establishing an IP chapter that creates strong IP rights protections in China. This would spur trade between the two countries even more because a strong IP system in China would encourage additional innovation and economic activity.

The United States Should Not Nationalize 5G

On Tuesday, Brad Parscale, President Trump's Campaign Manager for his 2020 reelection campaign, tweeted in favor of a nationalized 5G network:

It is time for America to have a single 5G network for all carriers. The days of dropped calls, slow speeds, and no service need to end. It is time for the U.S. to have the world’s best cell service.

— Brad Parscale (@parscale) June 5, 2018

FSF scholars have contended that the most efficient way to deploy a nationwide broadband network is through facilities-based competition, where multiple providers are building infrastructure and offering next-generation broadband services over the last mile. With facilities-based competition, providers constantly are competing to upgrade their networks and to deploy broadband in underserved areas. With a nationalized 5G network, even if multiple providers are offering services, consumers would be stuck with a failing broadband network because there is no incentive for providers to invest in technological improvements when they do not own the network.

In January 2018, FCC Chairman Ajit Pai announced his opposition to a nationalized 5G network:

I oppose any proposal for the federal government to build and operate a nationwide 5G network. The main lesson to draw from the wireless sector’s development over the past three decades—including American leadership in 4G—is that the market, not government, is best positioned to drive innovation and investment. What government can and should do is to push spectrum into the commercial marketplace and set rules that encourage the private sector to develop and deploy next-generation infrastructure. Any federal effort to construct a nationalized 5G network would be a costly and counterproductive distraction from the policies we need to help the United States win the 5G future. 

Economists Continue to Support Free Trade Policies

Earlier this week, the Free State Foundation published a new Perspectives from FSF Scholars by Senior Fellow Ted Bolema titled “Why Economists Consistently Support Free Trade Policies.” In the paper, Ted Bolema discusses how free trade policies promote economic growth, higher wages, and increased innovation in the economy.

Today, the National Taxpayers Union sent an open letter to President Donald Trump and members of Congress urging them to reject protectionist policies, such as tariffs and withdrawing from trade agreements. This is a response to President Trump’s decision to impose costly tariffs on certain goods and to withdraw from the Trans-Pacific Partnership. The letter was signed by more than 1,100 economists throughout the United States, including three members of FSF’s Board of Academic Advisors - Michelle Connolly, Stan Liebowitz, and James Prieger.

Free State Foundation scholars have maintained the position that bilateral and multilateral free trade agreements create innovation and economic growth, and strong protections of intellectual property rights implemented in those agreements encourage creation throughout the global economy. Make sure you read Ted Bolema’s new paper!

Presidential Memorandum Addresses China’s IP Theft and Forced Technology Transfer Practices

On March 22, President Trump signed a “Presidential Memorandum on the Actions by the United States Related to the Section 301 Investigation.” The Memorandum explains that the U.S. Trade Representative’s Section 301 investigation into China’s practices involving IP theft and forced technology transfers supports four findings:

First, China uses foreign ownership restrictions, including joint venture requirements, equity limitations, and other investment restrictions, to require or pressure technology transfer from U.S. companies to Chinese entities.  China also uses administrative review and licensing procedures to require or pressure technology transfer, which, inter alia, undermines the value of U.S. investments and technology and weakens the global competitiveness of U.S. firms. 

Second, China imposes substantial restrictions on, and intervenes in, U.S. firms’ investments and activities, including through restrictions on technology licensing terms.  These restrictions deprive U.S. technology owners of the ability to bargain and set market-based terms for technology transfer.  As a result, U.S. companies seeking to license technologies must do so on terms that unfairly favor Chinese recipients. 

Third, China directs and facilitates the systematic investment in, and acquisition of, U.S. companies and assets by Chinese companies to obtain cutting-edge technologies and intellectual property and to generate large-scale technology transfer in industries deemed important by Chinese government industrial plans. 

Fourth, China conducts and supports unauthorized intrusions into, and theft from, the computer networks of U.S. companies.  These actions provide the Chinese government with unauthorized access to intellectual property, trade secrets, or confidential business information, including technical data, negotiating positions, and sensitive and proprietary internal business communications, and they also support China’s strategic development goals, including its science and technology advancement, military modernization, and economic development.

The Presidential Memorandum directs the Trade Representative to take action to address unreasonable or discriminatory practices by China that burden or restrict U.S. Commerce. Such actions include consideration of “increased tariffs on goods from China” and pursuit of “dispute settlement in the World Trade Organization (WTO) to address China’s discriminatory licensing practices.” President Trump’s Memorandum also calls for possible imposition of investment restrictions, requiring the Secretary of Treasury to propose ways “to address concerns about investment in the United States directed or facilitated by China in industries or technologies deemed important to the United States.”

A succinct overview of the Presidential Memorandum regarding Chinese-related IP theft and forced technology transfer practices as well as timeframes for implementing responsive restrictions is provided by Sarah Westwood’s March 22 article in the Washington Examiner.

FCC Chairman Ajit Pai Opposes a Nationalized 5G Network

On Sunday, Axios reported that members of President Donald Trump’s National Security Council are considering nationalizing America’s 5G wireless networks. The documents released by Axios outline a plan in which the federal government would build and pay for a single 5G network in response to China's "dominant position in the manufacture and operation of network infrastructure.” The documents make it clear that this proposal is designed to protect the United States from China and other bad actors.

FCC Chairman Ajit Pai quickly announced his opposition to the proposal:

I oppose any proposal for the federal government to build and operate a nationwide 5G network. The main lesson to draw from the wireless sector’s development over the past three decades—including American leadership in 4G—is that the market, not government, is best positioned to drive innovation and investment. What government can and should do is to push spectrum into the commercial marketplace and set rules that encourage the private sector to develop and deploy next-generation infrastructure. Any federal effort to construct a nationalized 5G network would be a costly and counterproductive distraction from the policies we need to help the United States win the 5G future. 

President Trump Issues Executive Order to Streamline Rural Broadband Deployment

On January 8, 2018, President Donald Trump issued an Executive Order on “streamlining and expediting requests to locate broadband facilities in rural America.” Specifically, the Executive Order will require Federal property managing agencies to evaluate the effectiveness of the General Services Administration’s (GSA) Common Form Application. This application was created to enable Federal agencies to process wireless facility siting requests more efficiently and provide information about the availability of locations for wireless broadband deployment. Additionally, all Federal property managing agencies will be required to report to the GSA on a quarterly basis information about the number of applications received, approved, and rejected.

President Trump said that streaming federal requests for broadband deployment should “reduce barriers to capital investment, remove obstacles to broadband services,” and “accelerate the deployment and adoption of affordable, reliable, modern high-speed broadband connectivity in rural America.”

President Trump Signs Two Executive Orders to Promote Rural Broadband

President Trump has signed two new executive orders intended to reduce regulatory barriers to broadband investment in rural areas, which he said would “provide broader, faster and better” Internet coverage. 

The first executive order was aimed at streamlining and expediting requests to locate broadband facilities on federal lands. In it, President Trump directed the General Services Administration to complete a review of the forms and application process within 180 days. After the evaluation is completed, the order directs the GSA to implement appropriate revisions. The order also requires that all Federal property managing agencies use the GSA Common Form Application for requests to locate broadband facilities on Federal property, and that each agency prepare quarterly reports to GSA on the agency’s use of the common form application.

The second order directs the Department of Interior to “develop a plan to support rural broadband development and adoption by increasing access to tower facilities and other infrastructure assets managed by the Department of the Interior.” DOI is further directed to draft model terms and conditions for use of the towers and other infrastructure assets for broadband deployment, and to provide a status report on its progress in 180 days.

President Trump announced the executive orders at an appearance before the American Farm Bureau Federation in Nashville, Tennessee on January 8, 2018. During the announcement, President Trump said: “Those towers are going to go up, and you’re going to have great, great broadband.” 

President Trump Nominates Jessica Rosenworcel as FCC Commissioner

Earlier this week, President Trump nominated former FCC Commissioner Jessica Rosenworcel to return to the Commission to fill an open Democratic seat. Having served as a Commissioner from 2012 to January 2017, it is likely she will be confirmed.

With a current 2-1 Republican majority at the Commission, it is important that there be a full cohort of Commissioners to satisfy the 3-2 majority. Ms. Rosenworcel's nomination is a step in that direction, but President Trump should soon nominate a Republican Commissioner to fill the last open seat, assuming Ms. Rosenworcel is confirmed.

Maryland’s Broadband Privacy Bill Was a Solution in Search of Problem

On April 4, 2017, the Maryland State Senate allowed for the late introduction of the Internet Consumer Privacy Rights Act of 2017. The bill was introduced just days before the legislative session ended, purportedly as a response to President Trump signing the repeal of the Federal Communications Commission’s (FCC) unnecessary and overly burdensome Broadband Privacy Order. The Maryland bill showed that Maryland policymakers misunderstand how Internet service providers (ISPs) and edge providers, like Google and Facebook, use the advertising business model to offer innovative and consumer-friendly services.

Fortunately, the bill went nowhere during the legislative session. Nevertheless, because it was introduced, it’s worth examining why the effort was misguided.

Consumers expect consistent, common sense rules throughout the entire Internet ecosystem. Had the FCC’s broadband privacy regulations gone into effect, there would have been asymmetric privacy regulations between ISPs and edge providers, like Google. The FCC’s Broadband Privacy Order would have enabled Google and Facebook, which currently dominate over 60% of the online advertising market, to capture an even larger share of the market by creating additional privacy regulations for only ISPs. One Maryland Senator called the repeal of the Broadband Privacy Order an “emergency.” But the status quo regarding broadband privacy did not change with the repeal because the FCC’s rules never actually went into effect. And given that ISPs only have access to 30% of consumer data, it was not an emergency before the FCC adopted the Broadband Privacy Order, and it is not an emergency now that Congress and President Trump have repealed those unnecessary regulations.

The Maryland bill would have banned ISPs in Maryland from displaying “certain advertisements to a consumer” and refusing “to provide services to a consumer because the consumer refuses to take a certain action.” In an August 2016 Perspective from FSF Scholars entitled “FCC Privacy Rules Would Harm Consumers by Creating Barriers for ISP Advertising,” I explained how ISPs and edge providers use the advertising business model as a means of offering, without charge, innovative services to consumers.

ISPs cannot offer free data and sponsored data services and businesses often cannot offer public WiFi without ISPs collecting consumer data. The advertising revenue that ISPs generate from these services is the incentive they have to offer free services and content. Maryland’s bill would have banned ISPs from refusing to offer services and content to consumers who choose not to share their consumer information, which, literally, is the business model that enables consumers to enjoy free services. Had the Maryland legislation been adopted, ISPs may well have stopped offering free data services and businesses might well have stopped offering public WiFi to any consumers in Maryland, because the law would have heavily restricted ISPs from delivering targeted advertising.

Many practical questions would have arisen about the enforcement of these rules because the Internet economy does not end at state borders. What makes the relationship between a consumer and an ISP a Maryland or state-level issue? If a person has a home address in Maryland but accesses the Internet elsewhere, do the rules apply to that individual? If a Maryland resident travels to Virginia or Pennsylvania and uses his or her mobile device, do the rules no longer apply? If ISPs refused to offer innovative services to Maryland consumers because of these burdensome regulations, this may have pushed residents and businesses into neighboring states where they could connect to free data services and offer public WiFi with tailored advertising.

In a March 2017 Perspectives from FSF Scholars entitled “The Right Way to Protect Privacy Throughout the Internet Ecosystem,” Daniel Lyons, a member of FSF’s Board of Academic Advisors, discussed how, in the short term, the FCC should enact privacy rules that mirror existing Federal Trade Commission (FTC) practices, adjudicating privacy matters on a case-by-case basis. And in the long run, he says that repealing the Title II common carrier classification in the FCC’s Open Internet Order would “return privacy jurisdiction back to the FTC, where it belongs.”

Thankfully, the Maryland privacy bill died a quick death. That’s the right result for Maryland residents and businesses who value the availability of innovative Internet services, along with information they want without charge.