Nebraska Is State 17 to Pass Privacy Law; House Holds Hearing on APRA

In a recent Perspectives from FSF Scholars summarizing the American Privacy Rights Act (APRA) Discussion Draft, I added New Hampshire (number fifteen) and Kentucky (number sixteen) to the Free State Foundation's running list of states that have passed a comprehensive data privacy statute. The Cornhusker State in the interim has joined their ranks, upping that total to seventeen. Meanwhile, at a House Commerce Committee hearing on the APRA, more than one representative indicated that they are "fired up" (subscription required) to turn that bill into preempting federal law.

New Jersey was the first state in 2024 (and the fourteenth overall) to enact privacy legislation, a development I noted in a January post to the FSF Blog. The New Hampshire Privacy Act followed in March, the Kentucky Consumer Data Protection Act in early April. (Two days later the Maryland Online Data Privacy Act of 2024, about which I blogged here and here, cleared both legislative houses. Should it be signed by Governor Wes Moore, it will bring the tally to eighteen. That is, assuming another state – Pennsylvania, perhaps? – doesn't beat it to the punch.)

And on April 12, Governor Jim Pillen enacted the Nebraska Data Privacy Act, a statute very similar in substance to the Texas Data Privacy and Security Act, a bill that I summarized in July 2023's aptly titled "More States Compound the Dreaded Privacy 'Patchwork' Problem."

Of course, one of the aspects of the APRA Discussion Draft that I praised in "Congressional Leaders Return Privacy to the Front Burner," the Perspectives referenced above, is its language preempting state comprehensive data privacy laws: "no State or political subdivision thereof may adopt, maintain, enforce, or continue in effect any law, regulation, rule, or requirement covered by the provisions of this Act or a rule, regulation, or requirement promulgated under this Act."

As such, passage of the APRA – by no means a foregone conclusion – would eliminate the chaos and compliance contradictions created by the expanding number of state laws.

At an April 17 hearing held by the House Commerce Committee's Subcommittee on Innovation, Data, and Commerce, APRA co-author and Committee Chair Cathy McMorris Rodgers (R-WA) acknowledged that "Congress has been trying to develop and pass comprehensive data privacy and security legislation for decades" and argued that "[w]ith the American Privacy Rights Act, we are at a unique moment in history where we finally have the opportunity to imagine the internet as a force for prosperity and good."

In response, Subcommittee Chair Gus Bilirakis (R-FL) reportedly stated that he is "fired up" – and Representative Frank Pallone (D-NJ) indicated that he is "fired up too."

Bill Would Require FCC to Consider Big Tech Contributions to Universal Service Fund

On July 21, three Republican members of the Senate Commerce Committee announced the introduction of legislation that could revitalize the Universal Service Fund (USF) via contributions from so-called edge providers such as YouTube, Netflix, and Google.

With the Funding Affordable Internet with Reliable (FAIR) Contributions Act, Senator Roger Wicker (MS), ranking committee member, along with Senators Shelley Moore Capito (WV) and Todd Young (IN), would have the FCC consider the viability of an approach first articulated by Commissioner Brendan Carr in a May 2021 Newsweek op-ed.

As Mr. Carr explained, the USF's reliance upon steadily decreasing "telecommunications" revenues, through a monthly tax on bills for traditional voice offerings, is "now hopelessly outdated" and "on the verge of collapse."

The facts bear this out. Once below 6 percent, the USF contribution factor (that is, the rate at which consumers are taxed) surpassed 30 percent for the first time shortly before Mr. Carr wrote his op-ed. Not long thereafter, it rose even higher – 33.4 percent – for the second quarter of 2021. The proposed contribution factor for the third quarter of 2021 did dip slightly, but only back to the first-quarter level that gave Mr. Carr pause: 31.8 percent.

The reason the contribution factor continues to rise is no mystery. Consumers today use traditional telecommunications services far less – and Internet-based offerings far more. Rather than continuing to ratchet up the burden on the former, Mr. Carr instead proposed that "[w]e should start requiring Big Tech to pay its fair share."

Simply put, the anachronistic and unsustainable USF mechanism regressively taxes the dwindling user base of "telecommunications" services in large part to subsidize high-speed Internet service in high-cost areas. Edge providers utilize broadband infrastructure to generate billions and billions of dollars in revenues — without any obligation to help pay to close remaining digital divides.

In the words of Mr. Carr, "Big Tech has been enjoying a free ride on our internet infrastructure while skipping out on the billions of dollars in costs needed to maintain and build that network…. It is time to end this sweetheart deal. Big Tech should stop passing its costs onto the American people."

In a series of tweets at the time, FSF President Randolph May argued that Mr. Carr "makes a persuasive case" and that his "proposal deserves serious consideration."

More recently, Justin (Gus) Hurwitz, a member of the Free State Foundation's Board of Academic Advisors, asserted that, in the context of the ongoing congressional infrastructure funding debate, "[be]fore we decide how much to spend on [universal service] we should discuss, as Commissioner Carr rightly suggests, who should pay for [it]."

Senators Wicker, Capito, and Young clearly agree.

The FAIR Contributions Act, among other things, would require the FCC to:

• Seek input from the public "on the feasibility of collecting USF contributions from internet edge providers" and prepare, within 180 days, a report detailing its conclusions;
• Consider possible revenue sources;
• Evaluate the fairness of both the current system and one in which Big Tech contributes;
• Determine the feasibility of requiring such contributions;
• Estimate the impact on Tribal, low-income, and elderly populations; and
• Identify any statutory changes that may be required.

Ohio Legislators Introduce the Latest Comprehensive State Data Privacy Bill

The data privacy legal landscape grows steadily more complicated as more states take steps to occupy the void created by the absence of a much-needed federal statute.

Just last week, I noted in a post to the Free State Foundation's blog that Colorado had become the third state, after California and Virginia, to adopt comprehensive data privacy legislation. (Please click here and here for Perspectives from FSF Scholars addressing the two laws passed in California and here for a blog post describing the Virginia Consumer Data Protection Act.)

And now it appears that Ohio could be next.

Introduced on July 12, the Ohio Personal Privacy Act (OPPA) is a product of Governor Mike DeWine's InnovateOhio technology initiative, which is led by Lieutenant Governor Jon Husted.

Considered in isolation, the OPPA includes a number of relatively palatable provisions. Indeed, commenters have characterized the OPPA as a bill "that would impose fewer restrictions on businesses" and "more limited in scope than other state data protection laws that recently have been enacted."

Most notably, the OPPA expressly rejects a private right of action: "Any violation of this chapter shall not serve as the basis for, or be subject to, a private right of action, including a class action lawsuit, under this chapter or under any other law." The Ohio Attorney General's Office would have "exclusive authority" to enforce the OPPA.

It also would (1) provide businesses with a 30-day opportunity to cure alleged violations, and (2) create an affirmative defense to liability for any business that "creates, maintains, and complies with a written privacy program that reasonably conforms to" the Privacy Framework promulgated by the National Institute of Standards and Technology (NIST).

With some exceptions, the OPPA generally would cover those businesses that (1) earn at least $25 million in gross annual revenues within Ohio, (2) control or process the personal information of at least 100,000 consumers, or (3) derive more than half of their gross revenues from the sale of data and process/control the data of at least 25,000 consumers.

Businesses would be required to make available "a reasonably accessible, clear, and conspicuously posted privacy policy" that, among other things, details (1) the categories of personal information processed, and (2) the reasons for collecting or selling that data.

Where a business seeks to make a material change to its privacy policy, it would have the option to (1) obtain prior affirmative consent from affected consumers or (2) provide them with notice and "a reasonable means to opt out."

The OPPA would empower consumers in a number of ways, such as by establishing a right to know what personal information is collected, a right to request a copy of that information once during a twelve-month period, a right to demand that that data be deleted, and a right to prohibit its sale.

As Carrie Kuroc, deputy director of InnovateOhio, recently explained, "[o]ur goal isn't to copy, we want to lead. We wanted to craft privacy legislation that other states and the federal government can use as a model."

The big-picture problem with that goal, of course, is that the passage of yet another unique state law, regardless of the particulars of its approach, would serve to further confuse consumers as to their rights and exacerbate the compliance challenge for businesses.

The only solution to this increasingly complicated legal scenario is a comprehensive federal data privacy statute. Specifically, one that requires adequate consumer disclosures, establishes reasonable individual rights, embraces an "opt out" approach for non-sensitive personal information, treats all businesses equally, preempts state laws, and rejects a private right of action in favor of exclusive FTC enforcement.

In a July 16 letter to President Biden, four Republican lawmakers – Senators Roger Wicker (MS) and Marsha Blackburn (TN) and Representatives Cathy McMorris Rodgers (WA) and Gus Bilirakis (FL) – "urge[d him] to prioritize comprehensive data privacy legislation as part of [his] Administration's agenda."

Exhibit C(O) in the Case for a Federal Data Privacy Law: The Colorado Privacy Act

Colorado became the third state to enact comprehensive data privacy legislation when, on July 8, 2021, Governor Jared Polis signed the Colorado Privacy Act (CPA). With the passage of each new state law the rights of consumers become more uncertain, the compliance challenges for businesses become more complicated, and the urgent need for a preemptive federal statute becomes even more pronounced.

California was the first state to occupy the void created by congressional inaction, Virginia the second.

In fact, two comprehensive data privacy proposals have become law in California: (1) the state legislature in 2018 passed the California Consumer Privacy Act (CCPA), which I described in "California's Heavy-Handed Approach to Protecting Consumer Privacy: Exhibit A in the Case for Federal Preemption," an October 2019 Perspectives from FSF Scholars, and (2) voters in last year's election approved the California Privacy Rights Act, which I discussed in a November 2020 Perspectives.

The Virginia Consumer Data Protection Act (VCDPA), meanwhile, became law in March 2021. I summarized its provisions in a February 2021 post to the FSF Blog.

Prior to the VCDPA's passage (it goes into effect on January 1, 2023), the CCPA as a practical matter assumed the role of a national privacy standard, as many businesses determined that it is easier to comply with the CCPA's requirements throughout the country than to try to separate out, and treat differently, California residents. But once Virginia Governor Ralph Northam signed the VCDPA, which is similar but by no means identical to the CCPA, the compliance headache for businesses expanded exponentially.

As I explained in March 2021's "Inconsistent State Data Privacy Laws Increase Confusion and Costs," as more states embark on their own, unique paths, businesses are forced to choose between two problematic options: (1) developing and implementing multiple state-specific compliance regimes, an endeavor fraught with risk given that, as a technical matter, Internet traffic knows no borders, or (2) aggregating the most onerous obligations set forth in the growing number of state laws and abiding by that evolving "worst of" collection nationwide.

The passage of the CPA, which I detailed in an April 2021 FSF Blog post and which goes into effect on July 1, 2023, further exacerbates that situation.

The remedy, of course, is a federal data privacy regime that preempts state laws.

In that regard, I note that President Biden's July 9, 2021, "Executive Order on Promoting Competition in the American Economy" urges the FTC to consider adopting rules addressing unfair data collection:

To address persistent and recurrent practices that inhibit competition, the Chair of the FTC, in the Chair's discretion, is also encouraged to consider working with the rest of the Commission to exercise the FTC's statutory rulemaking authority, as appropriate and consistent with applicable law, in areas such as … unfair data collection and surveillance practices that may damage competition, consumer autonomy, and consumer privacy.

FTC Commissioner Christine Wilson (R), who spoke about data privacy at both the 2021 and 2020 (video) Free State Foundation Annual Telecom Policy Conferences, last month indicated that, given the failure of Congress to act and the proliferation of inconsistent state laws, she has "reluctantly come to consider whether we should begin a privacy rulemaking proceeding at the Federal Trade Commission."

Federal legislation, however, is the preferred path forward. More to the point, what is needed is a comprehensive data privacy statute that preempts state laws, treats all businesses with access to personal information the same, provides consumers with adequate disclosures and allows them to "opt out" of the use of their non-sensitive data, empowers the FTC with exclusive enforcement authority, and rejects a private right of action.

Unfortunately, press reports indicate that congressional activity on privacy once again has "stalled." Might the silver lining to the CPA's passage be the additional pressure needed to reignite those efforts?

Time will tell.

FSF President Randolph May Moderates Federalist Society Teleforum on Broadband Featuring Commissioner Carr

On June 15, Free State Foundation President Randolph J. May moderated a teleforum hosted by The Federalist Society featuring FCC Commissioner Brendan Carr.

Their conversation touched on a wide range of topics, including broadband infrastructure, legislative and regulatory efforts to close remaining digital divides, and Commissioner Carr's thought-provoking proposal to require that Big Tech companies contribute their fair share to government broadband subsidy programs.

Audio versions of "Closing the Digital Divide: The Future of Broadband Access" are available here.

Rep. Butterfield Reintroduces Legislation to Eliminate "Eligible Telecommunications Carrier" Requirement for Universal Service Fund Recipients

On June 7, FCC Acting Chairwoman Jessica Rosenworcel announced that over 2.3 million households had enrolled in the Emergency Broadband Benefit Program (EBB) since its launch on May 12.

As I detailed in a December 2020 post to the Free State Foundation's blog, Congress appropriated $3.2 billion to fund the EBB, an FCC-administered program providing eligible households with discounts on monthly high-speed Internet access service and connected devices. By design, however, the EBB is limited in scope: it will end six months after the end of the COVID-19 public health emergency or when the money runs out, whichever comes first.

In a February 2021 Perspectives from FSF Scholars, I argued that the EBB potentially might serve as a model for future Lifeline funding. One major reason why: Congress made explicit that a provider need not be designated as an Eligible Telecommunications Carrier (ETC) in order to participate.

The EBB currently includes more than 1,000 providers, ETCs and non-ETCs alike. Those in the latter group had to jump through additional hoops, but in the Report and Order establishing the EBB, the Commission, to its credit, did adopt processes to ensure that non-ETCs "that … submitted complete applications by the priority application deadline will know prior to the start date of the EBB Program if they are eligible to participate." That mitigated the possibility that, at least in this specific instance, ETCs might enjoy an unfair advantage over their non-ETC rivals.

On May 20, Rep. G.K. Butterfield (D NC) reintroduced the Expanding Opportunities for Broadband Deployment Act. In "The ETC Requirement for Accessing Broadband Funds Should Be Eliminated," a June 2020 Perspectives, I applauded the 2020 iteration of this legislation, which would have eliminated altogether the statutory requirement that a provider be designated as an ETC by a state regulatory agency or the FCC prior to participating in Universal Service Fund programs. (The text of the 2021 version, H.R. 3376, is not yet available.)

Passage of H.R. 3376 would benefit consumers by expanding the pool of providers that participate in subsidy programs like the $20.4 billion Rural Digital Opportunity Fund and the $9 billion 5G for Rural America Fund.

Republican Senators' $568B Infrastructure Proposal Includes $65B for Broadband

A group of five Republican Senators has released a $568 billion infrastructure framework in response the $2 trillion American Jobs Plan announced by President Biden.

Those lawmakers are Roger Wicker (MS), Ranking Member of the Commerce, Science, and Transportation Committee; Shelley Moore Capito (WV), Ranking Member of the Environment and Public Works Committee; Pat Toomey (PA), Ranking Member of the Banking, Housing, and Urban Affairs Committee; Mike Crapo (ID), Ranking Member of the Finance Committee; and John Barrasso (WY), Ranking Member of the Energy and Natural Resources Committee.

The Biden Plan, one aspect of which I discussed in a recent post to the FSF Blog, would make $100 billion available for broadband-related projects and would "prioritize[] support for broadband networks owned, operated by, or affiliated with local governments, non-profits, and co-operatives."

The Republican counter-proposal, by contrast, would allocate $65 billion out of the $81 billion generated by the recent C-band auction for new spending by the FCC and NTIA.

Be on the lookout in the coming days and weeks for additional commentary from Free State Foundation scholars on broadband spending proposals.

"Future Proofing" Subsidized Broadband Would Inflate Consumer Prices

The Biden Administration's American Jobs Plan (the Plan) would allocate a substantial amount of taxpayer money – $100 billion – to address broadband accessibility and affordability. The limited details we know at this point, however, suggest strongly that the overly ambitious Plan could lead to waste and, contrary to its stated goal, higher, not lower, prices.

There is much to critique about the Plan, but for now I want to limit my focus on the inescapable tension that exists between two of its primary priorities. The Fact Sheet released by the White House makes the following interrelated assertions:

• "The President's plan prioritizes building 'future proof' broadband infrastructure …."
• "Americans pay too much for the internet – much more than people in many other countries – and the President is committed to working with Congress to find a solution to reduce internet prices for all Americans, …."

Simply put, you can't have it both ways. The notion of "future proofing" suggests building "gold-plated" infrastructure that delivers more than what consumers need – and costs more than what they want to spend. And price regulation, the process hinted at in the second quote above and by which the government would dictate how much providers may charge, based upon its best educated guess as to what actual costs and an acceptable rate of return might be, wouldn't eliminate that problem – it simply would incorporate those additional costs into the calculation.

At this point, we cannot know with any certainty what the White House means when it says it wants to "'future proof' broadband infrastructure." However, press reports emphasize that the Accessible, Affordable Internet for All Act would appropriate $80 billion for infrastructure delivering gigabit speeds both upstream and downstream and the Leading Infrastructure for Tomorrow’s America (LIFT America) Act "would raise the FCC's current threshold definition of served areas from 25 Mbps download and 3 Mbps upload minimum to 25/25 symmetrical speed for low-tier service and 100/100 Mbps symmetrical for mid-tier service."

As Former FCC Commissioner Michael O'Rielly stated during recent testimony to the House Energy and Commerce Committee, "the push for symmetrical speeds at exorbitant levels, such as 100/100 megabits per second (Mbps), makes little sense" and "[a] 100-megabit upload speed does not reflect reality for now or any time soon."

And as Joan Marsh, AT&T Executive President of Federal Regulatory Relations, explained in a March 26, 2021, blog post, while 5G networks "easily" can deliver 100 Mbps downloads, "wireless networks are not built to deliver symmetrical speeds" and "adopting a symmetrical standard could result in overbuilding existing services today, including existing asymmetrical services that are currently meeting modern connectivity needs."

The private sector has spent nearly $2 trillion to provide broadband wherever it is economically feasible: that is, where – despite substantial uncertainty – there is at least a reasonable expectation of a return on that investment. Providers rely upon a range of technologies to connect homes: fiber to the home (FTTH), DOCSIS® cable modem service over hybrid fiber-coaxial (HFC) networks, Digital Subscriber Line (DSL) offerings over twisted-copper pairs, 4G/LTE and 5G mobile broadband, fixed wireless operating in both licensed and unlicensed spectrum, and satellite. In some instances, the chosen modality is suited best to the specific geographic and population characteristics of the area to be served. In others, enterprising businesses are rolling the dice – and taking the risk – on a competitive alternative.

The FCC's current definition of "broadband" – 25/3 Mbps – is sufficiently broad to encompass this wide range of network technologies. It also responds to the throughput needs of consumers, fosters intermodal competition, and maximizes the number of eligible bidders in reverse auctions for receipt of government subsidies, such as the $20.4 billion Rural Digital Opportunity Fund and the $9 billion 5G Fund for Rural America – two existing programs whose impact on closing remaining digital divides is not yet known, as Commissioner Brendan Carr emphasized in a recent op-ed.

In sum, the threshold established by the expert agency unleashes the most efficient investment and innovation mechanism – competitive forces – to drive down prices, expand access, and provide the speeds that consumers demand.

By contrast, in the name of "future proofing," the Plan would ratchet up the definition of "broadband" in a way that would increase inappropriately the costs of connecting unserved areas, incentivize providers able to meet that definition to replace existing facilities with "gold-plated" infrastructure rather than focus on expanding the reach of their networks, and render many viable distribution technologies ineligible to receive government subsidies simply due to their inability to deliver upstream speeds far exceeding the needs of consumers both today and in the foreseeable future.

The resulting wasteful overinvestment and suppression of competition would drive prices up, not down. And the specter of price regulation is no panacea. To the contrary, it would incorporate those additional costs into the government-established price – while at the same time serving to disincentivize investment and innovation.

Congresswoman DelBene Reintroduces Federal Data Privacy Bill

Representative Suzan DelBene (D WA) has reintroduced the Information Transparency and Personal Data Control Act, federal privacy legislation she originally proposed, in a slightly modified form, in 2019.

The Information Transparency and Personal Data Control Act (ITPDCA) appears to be the first comprehensive data privacy bill introduced during the current legislative session.

Regarding the primary two issues upon which (1) lawmakers so far have been unable to reach agreement, and (2) I have written extensively for the Free State Foundation, it embraces what I consider to be the correct positions: it preempts state laws (with the exception of those addressing data-breach notifications, biometric information, wiretapping, and public records) and does not allow for a private right of action.

Instead, enforcement would be the responsibility of the FTC and, in the event that the FTC does not act, state attorneys general. However, state attorneys general would be required to provide covered businesses with thirty days to cure before commencing an action.

Unlike the California Consumer Privacy Act or the Virginia Consumer Data Protection Act, the ITPDCA would not grant consumers the right to access, correct, or delete personal information. However, It would require covered businesses to:

• Make available "plain language" privacy policies;
• Allow consumers to opt out at any time from the "collection, transmission, storage, processing, selling, sharing or other use of non-sensitive personal information"; and
• Obtain opt-in consent for the use of sensitive personal information to the extent that that use is not described in the privacy policy of the covered business.

The ITPDCA also would empower the FTC to impose fines for first-time offenses, increase its ability to adopt rules, expand its authority to cover common carriers, increase its funding by $350 million, and allow it to hire 500 new full-time employees.

In "Inconsistent State Data Privacy Laws Increase Confusion and Costs," a March 2021 Perspectives from FSF Scholars, I sounded the alarm regarding the compliance burdens and consumer uncertainty that will result should Congress fail to establish a federal data privacy regime that preempts the growing number of state laws.

To date we have witnessed two states fill the void that exists at the national level: California (with both the CCPA, currently in effect, and the California Privacy Rights Act, approved by voters in November) and Virginia. Other states where legislation has been introduced include Florida, Minnesota, New York, Oklahoma, Washington State, and, most recently, Colorado.

FCC Seeks Input on COVID-19 Broadband Discount Program

As I noted in a recent post to the FSF Blog, the $900 billion COVID-19 relief package recently signed into law as part of the Consolidated Appropriations Act, 2021 includes $3.2 billion for an FCC-run Emergency Broadband Benefit Program (the Program).

The Program will reimburse participating broadband Internet service providers (ISPs) that offer discounts to eligible low-income households and those that have experienced financial hardship during the current public health crisis. The maximum amount of the discount on the standard rate is $50/month ($75/month on Tribal lands).

In addition, ISPs can receive a one-time payment, up to $100, for making available a subsidized connected device (tablet, laptop, or desktop).

The Program will run until six months after the end of the pandemic or the $3.2 billion in funding has been depleted, whichever comes first.

On January 4, 2021, the Commission publicized the release by the Wireline Competition Bureau of a Public Notice seeking comment on how best to administer the Program. It seeks input on a number of topics, including ISP, household, service, and device eligibility; expedited approval of ISP applications; the reimbursement process; awareness promotion; and auditing, enforcement, and reporting requirements.

Comments are due on January 25 and reply comments on February 16.

A Primer: The COVID Relief Bill's Broadband Funding Provisions

The 900 billion COVID relief and government funding bill passed by the House and Senate and now signed by President Trump includes nearly $7 billion for broadband-related initiatives. On the whole, the broadband funding provisions will promote more ubiquitous deployment of secure high-speed broadband services, especially to geographic areas and to individuals where access currently lags.

Areas of focus include an emergency discount on broadband Internet access service for low-income and economically impacted households, funding to "rip and replace" insecure communications network equipment, broadband deployment grants for Tribal lands and unserved areas, additional money for telehealth, and much-needed funds for updated broadband coverage maps, a topic of recent focus by the Free State Foundation.

Here's a recap of the broadband provisions.

In order to limit the allocation of scarce government resources to those areas in fact unserved, accurate broadband coverage maps are essential. Congress and the FCC are in agreement that currently available maps are not up to the task, and both have taken steps to address this issue, the former through passage of the Broadband Deployment Accuracy and Technological Availability (DATA) Act, the latter through the establishment of the Digital Opportunity Data Collection (DODC).

The DODC will utilize "granular and detailed coverage data" from Internet service providers (ISPs), along with input from government entities and the general public, to produce maps far more accurate than those that rely upon census-block-based information submitted via FCC Form 477.

However, As Free State Foundation President Randolph May and I noted in "Congress Should Fund Needed Broadband Maps This Session," a recent Perspectives from FSF Scholars, the money required to fund that effort until now had not been appropriated. This legislation provides the FCC with the full amount requested by Chairman Ajit Pai: $65 million.

The relief package also includes $3.2 billion to keep Americans connected during the COVID-19 pandemic. Eligible households will receive a monthly emergency broadband benefit in the form of a $50 discount on high-speed Internet access service. Eligibility generally is limited to low-income households and those who have endured lay-offs or furloughs.

As the administering entity, the FCC has sixty days to adopt rules implementing the program, which will continue for six months after the Secretary of Health and Human Services has declared an end to the public health emergency. The Commission will reimburse participating ISPs directly for the amount of the monthly discount and up to $100 for a connected device (tablet, laptop, or desktop computer) that they provide. A provider need not be designated as an Eligible Telecommunications Carrier in order to participate.

In addition, the legislation tasks NTIA with disbursing a total of $1.3 billion for broadband grant programs, $1 billion targeting Tribal lands and $300 million for unserved (including rural) areas. Recipients of Tribal Broadband Connectivity Grants may use those funds to deploy fixed broadband infrastructure in unserved areas or, during the pandemic, for subsidized broadband service, distance learning, or telehealth programs.

The remaining $300 million will be made available in the form of Broadband Infrastructure Deployment Grants, which will target unserved areas for network infrastructure construction and prioritize, among other things, projects that target smaller communities (that is, counties, cities, or towns with less than 50,000 inhabitants).

NTIA also will become home to a new Office of Minority Broadband Initiatives that will perform a number of responsibilities, most significantly the administration of a $285 million pilot program focusing primarily on the broadband needs of Historically Black Colleges and Universities (HBCUs) and their surrounding communities.

Congress addressed another funding need, relating to potential security vulnerabilities in telecommunications equipment manufactured by Chinese companies Huawei and ZTE currently deployed in U.S. networks, by allocating up to $1.9 billion to "rip and replace" those devices with trusted alternatives. In March 2020, lawmakers passed the Secure and Trusted Communications Networks Act of 2019, which banned recipients of Universal Service Fund support from purchasing at-risk equipment and services, mandated that they remove such devices from their networks, and directed the FCC to establish a program to reimburse primarily smaller providers (that is, those with fewer than 2 million customers) for replacement equipment.

In November, the Commission adopted rules and procedures to implement that legislation, but Congress had not yet appropriated the money required. The relief package funds this effort and expands the pool of recipient providers to those with up to 10 million customers – though it prioritizes those with less than 2 million customers.

In addition, the relief package provides the FCC with just under $250 million in additional funding for its COVID-19 Telehealth Program established earlier this year by the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Finally, the bill incorporates (1) the December 31, 2021, deadline for the FCC to commence an auction of the 3.45-3.55 GHz band established by the Beat CHINA for 5G Act, and (2) the repeal of the mandate to auction the T-Band – spectrum that first responders depend upon for mission-critical communications in a number of large cities – set forth in the Don't Break Up the T-Band Act of 2020.

In a statement, FCC Chairman Pai "applaud[ed] Congress for including ... a number of provisions that advance critical national priorities in communications policy" and "salute[d] Congressional leaders for working together in a bipartisan manner to reach agreement on this consequential legislation that will help protect our national security, close the digital divide, advance telehealth, and promote American leadership in 5G."

Proposed Legislation Would Incorporate Price Tags, and Economic Rigor, into Government Spectrum Discussions

Spectrum is in increasingly short supply. Especially mid-band spectrum. My fellow Free State Foundation scholars and I have highlighted wireless industry reports indicating that, absent additional spectrum clearing, the United States is at risk of falling behind other nations in making more available, in particular for 5G. The most likely source? Frequencies currently allocated to government agencies.

Legislation introduced by Senator Mike Lee (R-UT) would facilitate difficult discussions regarding whether government spectrum is being put to its best and highest use by directing NTIA to determine its real-world monetary value. That, in turn, would infuse the process with greater transparency and data-driven analysis.

The federal government, led by the Department of Defense, has exclusive or primary use of the majority of spectrum between 225 MHz and 3.7 GHz. In 2012, the President's Council of Advisors on Science and Technology (PCAST) found that "nearly 60% of … beachfront frequencies are predominantly allocated to Federal uses, a statistic that illustrates the importance of finding more effective mechanisms to share Federal spectrum."

Sen. Lee's bill, the Government Spectrum Valuation Act (S. 1626), champions a market-oriented approach. By directing NTIA to assign dollar values to government-held spectrum, it would enable quantitative comparisons between private and public allocations. In addition, by including those amounts within agencies' budgets, it would provide them with economic incentives to relinquish underutilized capacity in order to secure funding for higher priority initiatives.

In the commercial realm, market forces reveal the value of spectrum. Commission-led auctions, such as the one scheduled to take place this December for 280 MHz of high-value mid-band spectrum in the C-Band, afford interested parties the opportunity to bid competitively on scarce resources. The highest bidders prevail, and the dollar amounts they agree to contribute to the Treasury establish what the spectrum is worth.

But that is not the case with government spectrum, which in many cases was allocated years ago and under vastly different – and much less efficient – technological circumstances. As Visiting Scholar Gregory J. Vogt explained in a recent Perspectives from FSF Scholars, "Coordinated Government Decisionmaking on Spectrum Issues: It's Vital to Locating More Spectrum for 5G Use":

There is a significant "opportunity cost" associated with government spectrum, which is defined as the loss of potential benefits when a suboptimal alternative is chosen over one that would generate higher consumer welfare. In May 2015, Coleman Bazelon and Guilia McHenry estimated the economic value of 645.5 MHz of licensed spectrum in the hands of government users was $455 billion. If this spectrum was auctioned off to commercial users, it would generate about $1.7 trillion in 2015 dollars in economic activity.

Indeed, as Sen. Lee noted when he introduced the Government Spectrum Valuation Act, "because federal agencies pay such a minimal fee to NTIA for their allocations – absent of a market-based allocation – they have little incentive to share spectrum or make it available for commercial use."

Nor are policymakers able to make objective, apples-to-apples comparisons between commercial and government allocations. They might have imperfect information as to what that spectrum would fetch on the open market, but the other side of the balance – its true and full value to government users – often is unknown.

(To be sure, government spectrum plays an important role, including in our national defense, that in certain instances cannot be made public. The legislation as proposed would allow NTIA to consider, and require it to keep confidential, "classified, law-enforcement sensitive, or proprietary information" relevant to the assigned dollar value.)

To address this, the Government Spectrum Valuation Act would require NTIA to work with the FCC and the Office of Management and Budget (OMB) to estimate the value of spectrum. Such valuations would be based "on the value that the electromagnetic spectrum would have if the spectrum were reallocated for the use with the highest potential value of licensed or unlicensed commercial wireless services that do not have access to that spectrum as of the date of the estimate."

It also would direct NTIA to "consider the spectrum needs of commercial interests while preserving the spectrum access necessary to satisfy mission requirements and operations of Federal entities."

The bill would establish the following schedule pursuant to which NTIA must complete its valuations:

• 3 KHz to 33 GHz: within 1 year and every 3 years thereafter
• 33 GHz to 66 GHz: within 2 years and every 3 years thereafter
• 66 GHz to 95 GHz: within 3 years and every 3 years thereafter

It is worth pointing out that FCC Commissioner Michael O'Rielly repeatedly has advocated for a similar approach, noting in 2018 that "requiring U.S. Government agencies to put a market price on their spectrum holdings will fix a budgetary anomaly and promote overall spectrum efficiency by incentivizing each agency to release unneeded spectrum."

Although Sen. Lee unveiled the Government Spectrum Valuation Act back in May 2019, it has been the recent subject of renewed focus. Representatives Cathy McMorris Rodgers (R-WA) and Yvette Clarke (D-NY) introduced companion legislation in the House on September 14, 2020. Two days later, the Senate Commerce Committee voted to approve Sen. Lee's version. That bill now is before the full Senate.

Then-NTIA Administrator David Redl stated in 2019 that, "[i]f we're being honest, the era of easy spectrum decisions is over." Passage of the Government Spectrum Valuation Act would facilitate that process by assigning specific dollar values to government spectrum, thereby enabling policymakers to make rational, informed decisions regarding its best and highest use.

FCC Reluctantly Initiates T-Band Reallocation Process; Will Congress Intervene?

Newton's first law of motion states that "[a]n object at rest stays at rest and an object in motion stays in motion with the same speed and in the same direction unless acted upon by an unbalanced force."

The mandate set forth in the "Middle Class Tax Relief and Job Creation Act of 2012" that the FCC reallocate and auction the T-band? An object in motion. Congressional action to prevent that from happening? A much-needed unbalanced force.

Whatever motivated adoption of the T-band auction mandate eight years ago is of little concern today. What matters in 2020 is that first responders in a number of large metropolitan areas, including New York, Los Angeles, Chicago, Philadelphia, and Boston, depend upon the T-band (470-512 MHz) for mission-critical communications.

Also significant: the U.S. General Accountability Office (GAO) reports that, in many of these locations, there may not be alternative spectrum available to which first responders might relocate. And multiple agencies, including the FCC and the National Public Safety Telecommunications Council, have concluded that relocation costs, which could be as high as $6 billion, likely would far outweigh auction revenues.

That is why FCC Chairman Ajit Pai, when he recently renewed his call for federal legislation to repeal the T-band auction mandate, labeled it a "bad idea." Democratic Commissioner Jessica Rosenworcel said the same, "any way you cut it."

Nevertheless, the Commission's hands are tied, and so on July 6 it adopted a Notice of Proposed Rulemaking (NPRM) in order to initiate the process with sufficient time to meet the statutory deadline of February 22, 2021.

As the NPRM hopefully notes, however, "[b]ipartisan Congressional opposition ... has increased" and "[m]ultiple bills have been introduced that would repeal the T-Band Mandate."

One such piece of proposed legislation, the "Don't Break Up the T-Band Act of 2019" (H.R. 451), was approved by the House Energy & Commerce Committee earlier this week.

A companion bill (S.2748) was introduced in the Senate late last year.

The T-band auction mandate is a threat to public safety and a waste of limited agency resources. It is time for Congress to apply an equal and opposite force to stop its forward motion.