FWA and Cable MVNO Services Gains Continue in Mid-2024

Fixed wireless access (FWA) residential broadband services as well as cable wireless mobile virtual network operator (MVNO) services are the faces of cross-platform competition in today's communications marketplace. Second quarter results for 2024 show continued growth of these services.

On July 31, T-Mobile announced that it added 406,000 FWA subscribers during the second quarter of 2024, upping its overall FWA subscriber total to 5.6 million. On July 22, Verizon announced that it added 378,000 FWA subscribers for a total of 3.8 million. On July 24 AT&T announced that it added 139,000 subscribers to its AT&T Internet Air service, reportedly growing its total FWA subscriber count to about 350,000.

News articles – including this June 6 LightReading article, "FWA in the USA: Getting ready for Phase 2," which helpfully summarizes different analyst takes on the future of the service – indicate that FWA continues to pose a particularly strong competitive challenge to cable broadband services. 

However, cable broadband providers continue attracting new subscribers to their MVNO wireless service offerings. According to a July 26 announcement by Charter Communications, its Spectrum Mobile service added 557,000 subscribers during the second quarter of 2024. At the quarter's end, Spectrum Mobile had 8.8 million subscribers. Additionally, Comcast announced on July 23 that it had gained 322,000 subscribers to Xfinity Mobile during the second quarter, increasing its subscriber total to 7.2 million. 

 

As I wrote in a blog post on May 3 of this year, "[t]he proper response by the FCC to the growth of FWA and cable MVNO in the communications market should be to emphasize market competition as a safeguard to consumer welfare rather than stringent government regulation." At that time, I observed that the Commission chose the wrong response on April 25 by re-imposing Title II public utility regulation on wireline and wireless broadband Internet Access services. However, the Sixth Circuit issued an order imposing a stay on the FCC's Safeguarding and Securing the Open Internet that keeps the regulation from going into effect while the legal challenge before the court proceeds to the merits. Free State Foundation President Randolph May responded to the court's stay order in an August 2 press release titled "The FCC Should Turn to Productive Endeavors." 

 

One productive endeavor that the Commission should be pursuing is increased spectrum availability for commercial use. As FSF President May and I wrote in FSF’s July 2024 public comments to the FCC for its forthcoming Communications Marketplace Competition Report:

 

To further promote competition, innovation, and investment in the broadband marketplace, the Commission should work proactively to make more spectrum available for commercial use and by removing regulatory barriers to broadband deployment… There is particularly strong demand for additional mid-band spectrum. The Commission ought to prioritize the lower 3.1-3.45 GHz band for study and prompt repurposing… Although proposals for repurposing different bands are at different stages of development and each faces unique challenges, the Commission should advance every proposal for spectrum that may realistically be suitable for commercial uses – whether on a licensed or unlicensed basis. A larger spectrum supply will enable more competitors to serve more Americans with next-gen services. 

Court Rejects Overstated First Amendment Challenge to Anti-Circumvention Rights

 On August 2, the U.S. Court of Appeals for the D.C. Circuit released a decision upholding the constitutionality of the anti-circumvention rights provisions in Section 1201 of the Digital Millennium Copyright Act (DMCA). At issue before the court in Green v. U.S. Department of Justice was a First Amendment facial challenge to Section 1201. The court's decision is an important vindication of the law that protects copyright owners from unlawful access to their intellectual property.

In the digital age economy, owners of valuable copyrighted media, including movies, TV shows, sound recordings, books, and images must be able to control who has access to their content. Section 1201 furthers that basic purpose, as I described in my February 2022 Perspectives from FSF Scholars, "D.C. Circuit Should Affirm the Constitutionality of Anti-Circumvention Rights":

Similar to how the law of trespass protects property owners against unauthorized access to their land, Section 1201 protects copyright owners against those who intentionally subvert TPMs in order to access their copyrighted content. Sections 1201(a) and 1201(b) prohibit the circumvention as well as the trafficking of services and devices that circumvent TPMs for controlling access to copyrighted content. Both provisions are directed toward technologies that are designed primarily to circumvent TPMs, have only limited commercially significant purposes other than circumventing TMPs, or are marketed or used in concert with a person with knowledge of intended use for circumventing TPMs.

During a prior appeal to the D.C. Circuit in Green, the Appellants raised both as-applied and facial First Amendment challenges to Section 1201. In a blog post titled "D.C. Circuit Affirms the Constitutionality of Anti-Circumvention Rights," I wrote about the court’s December 2022 decision that rejected as-applied challenges raised against Section 1201. In that instance, the court did not reach the merits of the facial challenge and remanded it to the trial court. Subsequently, the District of Columbia upheld the constitutionality of Section 1201. An appeal on the matter of the facial challenge was brought again before the D.C. Circuit, providing the occasion for the decision in Green that was issued on August 2.

 

In essence, the Appellants argued that Section 1201 was overbroad because it censors speech that is fair use of copyrighted works, and fair use is necessarily protected by the First Amendment. That is a thoughtful and clever argument, but as the D.C. Circuit wrote: "we disagree that the First Amendment necessarily shields all fair uses of copyrighted work from regulation." The court explained:  

The First Amendment protects a right to read, but it does not grant unimpeded access to every reading material a reader might wish for. Similarly, the First Amendment does not guarantee potential fair users unfettered or privileged access to copyrighted works they seek to use in their own expression. To hold otherwise would defy the First Amendment's solicitude of speakers' control over their own speech. See Harper & Row, 471 U.S. at 559 (noting that copyright serves the First Amendment value of the "right not to speak"). 

 

If every work that the public might wish to access "could be pirated away" via circumvention, soon nothing worth reading would be published electronically. Id. Plaintiffs' premise that fair users are entitled to make unauthorized use of copyrighted works assumes away the very entitlements copyright law validly protects. Consumers' access to copyrighted work routinely requires consent from the copyright owner- typically obtained by paying for access subject to certain limitations on use. 

As the court recognized, there might conceivably be instances in which Section 1201 or the denial of an exemption from its strictures could give rise to successful as-applied First Amendment challenges. But overwhelmingly that is not likely the effect of the law. The statute is not content-based and it does not favor or disfavor any particular viewpoints. Its purpose is to protect the valuable copyrighted property from unauthorized access. The D.C. Circuit's decision in Green v. U.S. Department of Justice, including its handling of the fair use issue, is thoughtful and reasonable. In upholding the constitutionality of anti-circumvention rights, the court gets it right once again. 

TMT with Mike O'Rielly – Ep 10: History, Present, and Future of the USF

Episode 10 of "TMT with Mike O'Rielly," a videocast featuring former FCC Commissioner and Adjunct Senior Fellow at the Free State Foundation Michael O'Rielly, was released on August 8. In this episode, titled "The History, Present, and Future of the Universal Service Fund," Mr. O'Rielly is joined by guest Dr. Harold Furchtgott-Roth, a former FCC Commissioner and currently Senior Fellow and Director for the Center for the Economics of the Internet at the Hudson Institute. 

Senate Bill Would Ensure Timely Broadband Infrastructure Builds on Federal Land

On July 29, Senators John Thune, Ben Ray Luján, and John Barrasso introduced the Accelerating Broadband Permits Act. The purpose of the bill is to improve executive agencies’ processing of permit applications for the construction of communications facility installations on federal land. Under the MOBILE NOW Act of 2018, executive agencies with supervision over federal lands have 270 days to make decisions on applications for permits to build towers, antennas, cables, or any other infrastructure associated with wireless or wireline services. An April 2024 Government Accountability Office Report found problems with agencies processing those applications within the deadline. The Accelerating Broadband Permits Act is intended to address those problems and help identify instances where the agencies are likely to fail to meet the deadline and ensure timely processing.

The FCC has long recognized that local permitting processes are often a major impediment to timely broadband access. The Accelerating Broadband Permits Act would help alleviate that impediment on federal lands. The Act appears to be worthwhile legislation that could help accelerate network infrastructure deployment to underserved and unserved Americans. Much land in western states is held in trust or owned by the federal government, and federal agencies must fulfill the responsibilities that come with being a trustee or property owner, not to mention comply with the MOBILE NOW Act. 

 

Senators Thune, Luján, and Barrasso deserve credit for bringing forward this bill. Several billion dollars in subsidies are going to be distributed by NTIA to the states under the Broadband Equity, Access, and Deployment (BEAD) Program to fund new buildouts. The effectiveness of BEAD Program subsidy dollars will depend, to a significant extent, on having workable federal siting policies in place. The 118th Congress should give the Accelerating Broadband Permits Act timely consideration.  

States Should Cut Red Tape to Spur Economic Growth

In a recent Discourse article, Patrick McLaughlin analyzed the economic impact of states cutting their regulatory red tape. Economists generally claim that burdensome regulations can reduce overall economic output, but direct evidence of a relationship between the two strengthens these assertions.

Mclaughlin begins by laying out the history of the modern movement for cutting back on regulations, mentioning how, in 2001, British Columbia began deregulating to the degree that it cut back 40% of its province-level regulations in three years. This change caused British Columbia to become an economic leader and increased economic growth by over 1%. Because of this correlation between deregulation and economic growth, several American states quickly followed suit.

 

The first was Kentucky, but five other states also qualify as “reform states” under Mclaughlin’s metrics. He began measuring deregulation policies starting in 2016, using a partially A.I.-fueled “State RegData Project.” His findings show that when reform states began deregulating over a defined “RegData” period, which was most recently updated in mid-2023, they experienced an above-normal economic growth rate. While status quo states only experienced a 1.87% growth rate during this period, reform states’ economic growth was at an average of 2.09%, a difference of about 0.22% economic growth over a seven-year period. Mclaughlin notes that while this may not appear to be a large number, it means a lot for an entire state’s economy, and the economic growth increase would compound to much larger numbers over longer periods of time.

While this research is not dispositive regarding the issue of regulatory reform’s relationship to economic growth, it does show that widespread regulatory reform could significantly increase the productivity of state economies. With this evidence showing a direct correlation, hopefully, many more states will implement deregulatory programs to cut unnecessary red tape before they lose business to more pro-business states.

Press Release: The FCC Should Turn to Productive Endeavors

Regarding the Sixth Circuit’s issuance of an order staying implementing of the FCC decision to regulate Internet service providers as common carriers, Free State Foundation President Randolph May issued the following statement:

“Not since Daniel read the proverbial handwriting on the wall to King Belshazzar have predictions of doom been a safer bet. From the initiation of the FCC’s proceeding to regulate Internet service providers as common carriers, it’s been clear that the FCC’s action likely would be held unlawful as exceeding the agency’s authority. While the Sixth Circuit’s action is not a final determination, here’s today’s prediction. If the FCC pursues this case to the Supreme Court, it will lose because the Court has already telegraphed, in West Virginia v. EPA, that whether the FCC may regulate Internet providers as common carriers is a Major Question —and one that Congress has not clearly authorized the FCC to decide. In other words, the handwriting is on the wall, and you don’t have to be Daniel to read it.

“It would be so much better for America’s consumers if the Commission and the Biden Administration would turn away from the pursuit of fruitless aggressive regulatory endeavors, such as those pursued in the now-stayed Title II proceeding and the Digital Discrimination proceeding, and focus their energies on policies that would speed deployment to those still waiting for the remaining broadband deployment gaps to be filled." 

TMT with Mike O'Rielly - Ep 9: FCC Regulations and NTIA BEAD Burdens

Episode 9 of "TMT with Mike O'Rielly," a videocast featuring former FCC Commissioner and Adjunct Senior Fellow at the Free State Foundation Michael O'Rielly, was released on July 30. In this episode, titled "FCC Regulations and NTIA BEAD Burdens," Mr. O'Rielly is joined by guest Grant Spellmeyer, President and CEO of ACA Connects. Their conversation also includes FCC matters and issues such as public utility regulation of broadband as well as the video services market. 

ACA Connects is a member association of independent broadband, video, and communications providers.