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

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

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

ITIF Report Highlights Potential Role of Network Functions Virtualization in Race to 5G

On April 27, the Information Technology & Innovation Foundation (ITIF) published a paper by Doug Brake on 5G. “A U.S. National Strategy for 5G and Future Wireless Innovation” addresses the transformative role that the next generation of wireless technology will play in our economy, the proper role of government in its timely deployment, and, of course, network security.

This report provides an informative deep dive into all things 5G: its foundational technologies; how it will provide both a quantitative improvement in mobile performance (e.g., higher speeds and lower latency) and a qualitative expansion of use cases (e.g., industrial automation and smart cities); the need to promote not just deployment but also demand-driven adoption (think “killer apps”); the appropriate policies to facilitate continued American global leadership (e.g., spectrum clearing, improved access to rights-of-way, spending on R&D, and safeguarding standards-setting processes); and how best to address security concerns related to the supply chain.

There has been much attention paid to this last topic. In particular, the Trump Administration, Congress, and the FCC all have raised alarms regarding Chinese telecommunications equipment manufacturer Huawei, the early leader in 5G hardware. Policymakers have concerns – relating, among other things, to espionage, network sabotage/shut-down, and consumer privacy –about operators incorporating into their networks purpose-built hardware (and enabling software) from a company with ties to the Chinese government. Unfortunately, at the moment there aren’t a lot of viable alternative vendors. Nokia, Ericsson, and Samsung are potential suppliers, but at this time they do not appear able to compete at scale.

That’s where Network Functions Virtualization (NFV) enters the picture. Broadly speaking, NFV does the hard work in software running on off-the-shelf servers. As Mr. Brake explains:

In the traditional mobile networking approach, the core network includes a variety of hardware appliances designed for specific functions…. [NFV] represents an important disruption of this system, wherein operators are transitioning to general-purpose servers and switches throughout the network instead of purpose-built hardware that must be individually installed and configured. The functionalities can then be provided in software….

NFV can lead to lower costs, as off-the-shelf servers benefit from greater economies of scale than customized devices. More importantly, it has positive national security implications. NFV plays to the American tech sector’s proven strengths in software development, which notably can be accomplished at a relatively fast pace. Thus, rather than scrambling to play catch up on the hardware side, NFV creates an opportunity for U.S. companies to overcome, through a sustained commitment to rapid software innovation, whatever first-mover advantages Huawei may have gained.

The White House planned to host a 5G summit last month that would haven taken up the topic of NFV. Due to the novel cornonavirus, however, it was cancelled. Nevertheless, I expect the focus on software-driven solutions to increase steadily going forward.

Morning Consult Op-Ed on Combatting Digital Piracy

Free State Foundation President Randolph May and I today published an op-ed in The Morning Consult titled "World IP Day 2020 – Protect Americans' Copyrights From Digital Piracy." This just-published op-ed addresses online piracy and counterfeiting of copyrighted goods in digital media. Many thanks The Morning Consultfor running our op-ed. 

The need to combat international digital piracy of copyrighted works receives a fuller treatment in our new book, Modernizing Copyright Law for the Digital Age – Constitutional Foundations for Reform (Carolina Academic Press 2020). The new copyright book is available both in print and e-book formats.

New York Lawmakers Unveil Two Digital Advertising Tax Proposals

For states scrambling to tap new sources of tax revenue, digital advertising is the low-hanging fruit du jour. The Maryland General Assembly was the first in the nation to pass such a bill.  New York lawmakers now threaten to follow its unfortunate example.

Free State Foundation President Randolph May and I have written previously about Maryland House Bill (H.B.) 732, a misguided attempt to fund costly education proposals through a tax that singles out digital advertising. H.B. 732 awaits action, ideally in the form of a veto, by Governor Hogan.

On March 13, New York State Senator and Deputy Majority Leader Michael Gianaris (D – Twelfth Senate District) introduced a near word-for-word copycat bill. Senate (S.) 8056 tracks H.B. 732 down to its reference to the "comptroller," despite the fact that, in New York, the relevant agency is the Department of Taxation and Finance.

However, S. 8056 does deviate from H.B. 732 in one key respect: it applies only to digital "advertising services ... that use personal information about the people the ads are being served to."  This is noteworthy given the inspiration behind H.B. 732: a proposal by economist Paul Romer designed to end the use of targeted advertising through the imposition of a punitive tax.

More recently, New York State Senator Kevin Thomas (D – Sixth Senate District) on April 13 unveiled legislation that would tax digital advertising in order to fund zero-interest student-loan debt refinancing. Rather than establishing a separate tax, S. 8166 would include digital advertising within the sales tax base.

These proposals are unlikely to survive judicial challenge. Should they become effective, unintended but foreseeable economic consequences will overshadow their hoped-for benefits. New York lawmakers therefore should look elsewhere for additional revenue.

Panel Video on the Foundations of Intellectual Property

In time for World IP Day on April 26, the Committee for Justice hosted a panel on "Google v. Oracle and the Constitutional Foundations of Intellectual Property Law." I was honored to join the panel, which included Prof. Adam Mossof and CFJ President Curt Levey. Video for the one-hour panel is now available online:

My panel colleagues addressed issues raised in Google v. Oracle, an important copyright case now on the U.S. Supreme Court's docket. And my panel remarks focused on the natural rights understanding of copyrights that formed a backdrop to the U.S. Constitution's Copyright Clause. I also briefly touched on some copyright modernization reform proposals drawn from the new book by Free State President Randolph May and I titled Modernizing Copyright Law for the Digital Age – Constitutional Foundations for Reform. My deep thanks go to the Committee for Justice for inviting me to participate. 

FSF's Randolph May in Real Clear Markets: "A Tocquevillian View of Reinvigorating the United States"

On April 22, Real Clear Markets published an op-ed by Free State Foundation President Randolph May describing how America best can transcend the Coronavirus outbreak.

"A Tocquevillian View of Reinvigorating the United States" makes the case that, although government has a limited role to play, it is private associations and voluntary activity – quintessentially American concepts nineteenth-century political philosopher Alexis de Tocqueville characterized as "associations of a thousand other kinds" in his seminal work, Democracy in America (1831) – that hold the key to our nation's timely and complete recovery.

A brief synopsis cannot capture its full import. To read the essay in its entirety, please click here.

MPA's Response to COVID-19 Gathered Together

Here's a new Motion Picture Association webpage that contains info regarding all the ways the film, television, and streaming companies are responding to the COVID-19 crisis. There are lots of links to information regarding relief efforts, specific resources, and the like.

Definitely worth a look. And like so many other efforts of the private sector, thanks are in order for all the resources made available.

Study: Additional Spectrum for Wi-Fi Promises Economic Benefits

A recent study commissioned by WifiForward concludes that additional unlicensed spectrum could contribute nearly $200 billion to the U.S. economy.

In order to mitigate the COVID-19 public health crisis, government officials have taken significant steps to "flatten the curve." As a result, many business establishments deemed to be "non-essential" are closed. So, too, are schools. The ability to work and learn remotely mitigates the economic and social impact of these measures. In-home Wi-Fi networks operating in unlicensed spectrum make this possible by allowing consumers to connect multiple end-user devices – laptops, smartphones, tablets, etc. – to broadband facilities.

As a consequence, the use of both broadband and Wi-Fi has increased dramatically. NCTA – The Internet & Television Association reports that, since March 1, its cable operator members have witnessed a 20 percent increase in downstream traffic and a 34 percent increase in upstream traffic. Meanwhile, data released by Plume reveals that the number of Americans online at home during the day has increased 105 percent since January 29, from 22.6 to 46.2 million. The Free State Foundation can attest to this new reality, having conducted its first meeting by videoconference just a few days ago.

In a February 7 FSF Perspectives, I noted that, according to the Wi-Fi Alliance, Wi-Fi's global economic value in 2018 was nearly $2 trillion, of which 25 percent – $499 billion – was captured in the United States. In 2023, those numbers are expected to increase to $3.47 trillion and $993 billion, respectively.

A study released by WifiForward on April 13 predicts that additional Wi-Fi capacity could generate substantial economic gains. Specifically, it concludes that FCC proposals to allocate spectrum to unlicensed use in the 5.9 GHz and 6 GHz bands could contribute more than $183 billion to the U.S. economy over the next five years. This includes a $106 billion increase in Gross Domestic Product (GDP), $69 billion in producer surplus, and $8 billion in consumer surplus.

Thankfully, one day soon people will be able to return to their offices and schools. However, the long-term effects of the Coronavirus pandemic on how, and from where, people work and learn remain to be seen. One thing, though, is certain: Wi-Fi will continue to play an integral role.

The executive summary of the study by Dr. Raul Katz is available here.

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. 

MEDIA ADVISORY: FCC Set to Vote on Ligado's Applications to Use L-Band Spectrum

Free State Foundation President Randolph May issued the following statement regarding Chairman Pai's proposed order granting, with conditions, Ligado Networks' applications to use L-Band spectrum:

Above all else, I'm pleased that Chairman Pai has circulated a draft order. For several years now, I've advocated that the FCC move ahead to make a decision on Ligado's long-pending applications. I've never professed to render any definitive opinion on the finer points of the various interference claims involved in this years-long controversy. But I know that Ligado has gone to great lengths to modify its plans to address claimed interference concerns. And have confidence in the technical expertise of FCC's engineering staff and the commissioners' willingness to take that expertise into account. So I hope the Commission now acts promptly. This is another FCC action that can advance the U.S. position with regard to 5G deployment.

Tennessean Op-Ed on Modernizing Copyright Law for the Digital Age

Free State Foundation President Randolph May and I today published an op-ed in The Tennessean titled "Three Ways to Modernize Copyright Laws in the Digital Age." The just-published op-ed touches on themes we addressed in more detail in our new book, Modernizing Copyright Law for the Digital Age – Constitutional Foundations for Reform(Carolina Academic Press 2020). Our thanks go to The Tennessean for publishing our op-ed. Be sure to check it out at The Tennessean's website. Our new book is available both in print and e-book editions. 

Committee for Justice Virtual Panel: "Mozilla v. FCC: What Next?"

On Thursday, April 9, the Committee for Justice hosted a virtual panel discussion on the FCC's Restoring Internet Freedom Order, the D.C. Circuit Court's Mozilla decision, Chevron deference, and the future of broadband regulation.

Along with Roslyn Layton, a Visiting Scholar at the American Enterprise Institute, and Nathan Leamer, Vice President at Targeted Victory, Free State Foundation President Randolph May participated in "Mozilla v. FCC: What Next?," a lively and informative conversation moderated by Ashley Baker, Director of Public Policy at the Committee for Justice.

I urge you to take a look. The video is available here.

Will Enforcement of California's Privacy Law Precede Final Rules?

Between Easter and quarantine baking, eggs are trending. But do they – or chickens – come first? No one knows for certain. By contrast, the sequential order of rules and enforcement is, or at least should be, noncontroversial. Step one, establish the do’s and don’ts. Step two, target the violators. Not when it comes to the California Consumer Privacy Act (CCPA), however.

The CCPA, which became effective on the first of January, includes language that, on its face, appears to defer the commencement of enforcement. Except that it does no such thing. California Attorney General Xavier Becerra may not initiate enforcement “until six months after the publication of the final regulations issued pursuant to this section or July 1, 2020, whichever is sooner.”

No, that’s not a typo. The statute contemplates that the AG might bring action before his office has provided those subject to the CCPA with the necessary clarity that only finalized rules can afford. This is particularly problematic given that those rules will spell out actions that businesses must take in order to be in compliance. Specifically, they will define, among other things, the categories of personal information covered, the processes for submitting and responding to opt-out requests, and the manner in which notices must be provided.

Making matters worse, the AG’s office has indicated that it will consider taking retroactive action – that is, pursuing companies for alleged violations that occur prior to July 1.

Businesses cannot comply with rules that do not yet exist. Nevertheless, and even though the CCPA was adopted back in 2018, the AG’s office did not publish proposed rules until October 11, 2019 – virtually assuring that they would not be finalized by this July. Since then, it has issued two sets of modified rules, on February 10 and March 11. Comments on the latter were due just over two weeks ago. What the next steps are (yet another round of edits?), and how long they might take, currently are not known.

Then, on March 30, California Governor Gavin Newsom issued Executive Order N-40-20, which, in light of the impact of the Coronavirus-related State of Emergency that he declared on March 4, extends “deadlines …related to the filing, refiling, certification and/or review of regulations and emergency regulations … for a period of 60 calendar days to allow state agencies additional time to finalize regulatory changes pursuant to the Administrative Procedure Act.”

As a practical matter, this effectively ensures that, come July 1, entities covered by the CCPA will find themselves in regulatory no-man’s land.

On March 20, a group of 66 trade associations, companies and other organizations wrote to Attorney General Becerra asking that he forbear from enforcing the CCPA until January 1, 2021. They based their request on both the incomplete status of the rules and the general impact of the COVID-19 pandemic.

An advisor to the AG, responding to a request for comment by Forbes, wrote in an email that “‘[r]ight now, we’re committed to enforcing the law upon finalizing the rules or July 1, whichever comes first…. We’re all mindful of the new reality created by COVID-19 and the heightened value of protecting consumers’ privacy online that comes with it. We encourage businesses to be particularly mindful of data security in this time of emergency.”

As Dan Jaffe, Executive Vice President of Government Relations for the Association of National Advertisers (one of the signatories to the forbearance letter mentioned above) recently blogged, “[e]nforcing last minute regulations without giving companies time to adapt their practices accordingly is not right. It is not fair for consumers who expect standard, legally compliant responses from business. It is not fair for businesses who deserve clarity in regard to their obligations under the CCPA.”

FCC Officials Defend Free Speech from (un)Free Press Petition

On April 6, FCC Media Bureau Chief Michelle Cary and General Counsel Thomas Johnson issued a commendable letter defending First Amendment freedom of speech and rejecting an emergency petition by the unsuitably-named advocacy group Free Press that sought a federal investigation of broadcasters and to effectively censor presidential news conferences and public commentary related to COVID-19. The letter, which is worth reading in full, is a gratifying instance of public officials defending liberty and sensibly discharging their responsibilities rather than twisting them for dangerous ends and under the cover of public emergency. It would be wrong for the FCC to use its public interest and other powers to selectively imposes its own views on broadcasters and it would be equally wrong for the agency to do the same through Internet or other communications platforms. 

Chairman Pai Talks Rapid Responses to COVID-19 and More in New Teleforum

On April 3, FCC Chairman Ajit Pai participated in a "Capital Conversations" teleforum hosted by the Federalist Society on "The FCC and the COVID-19 Pandemic." Audio of that teleforum is now available to stream or download from the Federalist Society's website. In the teleforum, Chairman Pai gives a quick overview of the FCC's activities in responding to the flu pandemic, including the Commission's Keep Americans Connected Pledge and COVID-19 Telehealth Program. During the question-and-answer portion, Chairman Pai also addresses current communications policy topics ranging from the Restoring Internet Freedom Order and Mozilla v. FCC remand to spectrum proceedings such as C-Band, L-Band, and 6 GHZ. 

White House Releases "National Strategy to Secure 5G"

On Monday, March 23, President Trump signed into law the Secure 5G and Beyond Act of 2020. That legislation directs the Administration, within 180 days of enactment, to develop a plan that ensures the security of domestic 5G networks; provides allies with technical assistance as they work to harden their own 5G networks; and protects the competitiveness of U.S. companies, the privacy of consumers, and the integrity and impartiality of standards-setting bodies.

The same week, the White House initiated that process by releasing the "National Strategy to Secure 5G," a framework document that defines the following four lines of effort:

One: facilitating the private-sector led rollout of 5G in the United State by building upon the FCC's 5G Fast Plan and NTIA's National Spectrum Strategy.

Two: defining core security principles for 5G capabilities and infrastructure in response to potential risks, which may be economic or national security in nature. Core security principles include best practices in cybersecurity,  supply chain risk management, and public safety, and will be synchronized with other security principles, such as the "Prague Proposals."

Three: addressing risks associated with the worldwide development and deployment of 5G infrastructure by (a) ensuring supply chain security, and (b) by taking actions necessary to protect U.S. national security interests from 'high-risk' vendors (that is, those owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary that pose an undue or unacceptable risk) that build upon Executive Order 13873 (issued May 15, 2019).

Four: working with like-minded countries to promote (a) the responsible global development and deployment of 5G technology and security principles, (b) U.S. leadership in standards setting, and (c) the availability of secure and reliable equipment and services.

5G will drive forward the economy in the years ahead. Therefore it is encouraging to see Congress and the Administration take proactive steps to safeguard next-generation wireless infrastructure and ensure continued American technological leadership in this space.

Teleforum on Modernizing Copyright Law - Audio Available

On March 31, Free State Foundation President Randolph May and I participated in a Federalist Society teleforum to discuss themes from our new book Modernizing Copyright Law for the Digital Age – Constitutional Foundations for Reform. The discussion ranged from DMCA reform, small copyright claims relief, AM/FM terrestrial radio's exemption, and the natural rights basis for copyrights. Audio for that teleforum can now be downloaded or streamed from the Federalist Society's website. Our thanks go to the Federalist Society, to moderator Prof. Adam Mossoff, and to teleforum participant Vice Dean and Prof. Michael Risch. Our new book is now available for purchase at Amazon and at Carolina Academic Press. 

T-Mobile Announces Closing of its 5G-Accelerating Merger with Sprint

Today, T-Mobile US announced the closing of its 5G-accelerating merger with Sprint. The New T-Mobile touts that, over the next 6 years, its network capacity will surge 14 times its current capacity, its average 5G speeds will be 15 times faster than its current LTE speeds, and its 5G network will cover 99% of the U.S. population. T-Mobile expects to make $40 billion in network investments over the next three years, and it plans to cover 90% of rural Americans with high-speed 5G services. 

In public comments and reply comments filed with the FCC and in other publications, including blogs, Free State Foundation scholars have described the pro-innovation, pro-investment, and ultimately pro-consumer benefits of the T-Mobile/Sprint merger. As we explained in those publications, the merger's closing will allow for a more rapid deployment of a nationwide 5G network that will pose a potent competitive challenge to AT&T and Verizon. More recently, T-Mobile's resounding victory in U.S. District Court over certain state attorney's general who challenged the merger on antitrust grounds was the subject of my Perspectives from FSF Scholars paper, "Court Affirms T-Mobile/Sprint Merger Will Speed 5G Deployment." 

Congratulations to T-Mobile on the closing of its merger and to its new CEO Mike Sievert. American consumers are now set for a big boost on 5G and a more innovative and competitive wireless market.

P.S. T-Mobile's 5G Fact Sheet for March 2020 can be found here.

Baltimore Sun Op-Ed Urging Veto of MD Digital Ad Tax

Today's edition of the Baltimore Sun features an op-ed that Free State Foundation President Randolph J. May and I wrote regarding the ill-conceived, and first of its kind, tax on digital advertising recently passed by the Maryland General Assembly.

In a blog post on March 13, we addressed the shortcomings of what at the time was pending legislation. An effort to generate additional revenues for education based upon a proposal conceived to discourage targeted advertising, Senate Bill 2 inappropriately singled out one form of commercial speech – digital, but not traditional – advertising, in violation of both specific federal law and the First Amendment.

It targeted large platforms (e.g., those that generate more than $100 million in annual gross revenues) with a tax ranging from 2.5 to 10 percent of annual gross revenues derived from "digital advertising services," unduly burdening interstate commerce – and implicating the Commerce Clause – by sweeping in revenues generated both in other states and globally.

And it relied upon an unworkable mechanism to determine when digital advertising is provided within Maryland's borders.

Nevertheless, on March 18, Maryland's legislature adopted an amended version of S.B. 2, House Bill 732. H.B. 732 responds to that last critique – S.B. 2's failure to identify accurately in-state digital advertising – by punting the question to a future rulemaking by the Comptroller. Otherwise, it suffers from all of the flaws we identified in S.B. 2.

The FSF op-ed, which urges Maryland Governor Larry Hogan to veto this misguided bill, can be found here. 

Free State Foundation President Randolph May and I will be participating in a Federalist Society teleforum to discuss themes from our new book Modernizing Copyright Law for the Digital Age – Constitutional Foundations for Reform. The book is available for purchase at Amazon and at Carolina Academic Press. 

The teleforum will take place on March 31 at 12 p.m. EDT. We are honored that Professors Adam Mossoff and Michael Risch will be joining us for the teleforum. Additional information is available at the Federalist Society's website. Call in and listen, and feel free to offer your own questions on copyright modernization reform to the teleforum panelists.