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Posts Tagged ‘FCC’
September 24th, 2018 at 9:40 am
The FCC Must Move to Stop the Local Internet Power Grab

More than thirty years ago, Congress gave local governments the power to impose “franchise fees” and other regulations on cable television service.  It was part of a broad framework for shared national and local authority over cable television in the 1984 “Cable Act,” which laid the foundation for the cable (and eventually satellite) TV boom of the 1980s and beyond.

By contrast, local governments have very limited power to tax or regulate the internet.  Unlike television, which has a long tradition of serving independent local markets with discrete programming, options, and infrastructure, from the beginning it’s been clear that the internet is inherently national and interstate and can only be effectively regulated at the federal level.  That has been core federal policy for decades, as most recently expressed in the 2017 Restoring Internet Freedom Order, which concluded that, “regulation of broadband Internet access service should be governed principally by a uniform set of federal regulations, rather than by a patchwork that includes separate state and local requirements.”

But recently, a number of local franchising authorities have tried to upend that federal policy and claim the right to impose local taxes and regulations on the internet by seizing on the fact that some broadband providers also offer cable television services.  Now, the Federal Communications Commission (“FCC”) is rightly working to put a stop to this local government internet power grab – moving to make clear that the Cable Act only allows local franchising boards to tax and regulate cable companies based on their cable television operations.

If every local franchising board in the country can impose its own rules and fees on internet providers, the freewheeling and open internet we all enjoy today will slowly grind to a halt.  The resulting cacophony of regulation will overwhelm operators, slowing down cyberspace and making it less reliable and less secure.  It will drive away new investment needed to continue to achieve ever-increasing speeds users have come to take for granted.  And it will confuse consumers who expect the internet to be a consistent experience everywhere they go.

This is the exact harm federal policy strives to avoid.  As the FCC explained, “allowing state or local regulation of broadband internet access service could impair the provision of such service by requiring each ISP to comply with a patchwork of separate and potentially conflicting requirements across all of the different jurisdictions in which it operates.”

For that reason, the FCC’s “Section 621 Proceeding” must move quickly to shut down the local power grab by making clear that neither the Cable Act nor any other source of local regulatory power authorizes franchise boards to tax or regulate the internet or any other non-cable-television businesses.

The future of the internet and our unfettered access depend on it.

May 18th, 2018 at 12:06 pm
Image of the Day: What Obama FCC Internet Regulation Did to U.S. Broadband Investment
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Inexplicably, the U.S. Senate this week narrowly moved to restore 2015 Obama Administration Federal Communications Commission (FCC) crony capitalist internet regulations.  Here’s the effect that Obama FCC regulation immediately had on mobile broadband investment.  It’s now the duty of the House of Representatives and the Trump Administration to kill this mindless Obama-era attempt to regulate the internet, and we encourage everyone to contact their Representatives and the White House to demand that action.

Neutering the Net

Neutering the Net

May 17th, 2018 at 9:32 am
CFIF Applauds Senator Mike Lee’s Introduction of the SMARTER Act of 2018
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ALEXANDRIA, VA – This week, Senator Mike Lee (R – Utah) introduced the Standard Merger and Acquisition Reviews Through Equal Rules (SMARTER) Act in the United States Senate.  Among other advancements, the SMARTER Act will address concerns that parties to a proposed merger or acquisition endure different injunction standards in court challenges, as well as different processes, depending upon which federal antitrust agency happens to be reviewing the transaction.

In response, Center for Individual Freedom (“CFIF”) Senior Vice President of Legal and Public Affairs Timothy Lee issued the following statement:

The Center for Individual Freedom applauds Senator Mike Lee on the introduction of the SMARTER Act of 2018.  Among other improvements, this bill includes key reforms to the flawed Federal Communications Commission’s (FCC’s) merger review process, including:  1) establishing a reasonable time limit for agency review to ensure fairer, more transparent and timely decisions, and 2) ending the ability to effectively kill transactions by designating them for hearing before Administrative Law Judges, instead requiring such cases to be litigated in federal court just as the Justice Department must when contesting proposed transactions.

CFIF urges quick Senate passage of the commonsense legislation.
March 16th, 2018 at 12:32 pm
Congress Must Prevent Crony Capitalism and Spending Waste in FCC Reauthorization
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As Congress considers reauthorization of the Federal Communications Commission (FCC), it must exercise extreme diligence to prevent it from becoming a vehicle for crony capitalism and waste of taxpayer dollars.

Currently, Congressional FCC reauthorization includes provisions that would reimburse broadcasters in spectrum incentive auctions, which could in turn be exploited to subsidize the upcoming ATSC 3.0 transition, as many had predicted.  By way of background, ATSC 3.0 refers to the upcoming transition to yet another new broadcasting standard, which will force over-the-air viewers to purchase new television sets or converter equipment at their own expense.  If that rings a bell, it’s for good reason.  That’s what occurred in recent years with the last conversion.

Here’s the problem.  Current provisions could constitute a blank check at taxpayer expense to broadcasters so that they could fund new equipment for the transition from the U.S. Treasury, as the legislation creates a new Treasury Fund in an undisclosed amount of money.  Although broadcasters ostensibly must direct the money they receive only toward costs associated with the spectrum auction, the likely scenario remains that the FCC will remain unable to detect and stop waste, fraud and abuse if the funds are used instead to upgrade their equipment in pursuit of ATSC 3.0.

Accordingly, it’s important that Congress not allow this legislation to become a wasteful open account for broadcasters to exploit for their own benefit at taxpayer expense.  At a minimum, they must establish greater safeguards to ensure that waste, fraud and abuse are not allowed, and that American consumers are not deprived of access to over-the-air TV access as a consequence of necessary installation of ATSC 3.0 transition equipment funded by taxpayers, whether in whole or in part.

To be clear, we welcome any and all technological and telecommunications advancement in this field, but we must also remain vigilant against the looming likelihood of crony capitalism and waste of taxpayer dollars in an era of growing deficits and debt.  Congress must therefore ensure that protections against those possibilities are incorporated into upcoming FCC reauthorization.

December 5th, 2017 at 12:26 pm
Image of the Day: Leftist Net Neutrality Illogic
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This actually captures the illogic among those who advocate tighter federal government control over the internet fairly well:

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Net Neut Illogic

Net Neut Illogic

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November 16th, 2017 at 11:21 am
FCC Should Preempt Individual State Attempts to Regulate the Internet
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Among the many positive changes within the federal government since the end of the Obama Administration and the arrival of the Trump Administration, perhaps none surpass those brought by the Federal Communications Commission (FCC) under new Chairman Ajit Pai.

And the most welcome and beneficial change undertaken by the new FCC is its action to rescind Obama FCC decisions to begin regulating the internet as a “public utility” under statutes passed in the 1930s for old-fashioned, copper-wire telephone service.  The Obama FCC’s action instantly began to stifle new broadband investment, and was subject to legal reversal.  The internet thrived for two decades under both the Clinton and Bush administrations precisely due to the federal government’s “light touch” regulatory policy, and there was simply no rational justification for reversing twenty years of success in the name of even more federal government regulation and crony capitalism.

As the new FCC approaches completion on restoring regulatory sanity to internet service, it’s important that it include a preemption against future state efforts to regulate the internet in the same way that the Obama FCC hoped to make permanent.  We at CFIF take a backseat to no one in terms of valuing America’s federalist system, and the ability of individual states to serve as “laboratories of democracy.”  But there’s an important limit, one that is specifically included in the text of the Constitution.  Namely, matters of interstate commerce.  Our Founding Fathers recognized, based upon  economic warfare that they’d witnessed under the Articles of Confederation, that individual states cannot act in ways that disrupt truly interstate commerce in ways that contravene federal policy.  Accordingly, the Constitution specifically and rightfully empowers the federal government to protect interstate commerce against destructive state interference.

And there are few, if any, sectors of our economy more “interstate” than the internet.  Indeed, the internet is interstate by its very nature.  Doug Brake of the Information Technology & Innovation Foundation summarized the logic well in a commentary this month:

National and regional networks should be subject to uniform rules to keep compliance costs low and reduce complexity.  To the extent the upcoming changes to net neutrality regulation see any changes in business practices, which would be more minor than many expect, a uniform policy that allows for broad scale would be an important benefit…   Network applications now depend on economies of scale independent of the individual state in which they are consumed.  Technological advances are simply erasing the importance of state and local boundaries.  It is in the national interest to give these technologies room to grow unimpeded by artificial borders.

As such, beyond simply declaring broadband an information service, the FCC should make clear that broadband policy is made at the national, not state, level.  Former Chairman Kennard put it well in a 1999 speech titled ‘The Unregulation of the Internet:  Laying a Competitive Course for the Future.’   There he laid out why it was ‘in the national interest that we have a national broadband policy … a de-regulatory approach, an approach that will let this nascent industry flourish.'”

That’s exactly right, and it’s no less true today than it was in 1999.  The internet needed room to grow then, and it needs room and regulatory predictability to continue growing as it plays a progressively important role in  our lives and globally competitive economy.

We cannot allow a spaghetti bowl of individual state regulations to inhibit future internet expansion and innovation, and the FCC should act to preempt that destructive possibility.

September 27th, 2017 at 12:02 pm
Net Neutrality “Day of Advocacy” – A Reality Check

Today, activist organizations, including Free Press, Public Knowledge and Fight for the Future, plan to descend upon Capitol Hill offices to underscore their disapproval of Federal Communications Commission (FCC) Chairman Ajit Pai’s proposed plan to repeal the Obama Administration’s 2015 “Open Internet Order” classifying Internet Service Providers (ISPs) as public utilities under Title II of the 1934 Communications Act.

In anticipation of their effort, the Center for Individual Freedom teamed up with the Taxpayers Protection Alliance to provide Congress with a “Reality Check” of key messaging and themes to expect from those groups as they visit with lawmakers.

Read the document here.

August 25th, 2017 at 4:57 pm
California’s Proposed “Internet Privacy” Bill Is Nothing of the Sort
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An unfortunate byproduct of life in a democratic system is that complex policy matters are often reduced to simplistic slogans, and politicians exploit attractive terms to peddle harmful proposals.

California offers a textbook example, where legislators are pushing something called the “California Broadband Internet Privacy Act” (A.B. 375) in the name of “protecting consumer privacy.”

The reality is far different.  In truth, the bill constitutes crony capitalism on behalf of some industries at the expense of others, and would stifle innovation and undermine rather than boost consumer welfare.

This battle was already fought and won at the federal level, when Congress employed the Congressional Review Act to rescind an Obama Federal Communications Commission (FCC) rule to the same effect.

Supporters of the proposed legislation will tell you that it’s necessary to protect consumers against internet service providers who seek to gather and sell private information.  In that vein, the bill would require that consumers “opt in” before service providers could use their data to improve service or tailor advertising to consumer preferences or needs.  Current law, however, already allows consumers to “opt out” from collection of non-sensitive data if they choose.  Notably, few consumers choose to do so, because that would interfere with their ability to enjoy more customized online service that they prefer.

It’s also important to note that current law also already requires that consumers “opt in” to allow access to particularly sensitive personal information.

So what the proposed law would do is impose a one-size-fits-all mandate that most customers currently don’t choose.

Secondly, the Federal Trade Commission (FTC) already possesses authority to protect consumers against privacy violations and punish improper data collection should it occur.  That’s how the system has worked for over two decades while the internet flourished like no innovation in human history.  And that’s why the FTC expressed opposition to this sort of “privacy” legislation at the federal level before it was quashed.  California’s attorney general is also empowered to investigate and seek legal remedy for “unlawful, unfair or fraudulent business acts or practices” under California’s Unfair Competition Law.

Even former Democratic California Congressman Henry Waxman observed that this type of law would “undermine beneficial uses of data” and “could result in tangible competitive and consumer harm.”

Another flaw in the bill is that it conspicuously exempts powerful content companies like Google, which obviously earn their billions by monetizing consumer data for purposes of advertising and sales.  Those content companies access customer personal information just as much as service providers, if not more.  After all, consumers tend to access the internet via different devices and networks, whereas they tend to use the same search engines (i.e., Google) and visit the same content sites.

Accordingly, the proposed bill amounts to crony capitalism benefitting one set of companies at the expense of another set.

California’s proposed law would create the additional problem of imposing burdens that other states don’t impose, thereby creating a “spaghetti bowl” regulatory effect for companies that offer nationwide products and services.

Online privacy remains a natural and important concern for consumers in California and across America.  But we must also beware politicians pushing laws that undermine consumer welfare, threaten the thriving internet sector and amount to crony capitalism by picking winners and losers in the marketplace.

August 23rd, 2017 at 10:20 am
Broadcasters’ “Next Gen” Proposal to FCC Would Cost Consumers
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The new Federal Communications Commission (FCC) has been one of the most consistently outstanding agencies of the Trump Administration in terms of restoring regulatory sanity after eight years of politicized abuse throughout the Obama Administration.

Unfortunately, the FCC remains under assault from groups seeking to leverage federal policy toward its own advantage, and continued vigilance is critical.

In just the latest illustration, broadcasters have begun pressuring the FCC to allow television stations to begin transmitting signals in a new “ATSC 3.0” format.  Also referred to as “Next Gen,” such a transition would impact every American consumer who watches television, and not necessarily for the better.  In addition to costing taxpayers, it could create a de facto federal mandate on television service providers.

First, the ATSC 3.0 format is incompatible with existing televisions and set-top boxes, meaning that Americans who wanted to simply continue watching television would have to purchase new equipment or join a pay-TV provider that had spent the time and money transitioning its equipment.  That, of course, would be a cost transferred to customers.

Second, the proposed transition could also mean weaker signals for consumers who choose over-the-air broadcast.  That’s because it would involve simulcasting from facilities with smaller or new coverage areas, placing rural voters in particular jeopardy.

Additionally, ATSC 3.0 could bring more dreaded blackouts, since broadcasters could seek to force pay-TV providers to carry ATSC 3.0 signals under threat of blackout (a tactic broadcasters have exploited in the past on behalf of such efforts as ratcheting up retransmission fees).  Accordingly, broadcasters can leverage their government-provided bargaining position to obtain higher fees for themselves via threat of consumer blackouts, which they’ll surely employ in their effort to force consumers and providers to purchase the new equipment necessary for reception.

That, of course, translates to higher costs for consumers, or giving up their favored programming altogether.

The better alternative is to let market forces work, by making the Next Gen transition wholly voluntary.  Broadcasters operate under an umbrella of government license, which allows them to hold consumers hostage in order to increase revenues.  Accordingly, the FCC should continue its good works by rejecting broadcasters’ attempt to leverage federal bureaucracy to achieve a new government handout to be subsidized by consumers.  Next Gen should be a truly voluntary standard that doesn’t leave consumers holding the bill for the broadcasters’ innovation.

May 18th, 2017 at 12:35 pm
CFIF Applauds FCC Vote to Advance NPRM to Restore Internet Freedom
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ALEXANDRIA, VA – Today, the Federal Communications Commission (“FCC”) voted to advance a Notice of Proposed Rulemaking (NPRM) on the “Restoring Internet Freedom” proposal championed by Chairman Ajit Pai and Commisser Mike O’Reilly that would return federal internet regulatory policy to the light-touch approach that prevailed from the 1990s onward, until the Obama Administration FCC moved to reclassify the internet as a “public utility” in 2015.

In response, Center for Individual Freedom (“CFIF”) Senior Vice President of Legal and Public Affairs Timothy Lee issued the following statement:

“Beginning in the 1990s, the internet flourished and transformed our world like no innovation in history for a simple reason:  Administrations of both political parties over two decades, beginning with Clinton/Gore, wisely chose a ‘light touch’ regulatory approach to the internet.

“Then in 2015, the Obama Administration FCC suddenly and radically reversed two decades of bipartisan consensus by moving to reclassify internet service as a ‘public utility’ under laws enacted in 1934 to regulate old-fashioned copper-wire telephone service.

There was no justification for that sudden reversal, and it was not based upon evidence, law or logic.  The internet obviously wasn’t ‘broken’ or in need of heavy-handed federal regulatory ‘fix.’  It was merely a scheme to extend government control over yet another sector of our economy.

“Nor was reclassifying the internet as a ‘public utility’ something the American public supports.  A recent Morning Consult survey confirms that an overwhelming and bipartisan 78% of voters prefer little or no government regulation of the internet, with only 12% favoring a heavy-handed regulatory approach.  A broad 51% to 33% majority believes that the internet shouldn’t be regulated as a public utility, and a two-to-one majority agrees that regulating the internet as a utility slows innovation and decreases private tech investment.

“Unfortunately, the Obama Administration FCC’s decision to reclassify the internet as some sort of Depression-era ‘public utility’ had immediate negative consequences, confirming the public’s expectation.  Domestic broadband capital expenditures declined by 5.6%, or some $3.6 billion, which marked the first time that such investment declined outside of a recession during the internet era.  That applied to both large and small internet service providers.

“Proponents of heavy-handed internet regulation continue to employ irrational scare tactics and hyperbole in their effort to regulate the internet more heavily, but their claims are contradicted by straightforward history and logic.  All reasonable people agree that the internet should remain free and open, which was how the internet operated for two decades across administrations of both parties under the light-touch regulatory approach.

“Accordingly, today’s FCC vote simply advances the ball to restore the bipartisan, light-touch regulatory consensus that existed for more than two decades.  This is precisely the sort of common sense that is badly needed in Washington, and CFIF applauds FCC Chairman Pai and Commissioner O’Rielly for moving to restore the regulatory wisdom that the American public overwhelmingly prefers.”

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May 17th, 2017 at 11:41 am
Former FCC Commissioner: “The FCC Gets Set to Free Wireless”
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In today’s Wall Street Journal, former Federal Communications Commission (FCC) commissioner Robert McDowell offers a timely and instructive commentary entitled “The FCC Gets Set to Free Wireless,” in which he explains the important work by new FCC Chairman Ajit Pai:

The Federal Communications Commission this month is launching initiatives that will shape the fate of America’s wireless industry.  Last week it started to examine competition in the market, and this week it will propose taking Depression-era utility regulations off mobile broadband while protecting an open internet.  This is only the beginning.  The FCC is acting on a rare opportunity to correct its recent mistakes and restore the Clinton-era light-touch regulatory framework that will drive economic growth and job creation.”

As we at CFIF have detailed, the internet flourished over two decades like no other innovation in human history, precisely because of the light-touch regulatory approach started under Clinton as McDowell notes, and continued through the Bush Administration.  But in 2015, Obama’s FCC under former Chairman Tom Wheeler decided to “fix” an internet that wasn’t broken by regulating it as a “public service” under the 1930s copper-wire telephone laws that McDowell references.  As Chairman Pai recently noted, domestic broadband capital expenditures fell for the first time ever outside of a recession.

McDowell notes how the mobile industry experienced “an explosion of entrepreneurial brilliance,” incredible innovation in just a few short years, massive investment, falling consumer prices (25% in the past decade) and arrival of the app economy.  Importantly, he highlights that, “Three quarters of the companies in the global app economy are American.”  Unfortunately, the Obama FCC’s rush to commandeer yet another sector of the U.S. economy imposed an unnecessary threat to that innovation:

Yet since 2009, the FCC has ignored its own studies and refused to determine that the market is competitive. That would have contradicted the rationale for its regulation binge, but new political and market realities make a fresh start possible.”

Fortunately, new leadership under Chairman Pai offers the opportunity to correct that mistake before the harm intensifies:

The FCC should begin by liberating wireless from the heavy-handed rules of a 1934 law called Title II, which was created when phones were held in two hands.  This antiquated law imposes powerful economic regulations on the internet, chilling investment in broadband.  On Thursday the FCC will propose to unshackle the net from this millstone of a law.  This would restore the bipartisan light-touch policies that nurtured the burgeoning internet Americans enjoy today.”

It’s unfortunate that a federal bureaucracy decided in its wisdom that regulating the thriving internet as a “public utility” under a 1934 law was a good idea in the first instance.  But as McDowell cheerfully notes, the opportunity to prevent further harm and restore the innovation and investment that characterized internet service for over two decades is here.  For that we should thank Chairman Pai and support his common-sense restoration of regulatory sanity at the FCC.

May 12th, 2017 at 1:02 pm
Poll: Americans Overwhelmingly Favor FCC Chairman Pai’s “Light Touch” Internet Regulatory Approach
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Activists advocating heavy-handed internet regulation of the type pushed by the Obama-era Federal Communications Commission (FCC) pretend that they’re the ones crusading on behalf of everyday consumers.  The reality is that the internet flourished as no innovation in human history precisely because both the Clinton Administration and Bush Administration maintained a “light touch” regulatory stance from the FCC.

But then in 2015, the Obama Administration decided that it must “fix” an internet that wasn’t broken, through a narrow party-line FCC vote to regulate internet service as a “public utility” under 1930s laws enacted for copper-wire telephones.

The result:  internet infrastructure investment fell for the first time ever outside of an economic recession.

Fortunately, new FCC Chairman Ajit Pai is restoring common sense by returning internet regulation to the “light touch” approach that worked for two decades and under Clinton and Bush.

Now there’s more good news, highlighted by the good folks over at the Institute for Policy Innovation (IPI).  According to a new Morning Consult survey, Americans overwhelmingly favor a light-touch FCC regulatory approach toward internet service:

–  By an overwhelming 78% to 12% margin, voters support the government having little or no regulation of the internet, with 53% supporting a ‘light touch’ and 25% asserting that the government should not regulate the internet at all.

–  By an 18-point margin (51% versus 33%), voters say the internet should not be regulated as a public utility.

–  By a two-to-one margin, voters believe regulating the internet as a utility would slow innovation and decrease private tech investment.

–  Support for light-touch regulation is bipartisan, including 55% of Democrats, 52% of Republicans, and 52% of Independents.  Perhaps surprisingly, 21% of Democrats favor NO government regulation of the internet, along with 27% of Republicans and 26% of Independents.”

Chairman Pai is demonstrating admirable courage and leadership in restoring regulatory sanity at the FCC, and it’s always encouraging to confirm that the American electorate agrees with him.

March 22nd, 2017 at 5:48 pm
Congress Making Good On Rescinding Rogue “Privacy” Regulations Rammed Through by Obama’s FCC
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Among the myriad missteps and abuses of the Obama Administration, its habit of rogue lawmaking through unelected administrative agencies rather than the deliberative democratic process was perhaps the worst.  Even the most liberal Supreme Court justices on several occasions agreed, striking down Obama Administration regulatory impositions by unanimous votes.

And perhaps no federal agency represented that lawlessness and impropriety better than the Federal Communications Commission (FCC).

Last year as the clock began to expire on the Obama era, the FCC moved to impose new “privacy” regulations upon private Internet Service Providers (ISPs), upon which Americans rely to access the internet.  Those regulations actually did nothing on behalf of consumer privacy, or to prevent online data collection practices used profusely by other entities throughout the Internet economy that the Obama Administration favored.  Instead, the regulations served to constrict development of new business practices and distort the robust digital marketplace, while picking winners and losers.

Additionally, those FCC regulations circumvented the Federal Trade Commission’s (FTC’s) superior expertise in this field by encroaching upon its existing regulations upon which the Internet economy had relied for years.  The FTC’s proven framework protected consumers for decades, while obviously allowing the Internet to flourish as it did.  But the FCC went rogue, insisting on inserting itself into more areas of American consumers’ daily lives, and disrupting a robust marketplace with a “solution” where no problem existed.

Fortunately, Congress is set to act by rescinding the Obama FCC’s ill-advised regulation.  The Congressional Review Act (CRA), which was enacted as part of the Contract with America reforms, allows Congress to rein in rogue administrative agency regulations and prevent future agencies from reimposing them in the future.  It remained an ineffective tool when the threat of an Obama veto loomed, but with Donald Trump now in the White House, Congress has begun using the CRA to rescind costly and improper regulations.

Now, the Senate stands ready to eliminate the Obama FCC’s destructive last-hour “privacy” regulation this week.

And they can use your help.

Contact your Senators and tell them to put the CRA to use and rescind the FCC’s rule.  The best way to protect privacy and strengthen the internet economy is to build from the successful and established framework established by the FTC, not the Obama FCC’s scheme.

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December 2nd, 2016 at 4:24 pm
ATSC 3.0: What Could It Mean for American Consumers?
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Next month’s arrival of a new Trump Administration, alongside a Congress ready to hit the ground running, promises a flurry of corrective activity after eight years of Barack Obama.

However, Americans should remain vigilant against regulatory mischief that some are trying to push through unnoticed at the outset of the new Administration and Congress.

Exhibit A:  An effort by broadcasters to convince Obama’s Federal Communications Commission (FCC) to approve an entirely new broadcast television standard known as ATSC 3.0.

In a nutshell, the ATSC 3.0 standard amounts to yet another new federal action upon a private marketplace and a handout to a favored industry that could inflict significant and unnecessary costs, ultimately to be paid by consumers.

Under current law, cable and satellite television providers must carry local television stations, so the regulatory scales are already tipped in broadcasters’ favor.  The proposed new mandate could extend the scope of providers’ obligations requiring them to transmit broadcast signals in the new standard to the public.

As a result, consumers who currently receive local stations over the air or via cable or satellite providers suddenly would face the possibility of incurring the cost of new equipment in order to receive the new signal, as current equipment does not support the new standard.  Obviously, millions of consumers who are already struggling to make ends meet could thus be forced to pay – whether through higher monthly subscription fees or direct charge – for new equipment for a “benefit” that may not be needed or even desired.

Satellite and cable providers could also face technological hurdles to accommodate the new standard, which could inevitably lead to additional costs and quality assurance issues.  Ultimately, subscribers could have to pay those costs and endure those potential technological glitches as well.

Keep in mind that all of these costs and changes could be imposed without a sober cost/benefit analysis from the FCC.  It’s precisely the sort of hasty, top-down, crony capitalist federal regulatory action that has tested the limits of American tolerance over the past decade.

Technological advance is a good thing, whether in the TV market or elsewhere.  But that’s something that should occur as the result of market forces, not through fast-tracked federal regulatory action riddled by too many uncertainties.

September 30th, 2016 at 11:49 am
Positive News: FCC Delays Vote on Toxic TV Set-Top Box Scheme
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Good news within the federal regulatory leviathan has been depressingly rare, perhaps most of all at the Federal Communications Commission (FCC).  This week, however, brought a remarkably welcome development worthy of celebration.

Specifically, the FCC delayed its vote on a toxic and entirely unwarranted new proposal to regulate cable television set-top boxes before the Obama presidency’s clock expires, in what The Wall Street Journal labeled “a major blow to the proposal” and “a setback to Federal Communications Commission Chairman Tom Wheeler on one of his top priorities for the year.”

Even Democrats have attacked the scheme as a “massive new federal regulation,” and CFIF stands alongside a broad coalition of conservative and libertarian organizations in opposition.  The initiative from the overactive FCC seeks to impose a one-size-fits all mandate to make cable TV set-top boxes artificially compatible with third-party entertainment devices.  So even while cable companies themselves progressively and voluntarily move toward abandoning traditional cable boxes in favor of devices owned and maintained by individual customers as they prefer, Chairman Wheeler hopes to impose a 1990s-style regulation upon the industry.  That would essentially freeze in place the increasingly outdated model of set-top cable boxes that is already becoming an anachronism due to market forces.  Exacerbating matters, the proposal reeks of crony capitalism, as CFIF has highlighted.  The proposal is a confluence of regulatory overreach, technological sclerosis and crony capitalism.

Fortunately, this week’s decision within the FCC to delay a vote due to Wheeler’s apparent inability to persuade fellow Democratic Commissioner Jessica Rosenworcel to his side provides a rare victory against years of FCC regulatory onslaught.  Although the bipartisan consensus among consumer groups, Congress, the innovation community and market participants must remain vigilant because the battle isn’t over, it’s welcome news worthy of note and celebration.

August 12th, 2016 at 3:43 pm
Appellate Court Rejects FCC’s Government Broadband Effort
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In this week’s Liberty Update, we highlight a humiliating new legal defeat for the Obama Administration in its continuing effort to evade legal reckoning for political persecution by the IRS.  Now, there’s yet another major court loss to report, this time against Obama’s overactive Federal Communications Commission (FCC).

Specifically, the Sixth Circuit Court of Appeals this week rejected FCC attempts to preempt individual state laws aimed at fostering private broadband innovation and growth.  For years, the Obama Administration has sought to encourage cities across the country to enter the broadband marketplace, thereby undermining private enterprises in the same business.  As CFIF has explained in our ongoing efforts to fight that effort, municipal broadband networks (otherwise known as government-owned networks or “GONs”) end up costing much more to build out and maintain than government officials expect or admit.  Moreover, consumers often pay 20% to 50% higher monthly bills than they would with private broadband providers.  It’s therefore no surprise that approximately 75% of GONs fail to realize a profit, causing many cities to fall even deeper into debt and end up selling their GONs at enormous losses.  The unfortunate experience in Provo, Utah provides a textbook illustration. Municipalities across America have better ways to spend taxpayer dollars than entering into competition against private broadband providers, not least because those private enterprises have invested $1.5 trillion in broadband infrastructure and continue to do so.

In order to shoehorn publicly-owned broadband through, Obama’s FCC resorted to infringing on individual state sovereignty by attempting to preempt state and local laws prohibiting these municipal boondoggles.  In other words, it attempted to govern how states could legislate within their own borders.  But the Sixth Circuit was having none of it.  The FCC order, it held, “essentially serves to reallocate decisionmaking power between the states and their municipalities.”

So mark down another embarrassing court defeat for the Obama Administration as it attempts to occupy as many sectors of the private economy as it can before time runs out in five months.

August 8th, 2016 at 12:07 pm
U.S. Copyright Office Joins Broad Criticism of FCC’s Destructive Cable Set-Top Box Proposal
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CFIF and other conservative and libertarian groups strongly oppose a new proposal from Obama’s overactive Federal Communications Commission (FCC) to regulate cable television set-top boxes, and that opposition is widely shared among a bipartisan Congressional coalition and even the political left.

Now, even the U.S. Copyright Office has joined the voices criticizing the FCC’s misguided proposal:

The U.S. Copyright Office criticized a federal agency’s plan to open up the market for pay-TV set-top boxes in a letter to lawmakers on Wednesday.  The letter adds political pressure on Federal Communications Commission Chairman Tom Wheeler, who has been pushing since the beginning of the year for new FCC rules to open up the market for the costly set-top boxes…  ‘As currently proposed, the [FCC] rule could interfere with copyright owners’ rights to license their works as provided by copyright law.’  That is because those who create programming, and hold the copyright on it, have negotiated specific deals with cable companies, and those deals could be upended if other companies also obtain access to the programming through their own set-top boxes.  The letter adds that the Copyright Office is ‘hopeful that the FCC will refine its approach as necessary to avoid conflicts with copyright law and authors’ interests under that law.'”

It’s pretty damning and humiliating that even a counterpart executive branch agency raps the highly-politicized FCC across the knuckles in such an open manner.

Nevertheless, it’s a welcome rebuke against the FCC’s proposal, which constitutes a 1990s-vintage, one-size-fits all mandate to make cable TV set-top boxes artificially compatible with third-party devices.  It additionally constitutes transparent crony capitalism, threatens consumer privacy, undermines the creative community and damages property rights by facilitating piracy of creative content.  And technologically speaking, the set-top box proposal freezes in place an outdated set-top box business model that private innovation and technological advance are already leaving in the dust, with cable companies and other entertainment industry entrepreneurs already abandoning traditional cable boxes in favor of apps and other devices owned and guided by individual consumers.

Hopefully, the Copyright Office’s welcome input helps drive a well-deserved nail into the proposal’s metaphorical coffin.

June 14th, 2016 at 6:13 pm
Divided Court Allows FCC to Use Law Intended to Reduce Internet Regulation to Increase Internet Regulation
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Like most Americans, you probably had no idea that the Internet was somehow broken and in need of an Obama Administration “fix” via a Depression-era federal statute enacted for copper wire telephone technology.

And with good reason.  For two decades, America’s tech and Internet sectors have remained among the depressingly few areas of our economy that continued to flourish amid an era characterized by stagnating growth, employment and incomes.

Throughout the Obama tenure, however, his Federal Communications Commission (FCC) has attempted over and over to upend the “light touch” regulatory approach of both Democratic (Clinton) and Republican (Bush) administrations that allowed the Internet to flourish as it has.  Today, unfortunately, a sharply divided D.C. Circuit Court of Appeals finally affirmed the FCC’s most recent attempt to impose so-called “Net Neutrality” regulations that essentially equate to ObamaCare for the Internet.

As aptly summarized by Senior Circuit Judge Williams’s dissent, today’s decision allows FCC “use of an Act intended to ‘reduce regulation’ to instead increase regulation.”

Judge Williams cogently captured not only the legal illogic of the majority’s holding, but its real-world unintended consequences as well:

“The ultimate irony of the Commission’s unreasoned patchwork is that, refusing to inquire into competitive conditions, it shuns broadband service onto the legal track suited to natural monopolies.  Because that track provides  little economic space for new firms seeking market entry or relatively small firms seeking expansion through innovations in business models or in technology, the Commission’s decision has a decent chance of bringing about the conditions under which some (but by no means all) of its actions could be grounded – the prevalence of incurable monopoly.”

Fortunately, this doesn’t end the question.  The ruling will likely be appealed, and the FCC’s mismanagement can be corrected via Congressional action or new FCC leadership in a future presidential administration.

But beyond the specific issue in question, today’s unfortunate ruling illustrates again the importance of judicial branch appointments and composition as we approach the election of a president who will make those appointments.

use of an Act intended to “reduce regulation” to
instead increase regulation
May 25th, 2016 at 12:22 pm
Former Clinton Administration Official Rips FCC’s Set-Top Box Proposal as “Massive New Federal Regulation”
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Alongside nearly every other conservative and libertarian organization of which we’re aware, CFIF opposes a toxic and wholly unnecessary new proposal from the Obama Administration’s Federal Communications Commission (FCC) to regulate cable television set-top boxes before the clock runs out on the Obama presidency.

But opposition extends across the political spectrum.  In today’s Wall Street Journal, former Clinton Administration Undersecretary of Commerce Ev Ehrlich excoriates the FCC’s proposed set-top box regulation for what it is — a crony capitalist, purloining, invasive, already-obsolete, anti-competitive, “massive new federal regulation”:

The Federal Communications Commission wants you, the consumer, to allow a new set-top box into your home that rearranges the programs you buy and inserts new advertising while tracking what you watch.  Movie studios, labor unions and civil rights groups all oppose it.  Why?  Because this ‘All-Vid’ proposal isn’t about the box fees the senators-turned-lobbyists decry.  Instead, it’s all about appropriating content.  Google and Amazon want to capture, repackage and profit from TV programming in their own competing services without having to pay for it…

If Google, Amazon or anyone else wants to build a better set-top box, they can do so the way these services have – in a way that respects federal privacy laws and negotiated licensing agreements with program producers.  Or they can actually license the content from creators, the way everybody else does, as opposed to demanding a gift from a captive FCC.”

Mr. Ehrlich gets it exactly right.

As we have stated, there is simply no realm of American life today that manifests badly-needed innovation, consumer choice, quality, affordability and sheer enjoyment than the video entertainment sector.  The variety and excellence of today’s video choices continues to expand at breakneck speed on (literally) a daily basis.  We therefore ask officials at all levels of government, as well as our 250,000 supporters and activists across the country, to oppose what Mr. Ehrlich rightly describes as a looming federal atrocity.

May 17th, 2016 at 11:04 am
Welcome to the Age of Asymmetrical Regulation
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We are fortunate to live in what many have called the “Golden Age of Television,” a time when an explosion of creativity and innovation have collided to create more audience choice than ever before.

In light of that, the Federal Communications Commission’s (FCC’s) recent decision to “Unlock the Box” with their “AllVid” proposal seems especially puzzling.  Upon further reflection and considering the bigger picture, however, the misguided AllVid proposal regarding technology that is already antiquated and will soon  be entirely irrelevant is merely the most recent in a string of illogical and counterproductive proposals from the current FCC.

From the so called AllVid proposal to the FCC’s Privacy proposal, it is evident that we live not only in the “Golden Age of Television,” but also in the “Age of Asymmetrical Regulation.” Current regulations impose one set of rules upon incumbents in the telecommunications industry and another set of rules entirely for so-called  “edge” providers like Google. In fact, regulation under this FCC seems to deliberately create a crony capitalist environment where incumbents can’t compete and the edge providers alone can thrive.

Equally troubling is the abnormally notoriously close relationship between Google and the White House, a partnership that was extensively detailed in a recent piece in The Intercept. Not only did Google’s top lobbyist visit the White House 128 times, but during the company’s annual State of the Union YouTube interviews with the President, Google is reported to have planted questions on policy issues important to Google on at least 3 occasions. That conspicuous degree of access and flagrant favoritism suggests that it has contributed to the severely asymmetrical regulation that we continue to witness from this FCC.

Again and again we have seen examples of this type of successful rent-seeking behavior from Google, and their ilk, and the remedy is clear: the FCC must stop its transparent favoritism and heavy-handed regulation of the telecommunication incumbents.  Instead, it should focus on maintaining a level playing field. Regulating based on crony capitalist bias and personal friendship is not only wildly inappropriate, but also a recipe for interventionist disaster. Continuing to disproportionately impose destructive regulations on the telecommunications for the benefit of other favored sectors not only violates the rights of disfavored enterprises, it ultimately serves to stifle competition and innovation for years to come in same the way that all government interventions into the free market tend to do.