American Enterprise Institute

[Commentary] Network neutrality is not a First Amendment issue — or at least, not in the ways supporters suggest.

As any first-year law student knows, the First Amendment says that “Congress shall make no law…abridging the freedom of speech.” The Fourteenth Amendment extends that prohibition to state governments as well. But with rare exceptions not applicable here, the Constitution does not similarly restrict private entities. This limitation, called the “state action doctrine,” is why the New York Times is not compelled to print every letter I write — and why I am not required to let any student speak whenever he or she wishes in my classroom, or my office, or at my dining room table. Simply put, a non-governmental entity may take actions that interfere with a speaker’s desire to communicate a message — and if it does so, the First Amendment is not implicated.

By leaning on the First Amendment, the progressive left suggests that net neutrality is about suppression of speech. Under this framework, the big threat is broadband providers inhibiting access to controversial websites or sites with which they disagree. But such actions are unlikely. The FCC cited no evidence of a broadband provider engaging in such behavior during the two decades before the net neutrality rules went into effect. And any company foolish enough to take such action would be pilloried in the press. In reality, net neutrality is about the more mundane question of vertical integration.

[Lyons is an associate professor at Boston College Law School]

[Commentary] Fake news has become a cause célèbre and fighting it has attracted some powerful players. Facebook just launched its “disputed” tag for possible fake news, and Google has promised to also go on the attack. But can current tech firms really stop or even slow down fake news? Probably not. Frankly, these firms’ business models enable the economic engine that powers fake news, and the demand for a social media site’s version of the truth is probably quite low.

The key to combating fake news probably lies in creating an economic engine that is more powerful than the one that drives fake news. Since costs are already minimal, the engine would have to give consumers more value. Sounds like we need a disruptive innovation, which is what new tech businesses are all about.

[Jamison is the director and Gunter Professor of the Public Utility Research Center at the University of Florida. He is also on the FCC Transition Team for President Trump.]

[Commentary] Congressional oversight and a necessary Federal Communications Commission reauthorization can assist to right the balance and ensure that the FCC focuses on the public interest. Interestingly, the groups that demonize Chairman Pai are also the same ones calling for regulatory solutions over market-oriented ones, specifically the regulation of broadband under common carriage rules from the 1930s. The groups are invested in realizing a nationalized broadband network instead of private provision, and Title II is essential because it could allow taxes to be levied on all Americans’ broadband subscriptions to support subsidies to municipal networks in specific areas.

Consumers who believe that a competitive market is a better protection for their desires should favor the solution which best leads to competition rather than the regulator picking winners.

[Layton is a PhD Fellow at the Center for Communication, Media, and Information Technologies (CMI) at Aalborg University in Copenhagen, Denmark.]

[Commentary] Today’s internet has transformed media and delivered prodigious value to consumers in entertainment, ecommerce, and personal productivity. Yet the next waves of the internet will extend to new industries in the physical world, delivering a far greater variety of services and requiring connectivity that is even faster, more ubiquitous, and more robust than today. To drive and accommodate this embrace of information by the real economy, we’ll need something bigger and better than the internet. We’ll need the “exanet.”

If the first several decades of internet were based on interoperability through digital packet switching and expanded capacity via fiber optics and broadband, the next phase will (in addition to continual capacity additions) focus on ubiquity, latency, reliability, application diversity, and security.

[Swanson is president of Entropy Economics LLC]

There are literally millions of consumer complaints about robocalls, a doubling over the last 5 years, but just a few thousand about network neutrality. That the Federal Communications Commission has focused on net neutrality and allowed robocalls to grow worse seems patently anti-consumer. Fortunately the new Republican-led FCC is poised to address what consumers actually care about rather than a crony capitalist agenda of pseudo consumer protection.

[Roslyn Layton is a PhD Fellow at the Center for Communication, Media, and Information Technologies (CMI) at Aalborg University in Copenhagen, Denmark. She is also a member of the Trump Administration’s FCC Transition team.]

[Commentary] Count yourself unlucky if you are a US telecommunications customer, because you have been funding a system that is far behind international standards.

It is time for the US to catch up with the rest of the world class for subsidizing broadband, especially if taxpayer money is on the line. International best practice carefully identifies areas where service is not commercially viable, requires service providers to compete for subsidies, and holds subsidy recipients accountable for results. Best practice begins with identifying smart subsidy and true access gap zones. The smart subsidy zone is those rural or high cost areas and low-income population groups for whom service is not commercially viable absent a one-time subsidy for initial investment. The true access gap consists of similar areas but with the added requirement that service isn’t commercially viable without an ongoing subsidy for operating expenses and maintenance. Competition for subsidies ensures that money isn’t wasted. Competition within a market tends to give the best results for customers, but this competition isn’t feasible in smart subsidy and true access gap zones. So the next best solution is competition for the market.

[Jamison is the director and Gunter Professor of the Public Utility Research Center at the University of Florida. He served on the FCC Transition Team for the Trump Administration]

[Commenatary] Several misconceptions about the Open Internet rules are in circulation...this blog post is a first stab at dispelling the most problematic issues:
The Open Internet Order is not a First Amendment issue: Sen Patrick Leahy (D-VT), Sen Richard Blumenthal (D-CT), and Public Knowledge President Gene Kimmelman all suggested that the Open Internet Order is a First Amendment issue. It is not. The First Amendment prevents the government from infringing upon freedom of speech. The Federal Communications Commission’s Open Internet Rules are not designed to curb government limits on speech, so the First Amendment rights of speakers are simply not implicated.
Repealing Title II reclassification is not the same as eliminating the Open Internet.
The Open Internet Order does not protect against higher prices.
The ultimate answer lies with Congress.

[Daniel Lyons is an associate professor at Boston College Law School]

[Commentary] What would happen if the US Department of Energy decided to help low-income households afford solar power by giving money to companies which report that they lease solar panels to these households? In all likelihood, fraud would be a difficult and costly problem, and solar companies would benefit more than the households. Despite the obvious flaws of a system where companies receive money based upon their service claims, this is essentially how the Federal Communications Commission’s Lifeline program works: Telecommunications companies receive money based upon how many households they claim as Lifeline customers. There is a better way — a direct subsidy would be more beneficial to low-income households. If the Lifeline program were ended at the federal level, states would likely need to change their systems as well. That would be complicated, but it is time to get telephone companies and telephone regulators out of the business of public assistance, leaving it to government agencies that are designed to be experts in that field.

[Jamison the director and Gunter Professor of the Public Utility Research Center at the University of Florida. He is also part of the Trump Administration’s FCC Transition team]

[Commentary] Feb 8 is the 21st anniversary of the 1996 Telecommunications Act. It’s an opportunity to to review the Act for its relevance to the converged world of communications, content, and computing. Indeed, updating the Act enjoyed wide support three years ago, when a broad array of stakeholders participated in the House Commerce Committee’s “#CommActUpdate” process through a series of thought papers on regulatory modernization, spectrum policy, competition, interconnection, universal service, and video content and distribution.

This rational, inclusive, and orderly process collected hundreds of substantive responses until it was hijacked by advocacy groups which aimed to nationalize networks by reclassifying broadband network providers under Title II of the Telecommunications Act. This was a beginning step by the FCC to tax and regulate the internet like the telephone network and to limit free speech, which fortunately has been halted by a backlash of 60 million voters against over-regulation.

[Rosyln Layton is currently aiding with the FCC transition, and is a PhD Fellow at the Center for Communication, Media, and Information Technologies (CMI) at Aalborg University in Copenhagen, Denmark]

[Commentary] There seems to be a growing consensus that the Federal Communications Commission’s structure is outdated and hinders its work. What should be done? Implement a structure that moves away from antiquated silos — wireline, wireless, and media — to one that reflects the dynamic digital ecosystem and that empowers sound analytical work. The existing structure limits how people think, encourages regulations that limit innovation, and facilitates industry capture.

To return the US to a position of world leadership, guiding principles for our policies should include: 1) Any person should have the right to purchase communications services from anyone else at any time (i.e., no entry restrictions for network, functions, applications, and content); 2) Anyone should be allowed to provide any communications service using any legally placed and acquired technologies (i.e., no technology restrictions); and 3) No government activity or regulation should provide a uneconomic favored position to any provider (i.e., no distortion of customer-led markets).

A new structure would include a bureau of economics that analyzes markets and conducts regulatory impact assessments, a bureau of engineering that assesses technologies and is responsible for radio spectrum and equipment licensing, a competition bureau that enforces rules that protect liberal markets, and a consumer protection bureau. The first two bureaus are all about analysis, and the latter two are all about enforcement, with the engineering bureau playing a significant enforcement role with respect to radio spectrum and equipment. Effective leadership will be needed to address the adaptive challenges of letting go of long-held traditions and embracing new values of rigorous analysis, political and industry independence, transparency, etc. Congress will need to act to focus the agency on ex ante regulation only in the presence of monopoly and on managing scarce resources (such as radio spectrum and funds for universal service) consistent with dynamic and competitive markets.

[Jamison is the director and Gunter Professor of the Public Utility Research Center at the University of Florida – and a member of President Trump’s FCC Transition team]