In late October, the Supreme Court quietly declined to review Lipschultz v. Charter Advanced Services, an Eighth Circuit decision that preempted state regulation of fixed Voice-over-Internet-Protocol (VoIP) service. While concurring in the denial of certiorari, Supreme Court Justice Clarence Thomas wrote separately to challenge the underlying theory of federal preemption, noting that “it is doubtful whether a federal policy — let alone a policy of nonregulation — is" sufficient to establish conflict preemption. Other than recent network neutrality efforts, states have generally avoided regulating information services precisely because of the Federal Communications Commission’s two-decade-long policy of nonregulation. Justice Thomas has challenged this dynamic — but importantly, his specific objection does not apply to the conflict preemption argument at issue in the state net neutrality cases. Justice Thomas’s primary objection is not a telecommunications law issue, but rather an administrative law one. Justice Thomas noted that because agency policies do not themselves determine rights or responsibilities, they are not “final agency action” sufficient to support a conflict preemption claim. 

Federal Communications Commission Chairman Ajit Pai intends to establish the 5G Fund, which would make up to $9 billion in Universal Service Fund support available to carriers to deploy advanced 5G mobile wireless services in rural America. This investment would be allocated through a reverse auction and would target hard-to-serve areas with sparse populations and/or rugged terrain. The $9 billion Fund also would set aside at least $1 billion specifically for deployments facilitating precision agriculture needs. The 5G Fund would replace the planned Mobility Fund Phase II, which would have provided federal support for 4G LTE service in unserved areas.

The Developing Innovation and Growing the Internet of Things Act (S. 1611) would require the Department of Commerce (DOC) to convene a federal interagency working group to report to the Congress on the Internet of things (IoT). The group would be required to identify laws and regulations that inhibit or promote IoT deployment, examine current and future federal IoT use, and recommend federal IoT security measures. Also under S. 1611 the Federal Communications Commission, in consultation with the National Telecommunications and Information Administration, would seek public comments on current and future spectrum needs to ensure adequate IoT connectivity and to report those findings to Congress.

Using information from the affected agencies, CBO estimates that implementing S. 1611 would cost $7 million over the 2020-2021 period for DOC to hire about 22 employees to convene the working group and to issue the mandated reports. Such spending would be subject to appropriation of the estimated amounts. CBO also expects that participating in the working group and completing the spectrum report would cost the FCC less than $500,000. The FCC is authorized to collect fees sufficient to offset the costs of its regulatory activities each year; therefore, CBO estimates that the net cost of those activities would be negligible, assuming appropriation actions consistent with that authority. If the FCC increases annual fee collections to offset the costs of implementing provisions in the bill, S. 1611 would increase the cost of an existing private-sector mandate on entities required to pay those fees. Using information from the FCC, CBO estimates that the incremental cost of the mandate would be small—less than $500,000—and would fall well below the annual threshold established in the Unfunded Mandates Reform Act (UMRA) for private-sector mandates ($164 million, adjusted annually for inflation). 

House Speaker Nancy Pelosi (D-CA) is pushing to strip out sweeping legal protections for online content in the new trade pact with Mexico and Canada, in what would be a blow for big technology companies. Internet firms lobbied hard to include the immunity language in the trade agreement, seeing it as a way to extend to Mexico and Canada the broad umbrella of legal protection they enjoy in the US. But the trade-pact language also could make it harder for Congress to withdraw the current federal online protections for internet firms in the future, some lawmakers fear. That is causing second thoughts about including the legal shield—regarded by tech firms as a pillar of the internet—in a trade pact.

The US House of Representatives has voted overwhelmingly to approve the bipartisan Telephone Robocall Abuse Criminal Enforcement and Deterrence (TRACED Act), a Senate bill (S. 151) that would crack down on unwanted robocalls. The vote was 417-3.  The bill has already passed the Senate so it now heads to the President's desk. Among other things, the bill would give the Federal Communications Commission civil fining authority of up to $20,000 per call for those who "intentionally flout" telemarketing restrictions. That could add up given that, by some estimates, spam calls make up over 40% of all calls. It would also extend the statute of limitations for taking action against illegal robocalls from one year to three.   The bill would help punish bad actors--the FCC could seek financial penalties for misleading calls--and verify good calls, said its backers. It would also require carriers to provide default blocking at no extra cost. 

Huawei is suing the Federal Communications Commission for choking off its sales in the United States, the latest in the besieged company’s widening efforts to hit back at regulators and critics across the globe. The FCC voted in November to bar American telecommunications companies from using federal subsidies to buy equipment from Huawei and another Chinese supplier, ZTE. Washington considers both firms to be national security risks. “The FCC claims that Huawei is a security threat. But FCC Chairman Ajit Pai has not provided any evidence,” said Song Liuping, Huawei’s chief legal officer. “The FCC’s order violates the Constitution, and we have no choice but to seek legal remedy.” Huawei filed its petition for review in the United States Court of Appeals for the Fifth Circuit, which covers the region that includes Huawei’s American headquarters in Plano, Texas. The company asked the court to hold the FCC’s order unlawful because the commission did not offer it due process protections before designating it a security threat.

Much like TaxWatch, one of the Federal Communications Commission’s chief priorities under FCC Chairman Ajit Pai has been to serve as a watchdog to identify and repeal bad regulations and learn from the lessons of the past. By eliminating regulations that impose unnecessary costs on the economy, our actions protect the American consumer, facilitate the deployment of new communications networks to connect distant communities, and help close the so-called “digital divide.” Now, the Communications Act envisions an important role for the states and municipal actors (like local utility and zoning boards) in regulating local communications networks. That is consistent with our long American tradition of federalism (or what in Catholic social thought  might be called “subsidiarity”), namely that states and localities, being closer to the people, ought to have a say on those issues that uniquely affect their own communities. But there are some issues of a national character that, when state and local governments either exceed their authority or act in their own narrow self-interest, it can actually be detrimental to the people they represent. That is often true in the communications space, where providers need to deploy regional and national networks that can crisscross up to fifty state, and thousands of municipal, jurisdictions. Conflicting state requirements or excessive aggregate state and local fees can prove fatal to a provider’s effort to deploy a new network—particularly smaller businesses who can’t afford to take on additional regulatory and litigation risk.  

States and localities have litigated heavily against the FCC whenever it has attempted to streamline regulations. Indeed, we are currently facing lawsuits from a number of localities in the federal court of appeals for the Sixth Circuit to cable franchise reforms. And with respect to our infrastructure reforms on excessive local fees and “shot clocks,” those are currently under review by the federal court of appeals in the Ninth Circuit. We feel confident that our actions are well supported by the law. But as we prepare for an ever more connected future, there is a lot more work to do. I plan to spend much of 2020 making sure that the FCC’s hard-fought reforms are upheld in court and continue to deliver value to Americans. I also look forward to continuing to work in good faith with our state and local partners and with groups like TaxWatch to identify areas in which we can make regulation simpler and smarter, for the benefit of everyone.