American Enterprise Institute

[Commentary] Now that the White House, Congress, and the Federal Communications Commission (FCC) are getting serious about rural broadband deployment — in contrast with the past eight years — it is time to develop strategies that actually make positive impacts.

Policies for rural broadband have seemed random the past eight years: billions of stimulus dollars were thrown at unneeded and failed projects, the FCC expanded failing systems like Lifeline, the Obama White House and the FCC moved to limit the profitability of rural broadband, and the FCC chose an arbitrary definition for broadband. These failed policies wasted billions of dollars and did little to help rural communities gain broadband connectivity. It is time to let markets lead the way.

Localities often have zoning, permitting, and other regulations that make broadband deployment costly, and procedures vary from location to location. This multiplies the complexity of planning and permitting and adds costs. There is a need to streamline permitting processes, promote nondiscriminatory access to conduits and poles, facilitate infrastructure sharing, and eliminate unnecessary post-construction cleanup requirements.

Restrictions on how broadband providers can generate revenue constrain broadband expansion by limiting profitability. The FCC’s net neutrality restrictions are an example. Broadband service providers in targeted rural areas could also be allowed to charge content providers for access to customers, perhaps making it profitable to provide broadband access without a subsidy.

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

[Commentary] Kudos to the House Commerce Committee’s for its recent hearing on Broadband: Deploying America’s 21st Century Infrastructure. The session demonstrated different views on how and to what degree the government should be involved in broadband deployment, but it also exposed policymakers’ assumptions on broadband and showed what information is missing from the discussion:
Flawed Assumption 1: Government subsidies for broadband will create economic growth.
Flawed Assumption 2: Private providers are failing in their investments.
Flawed Assumption 3: Government should adopt a broadband speed target.
False Assumption 4: The quality of mobile coverage is a function of the network.
False Assumption 5: There is no business case for investment.

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

[Commentary] To consumers, an Internet service provider using customer geolocation data (for example) to send them relevant advertising or Google using geolocation data to send them relevant advertising is a distinction without a difference. To require that consumers opt-out of a default privacy protection regime for ISPs and opt in to a privacy regime for using Google or Facebook potentially confuses the privacy issue. Why doesn’t the FCC just apply the same privacy law to Google and Facebook? Because it can’t.

Concerns about privacy are legitimate and change over time. It is reasonable to vigilantly and continuously assess the costs and benefits of any given privacy policy and adjust when necessary. But a disjointed policy that treats similarly situated economic players differently is not the answer.

[Babette Boliek is an associate professor of law at Pepperdine University School of Law ]

[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]