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TOTM It is my endeavor to scrutinize the questionable assessment articulated against default settings in the U.S. Justice Department’s lawsuit against Google. Default, I will argue, . . .
It is my endeavor to scrutinize the questionable assessment articulated against default settings in the U.S. Justice Department’s lawsuit against Google. Default, I will argue, is no antitrust fault. Default in the Google case drastically differs from default referred to in the Microsoft case. In Part I, I argue the comparison is odious. Furthermore, in Part II, it will be argued that the implicit prohibition of default settings echoes, as per listings, the explicit prohibition of self-preferencing in search results. Both aspects – default’s implicit prohibition and self-preferencing’s explicit prohibition – are the two legs of a novel and integrated theory of sanctioning corporate favoritism. The coming to the fore of such theory goes against the very essence of the capitalist grain. In Part III, I note the attempt to instill some corporate selflessness is at odds with competition on the merits and the spirit of fundamental economic freedoms.
Read the full piece here.
TL;DR Section 230 of the Communications Decency Act has come under close scrutiny. Section 230 provides important immunity to online platforms for the content of third-party users.
Section 230 of the Communications Decency Act has come under close scrutiny. Section 230 provides important immunity to online platforms for the content of third-party users. Section 230 also guarantees legal immunity when platforms moderate objectionable content on their services: so-called “good samaritan” immunity.
Reform efforts are aimed at creating more carve-outs to Section 230 immunities, and limiting the scope of content platforms can moderate.
Many of these proposals would make bad policy by creating disincentives to moderate content in order to avoid a flood of litigation.
Read the full explainer here.
TL;DR While there are possible useful reforms to be made to Section 230, forcing major changes to an important law on the basis of a political quarrel would let petty politics reshape one of the most important laws that governs the Internet.
President Trump recently demanded the National Telecommunications and Information Administration (NTIA) request that the FCC undertake a major reinterpretation of CDA Section 230 to make it more difficult for digital platforms to receive liability immunity for the content of third parties and for their own content moderation decisions. The FCC has granted the petition and is seeking public comment.
The petition is driven by a political dispute between the Administration and the platforms. What’s more, the Administration is evading constitutional restrictions in order to cajole the FCC into serving its ends.
While there are possible useful reforms to be made to Section 230, forcing major changes to an important law on the basis of a political quarrel would let petty politics reshape one of the most important laws that governs the Internet.
Amicus Brief ICLE supports the petition for certiorari filed by the National Association of Broadcasters (“NAB”), et al. seeking this Court’s review of the order issued by the U.S. Court of Appeals for the Third Circuit in Prometheus Radio Project v. FCC.
This proceeding is fast becoming the Jarndyce v. Jarndyce of administrative law. For nearly two decades, a three-judge panel in the Third Circuit has blocked the FCC’s efforts to comply with its statutory obligation under the 1996 Act to review its media ownership rules periodically and repeal or modify any rules that are no longer necessary because of increased competition in local media markets.
The order in Prometheus IV is the most recent and extreme example of the Third Circuit panel’s improper interference with the FCC’s efforts to comply with this statutory obligation. In it, the panel vacated an FCC order that would have repealed or modified media ownership regulations that even the panel did not dispute are no longer needed to achieve their original purpose of promoting competition, localism, and diversity of viewpoints. See Prometheus IV, 939 F.3d at 584-588 (disputing the FCC’s analysis and conclusions as to female and minority ownership diversity, but not as to promotion of competition, localism or diversity of viewpoints).
The Third Circuit panel instead vacated the FCC’s order because two judges on the panel believed those regulations might serve another, altogether different objective—promoting minority and female ownership—that is nowhere mentioned in either the Communications Act of 1934, 47 U.S.C. § 151 et seq., or the 1996 Act. See Prometheus IV, 939 F.3d at 584- 588. In so doing, the panel exceeded the limits of judicial review authorized by the Administrative Procedure Act, 5 U.S.C. § 551 et seq., by substituting its judgment for that of the agency to which Congress had expressly delegated authority to determine whether these media ownership regulations were still both necessary and in the public interest, and by placing burdens on the agency beyond those established by Congress.
In overstepping these limits, the Third Circuit panel will further delay the elimination of regulations that are not only no longer necessary, but that are also limiting the ability of local newspapers and broadcasters to compete with increasingly important digital media platforms. These outdated regulations have already contributed to an “extinction-level crisis” in the newspaper industry, and the spread of that crisis to local broadcasters in smaller markets is imminent. Consequently, the panel’s order will cause serious and immediate injury to the public’s First Amendment interest in preserving a strong local free press. See Associated Press v. United States, 326 U.S. 1, 28 (1945) (a “free press is indispensable to the workings of our democratic society”) (Frankfurter, J., concurring).
Regulatory Comments In order to maximize the benefits of broadband to society, including through the provision of public safety communications and services, public policy must promote the . . .
In order to maximize the benefits of broadband to society, including through the provision of public safety communications and services, public policy must promote the proper incentives for broadband buildout. Both the 2015 Title II Open Internet Order (the “OIO”) and the 2017 Restoring Internet Freedom Order (the “RIFO”) were premised on this. But each adopted a different approach to accomplishing this objective.
The OIO premised its rules on the theory that ISPs are “gatekeepers,” poised to kill the golden goose of demand for broadband by adopting business practices that could reduce edge innovation.
The key insight of the virtuous cycle is that broadband providers have both the incentive and the ability to act as gatekeepers standing between edge providers and consumers. As gatekeepers, they can block access altogether; they can target competitors, including competitors to their own video services; and they can extract unfair tolls. Such conductwould, as the Commission concluded in 2010, “reduce the rate of innovation at the edge and, in turn, the likely rate of improvements to network infrastructure.” In other words, when a broadband provider acts as a gatekeeper, it actually chokes consumer demand for the very broadband product it can supply.
The RIFO, on the other hand, properly conceives of ISPs as intermediaries in a two-sided market that aim to maximize the value of the market by adopting practices, like pricing structures and infrastructure investment, that increase the value for both sides of the market.
We find it essential to take a holistic view of the market(s) supplied by ISPs. ISPs, as well as edge providers, are important drivers of the virtuous cycle, and regulation must be evaluated accounting for its impact on ISPs’ capacity to drive that cycle, as well as that of edge providers. The underlying economic model of the virtuous cycle is that of a two- sided market. In a two-sided market, intermediaries—ISPs in our case—act as platforms facilitating interactions between two different customer groups, or sides of the market— edge providers and end users. . . . The key characteristic of a two-sided market, however, is that participants on each side of the market value a platform service more as the number and/or quality of participants on the platform’s other side increases. (The benefits subscribers on one side of the market bring to the subscribers on the other, and vice versa, are called positive externalities.) Thus, rather than a single side driving the market, both sides generate network externalities, and the platform provider profits by inducing both sides of the market to use its platform. In maximizing profit, a platform provider sets prices and invests in network extension and innovation, subject to costs and competitive conditions, to maximize the gain both sides of the market obtain from interacting across the platform. The more competitive the market, the larger the net gains to subscribers and edge providers. Any analysis of such a market must account for each side of the market and the platform provider.
In other words, the fundamental difference of approach between the two Orders turns on whether it is edge innovation, pushing against ISP incentives to expropriate value from edge providers, that primarily drives network demand and thus encourages investment, or whether optimization decisions by both ISPs and the edge are drivers of network value. The RIFO rightly understands that ISPs have sharp incentives both to innovate as platforms (and thus continue to attract and retain end users), as well as to continue to make their services useful to edge providers (and, by extension, the consumers of those edge providers’ services).
The D.C. Circuit upheld RIFO’s fundamental rationale as a supportable basis for the FCC’s rules in Mozilla v. FCC. But it also accepted that three specific concerns were insufficiently examined in the RIFO, and remanded the case to the FCC to address them. Among these was the question of the RIFO’s implications for public safety. In its Public Notice seeking to refresh the record on the remanded issues, the Wireline Competition Bureau asks (among other things):
These are the questions to which this comment is primarily addressed.
In Part I, we discuss how the RIFO fosters investment in broadband buildout, in particular by enabling prioritization and by reducing the effects of policy uncertainty. In Part II, we describe how that network investment benefits public safety both in both direct and indirect ways. In Part III, we highlight the benefits to public safety from prioritization, in particular, which is facilitated by the RIFO.
Read the full comments here.
TOTM Advanced broadband networks are hot topics, but little attention is paid to the critical investments in infrastructure necessary to make these networks a reality. The FCC’s proposed 621 Order is an important measure to help providers deploy high speed broadband across a fragmented municipal regulatory environment.
Advanced broadband networks, including 5G, fiber, and high speed cable, are hot topics, but little attention is paid to the critical investments in infrastructure necessary to make these networks a reality. Each type of network has its own unique set of challenges to solve, both technically and legally. Advanced broadband delivered over cable systems, for example, not only has to incorporate support and upgrades for the physical infrastructure that facilitates modern high-definition television signals and high-speed Internet service, but also needs to be deployed within a regulatory environment that is fragmented across the many thousands of municipalities in the US. Oftentimes, the complexity of managing such a regulatory environment can be just as difficult as managing the actual provision of service.
Regulatory Comments ICLE submitted comments to the FCC on the First Amendment implications of the leased access rules. Associate Director, Legal Research Ben Sperry argued the changes in the video marketplace towards competition undercut the justification for subjecting regulation of cable operators' speech to only intermediate scrutiny.
ICLE submitted comments to the FCC on the First Amendment implications of the leased access rules. Associate Director, Legal Research Ben Sperry argued the changes in the video marketplace towards competition undercut the justification for subjecting regulation of cable operators’ speech to only intermediate scrutiny. As a result, the leased access rules should be reviewed as compelled speech under strict scrutiny. The leased access rules are not narrowly tailored to a compelling government interest and therefore would fail under the strict scrutiny standard.
Click here to read the full comments.
Regulatory Comments In this ex parte letter, ICLE analyzes the law and economics of both the underlying statute and the FCC's proposed rulemaking that would affect the interpretation of cable franchise fees. For a variety of reasons set forth in the letter, we believe that the Commission is on firm legal and economic footing to adopt its proposed Order. Congress intentionally enacted the five percent revenue cap to prevent LFAs from relying on cable franchise fees as an unlimited general revenue source. In order to maintain the proper incentives for network buildout — which are ever more-critical as our economy increasingly relies on high-speed broadband networks — the Commission should adopt the proposed Order.
Congress passed the 1984 Cable Act in order to create a unified national framework for regulating networks for cable networks involving municipalities, cable operators, and the FCC. As described by its primary sponsor, Sen. Barry Goldwater of Arizona, the Cable Act was drafted in order to reduce barriers standing in the way of the adoption of cable technology.
The Act was passed and later amended in a way that carefully drew lines around the acceptable scope of local franchising authorities’ de facto monopoly power in granting cable franchises. The thrust of the Act was to encourage competition and build-out by discouraging franchising authorities from viewing cable providers as a captive source of unlimited revenue. It did this while also giving franchising authorities the tools necessary to support public, educational, and governmental (“PEG”) programming and enabling them to be fairly compensated for use of the public rights of way. Unfortunately, since the 1984 Cable Act was passed, an increasing number of local and state franchising authorities (collectively, “LFAs”) have attempted to work around the Act’s careful balance. In particular, these efforts have created two main problems:
First, LFAs frequently attempt to evade the Act’s limitation on franchise fees to five percent of cable revenues by seeking a variety of in-kind contributions from cable operators that impose costs over and above the five percent limit. LFAs do this despite the plain language of the statute defining franchise fees quite broadly as including any “tax, fee, or assessment of any kind imposed by a franchising authority or any other governmental entity.”
Although not nominally “fees,” such requirements are indisputably “assessments,” and the costs of such obligations are equivalent to the marginal cost of a cable operator providing those “free” services and facilities, as well as the opportunity cost (i.e., the foregone revenue) of using its fixed assets in the absence of a state or local franchise obligation. Any such costs will, to some extent, be passed on to customers as higher subscription prices, reduced quality, or both. By carefully limiting the ability of LFAs to abuse their bargaining position, Congress ensured that they could not extract disproportionate rents from cable operators (and, ultimately, their subscribers).
Second, LFAs also attempt to circumvent the franchise fee cap of five percent of gross cable revenues by seeking additional fees for non-cable services provided over mixed use networks (i.e. imposing additional franchise fees on the provision of broadband and other non-cable services over cable networks). But the statute is similarly clear that LFAs or other governmental entities cannot regulate non-cable services provided via franchised cable systems.
In this ex parte letter, ICLE analyzes the law and economics of both the underlying statute and the FCC’s proposed rulemaking that would affect the interpretation of cable franchise fees. For a variety of reasons set forth in the letter, we believe that the Commission is on firm legal and economic footing to adopt its proposed Order. It should be unavailing – and legally irrelevant – to argue, as many LFAs have, that declining cable franchise revenue leaves municipalities with an insufficient source of funds to finance their activities, and thus that recourse to these other sources is required. Congress intentionally enacted the five percent revenue cap to prevent LFAs from relying on cable franchise fees as an unlimited general revenue source. In order to maintain the proper incentives for network buildout — which are ever more-critical as our economy increasingly relies on high-speed broadband networks — the Commission should adopt the proposed Order.
Click here to read the full ex parte letter.
TOTM This morning a diverse group of more than 75 academics, scholars, and civil society organizations — including ICLE and several of its academic affiliates — published a set of seven “Principles for Lawmakers” on liability for user-generated content online, aimed at guiding discussions around potential amendments to Section 230 of the Communications Decency Act of 1996.
This morning a diverse group of more than 75 academics, scholars, and civil society organizations — including ICLE and several of its academic affiliates — published a set of seven “Principles for Lawmakers” on liability for user-generated content online, aimed at guiding discussions around potential amendments to Section 230 of the Communications Decency Act of 1996.
