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The (Conventional) 5G Chairman

TOTM Chairman Ajit Pai prioritized making new spectrum available for 5G. To his credit, he succeeded. Over the course of four years, Chairman Pai made available . . .

Chairman Ajit Pai prioritized making new spectrum available for 5G. To his credit, he succeeded. Over the course of four years, Chairman Pai made available more high-band and mid-band spectrum, for licensed use and unlicensed use, than any other Federal Communications Commission chairman. He did so in the face of unprecedented opposition from other federal agencies, navigating the chaotic currents of the Trump administration with political acumen and courage. The Pai FCC will go down in history as the 5G FCC, and as the chairman who protected the primacy of FCC control over commercial spectrum policy.

Read the full piece here.

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Telecommunications & Regulated Utilities

Introductory Post: Retrospective on Ajit Pai’s Tenure as FCC Chairman

TOTM Ajit Pai will step down from his position as chairman of the Federal Communications Commission (FCC) effective Jan. 20. Beginning Jan. 15, Truth on the Market will host a symposium exploring Pai’s tenure, with contributions from a range of scholars and practitioners.

Ajit Pai will step down from his position as chairman of the Federal Communications Commission (FCC) effective Jan. 20. Beginning Jan. 15, Truth on the Market will host a symposium exploring Pai’s tenure, with contributions from a range of scholars and practitioners.

Read the full piece here.

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Telecommunications & Regulated Utilities

Comments in the Matter of Use of the 5.850 – 5.925 GHz Band

Regulatory Comments On behalf of the International Center for Law & Economics, I offer the following reply comments in support of the Federal Communications Commission’s (FCC) Notice . . .

On behalf of the International Center for Law & Economics, I offer the following reply comments in support of the Federal Communications Commission’s (FCC) Notice of Proposed Rulemaking (NPRM) to expand and enhance the use of the 5.850 – 5.925 GHz spectrum band.

In previously submitted comments, I offered support for the FCC’s proposed reallocation of the lower 45 MHz of the 5.9 GHz band based on the spectrum’s current underuse relative to its value in the context of Wi-Fi. Since those comments were submitted, subsequent studies have estimated that opening the lower 45 MHz of the 5.9 GHz band would result in $28.14 billion in economic value by 2025. These findings lend further support to the FCC’s proposed plan of action. Yet, opposition from elements of the transportation sector persists. Those opponents have offered, broadly, four justifications for delaying, modifying and/or abandoning elements of the FCC’s 5.9 GHz NPRM. ICLE’s reply comments will address and rebut each, in turn.

Click here to read the full comments.

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Telecommunications & Regulated Utilities

ICLE urges NTIA to avoid heavy-handed privacy regulation that would stifle innovation and limit consumer choice

Regulatory Comments ICLE submitted comments to the National Telecommunications and Information Administration (NTIA) on Developing the Administration’s Approach to Consumer Privacy.

Last week, ICLE submitted comments to the National Telecommunications and Information Administration (NTIA) on Developing the Administration’s Approach to Consumer Privacy. Scholars Geoffrey Manne, Kristian Stout, and Dirk Auer urge the agency to avoid legislation mandating tight controls on private companies’ use of consumer data akin to the EU’s General Data Protection Regulation (GDPR).

Although the US does not have a single, omnibus, privacy regulation, this does not mean that the US does not have “privacy law.” In the US, there already exist generally applicable laws at both the federal and state level that provide a wide scope of protection for individuals, including consumer protection laws that apply to companies’ data use and security practices, as well as those that have been developed in common law (property, contract, and tort) and criminal codes.

In addition, there are specific regulations pertaining to certain kinds of information, such as medical records, personal information collected online from children, credit reporting, as well as the use of data in a manner that might lead to certain kinds of illegal discrimination.

Getting regulation right is always difficult, but it is all the more so when confronting evolving technology, inconsistent and varied consumer demand, and intertwined economic effects — all conditions that confront online privacy regulation. Given this complexity, and the limits of our knowledge regarding consumer preferences and business conduct in this area, ICLE’s evaluation suggests that the proper method of regulating privacy is, for now at least, the course that the Federal Trade Commission (FTC) has historically taken: case-by-case examination of actual privacy harms, without ex ante regulations, coupled with narrow legislation targeted at problematic uses of personal information.

Many (if not most) services on the Internet are offered on the basis that user data can, within certain limits, be used by a firm to enhance its services and support its business model, thereby generating benefits to users. To varying degrees (and with varying degrees of granularity), services offer consumers the opportunity to opt-out of this consent to the use of their data, although in some cases the only way effectively to opt-out is to refrain from using a service at all.

Critics of the US approach to privacy sometimes advocate for a move to an opt-in regime (as is the case in the GDPR). But the problem is that “‘[o]pt-in’ provides no greater privacy protection than ‘opt-out’ but imposes significantly higher costs with dramatically different legal and economic implications.” In staunching the flow of data, opt-in regimes impose both direct and indirect costs on the economy and on consumers, reducing the value of certain products and services not only to the individual who does not opt-in, but to the broader network as a whole. Not surprisingly, these effects fall disproportionately on the relatively poor and the less technology-literate.

U.S. privacy regulators have generally evidenced admirable restraint and assessed the relevant tradeoffs, recognizing that the authorized collection and use of consumer information by data companies confers enormous benefits, even as it entails some risks. Indeed, the overwhelming conclusion of decades of intense scrutiny is that the application of ex ante privacy principles across industries is a fraught exercise as each firm faces a different set of consumer expectations about its provision of innovative services, including privacy protections.

This does not mean that privacy regulation should never be debated, nor that a more prescriptive regime should never be considered. But any such efforts must begin with the collective wisdom of the agencies, scholars, and policy makers that have been operating in this space for decades, and with a deep understanding of the business realities and consumer welfare effects involved.

Read the full comments here.

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Data Security & Privacy

The destiny of telecom regulation is antitrust

TOTM This week the FCC will vote on Chairman Ajit Pai’s Restoring Internet Freedom Order. Once implemented, the Order will rescind the 2015 Open Internet Order and return . . .

This week the FCC will vote on Chairman Ajit Pai’s Restoring Internet Freedom Order. Once implemented, the Order will rescind the 2015 Open Internet Order and return antitrust and consumer protection enforcement to primacy in Internet access regulation in the U.S.

Read the full piece here.

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Telecommunications & Regulated Utilities

The Internet Conduct Rule Must Die

TOTM It’s fitting that FCC Chairman Ajit Pai recently compared his predecessor’s jettisoning of the FCC’s light touch framework for Internet access regulation without hard evidence . . .

It’s fitting that FCC Chairman Ajit Pai recently compared his predecessor’s jettisoning of the FCC’s light touch framework for Internet access regulation without hard evidence to the Oklahoma City Thunder’s James Harden trade. That infamous deal broke up a young nucleus of three of the best players in the NBA in 2012 because keeping all three might someday create salary cap concerns. What few saw coming was a new TV deal in 2015 that sent the salary cap soaring.

Read the full piece here.

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Telecommunications & Regulated Utilities

Netflix and net neutrality: Hypocritically screwing over Internet users since 2015!

TOTM Netflix’s latest net neutrality hypocrisy (yes, there have been others. See here and here, for example) involves its long-term, undisclosed throttling of its video traffic on AT&T’s and . . .

Netflix’s latest net neutrality hypocrisy (yes, there have been others. See here and here, for example) involves its long-term, undisclosed throttling of its video traffic on AT&T’s and Verizon’s wireless networks, while it lobbied heavily for net neutrality rules from the FCC that would prevent just such throttling by ISPs.

It was Netflix that coined the term “strong net neutrality,” in an effort to import interconnection (the connections between ISPs and edge provider networks) into the net neutrality fold. That alone was a bastardization of what net neutrality purportedly stood for, as I previously noted…

Read the full piece here.

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Telecommunications & Regulated Utilities

The companies that actually manufacture networks and devices oppose Title II, which may be all you need to know

Popular Media It’s easy to look at the net neutrality debate and assume that everyone is acting in their self-interest and against consumer welfare. Thus, many on . . .

It’s easy to look at the net neutrality debate and assume that everyone is acting in their self-interest and against consumer welfare. Thus, many on the left denounce all opposition to Title II as essentially “Comcast-funded,” aimed at undermining the Open Internet to further nefarious, hidden agendas. No matter how often opponents make the economic argument that Title II would reduce incentives to invest in the network, many will not listen because they have convinced themselves that it is simply special-interest pleading.

But whatever you think of ISPs’ incentives to oppose Title II, the incentive for the tech companies (like Cisco, Qualcomm, Nokia and IBM) that design and build key elements of network infrastructure and the devices that connect to it (i.e., essential input providers) is to build out networks and increase adoption (i.e., to expand output). These companies’ fundamental incentive with respect to regulation of the Internet is the adoption of rules that favor investment. They operate in highly competitive markets, they don’t offer competing content and they don’t stand as alleged “gatekeepers” seeking monopoly returns from, or control over, what crosses over the Interwebs.

Thus, it is no small thing that 60 tech companies — including some of the world’s largest, based both in the US and abroad — that are heavily invested in the buildout of networks and devices, as well as more than 100 manufacturing firms that are increasingly building the products and devices that make up the “Internet of Things,” have written letters strongly opposing the reclassification of broadband under Title II.

There is probably no more objective evidence that Title II reclassification will harm broadband deployment than the opposition of these informed market participants.

These companies have the most to lose from reduced buildout, and no reasonable nefarious plots can be constructed to impugn their opposition to reclassification as consumer-harming self-interest in disguise. Their self-interest is on their sleeves: More broadband deployment and adoption — which is exactly what the Open Internet proceedings are supposed to accomplish.

If the FCC chooses the reclassification route, it will most assuredly end up in litigation. And when it does, the opposition of these companies to Title II should be Exhibit A in the effort to debunk the FCC’s purported basis for its rules: the “virtuous circle” theory that says that strong net neutrality rules are necessary to drive broadband investment and deployment.

Access to all the wonderful content the Internet has brought us is not possible without the billions of dollars that have been invested in building the networks and devices themselves. Let’s not kill the goose that lays the golden eggs.

Filed under: antitrust, law and economics, markets, monopolization, net neutrality, technology, telecommunications, vertical restraints, wireless Tagged: antitrust, net neutrality, open internet, tech companies, Title II

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Antitrust & Consumer Protection

Comments, Big Data and Consumer Privacy in the Internet Economy

Regulatory Comments "...A serious assessment of the need for new privacy legislation, and the right way to frame it, would not begin by assuming the premise that a particular framework is necessary..."

Summary

“…A serious assessment of the need for new privacy legislation, and the right way to frame it, would not begin by assuming the premise that a particular framework is necessary.
Specifically, before recommending any new legislation, the NTIA should do – or ensure that someone does – what the Federal Trade Commission has steadfastly refused to do: carefully
assess what is and is not already covered by existing U.S. laws…”

“Existing laws might well be inadequate to deal with some of the specific the challenges raised by Big Data. But until they are more carefully examined, we will not know where the
gaps are. Even those who might insist that there would be no harm to redundancy should agree that we must learn from the lessons of past experience with these laws. Moreover, it
is essential to understand what existing law covers because either (a) it will co-exist with any future privacy law, in which case companies will have potentially conflicting…”

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Data Security & Privacy