Biden Administration Tech Policy: Federal Communications Commission (FCC)

The FCC could be a major force for technology policy in the Biden Administration.

The next Administration will change many of the technology policies put in place under President Donald Trump, but among the highest profile policy reversals will be the Biden Administration’s reestablishment of net neutrality rules. This signature accomplishment of the Obama Administration was undone by the Trump Federal Communications Commission (FCC), and the Biden Campaign made no mistake about its support for the rules that would change how internet service providers (ISP) are regulated. Moreover, with Congressional gridlock a possibility over the next two years as Republicans may maintain control of the Senate, a Biden program will likely hinge on executive action, especially agency action.

Current FCC Chair Ajit Pai has announced his intention to maintain tradition and step down on 20 January 2021, allowing the Biden Administration to name its own chair and tilt the FCC in favor of the Democrats. Should the Senate confirm Biden’s FCC nominee, then it is quite likely to implement a number of key policy changes. However, and I cannot stress this possibility enough, should Biden nominate someone Senate Republicans object to, and they control the chamber, it is very possible the Senate leaves the FCC without a fifth member deadlocked with two members of each party. The calculation may be made that Senate Republicans would rather this be the case than an empowered FCC able to implement net neutrality among other measures.

Net Neutrality

After 2010 net neutrality rules had been overturned by a federal court, in 2015, the Obama Administration FCC promulgated regulations that reclassified ISPs under Title II of the Federal Communications Act as common carriers, which allowed the agency to implement net neutrality regulations. The Open Internet Order (FCC 15–24) put in place “bright-line rules that prohibit blocking, throttling, and paid prioritization; a rule preventing broadband providers from unreasonably interfering or disadvantaging consumers or edge providers from reaching one another on the Internet; and provides for enhanced transparency into network management practices, network performance, and commercial terms of broadband Internet access service.” These regulations survived a court challenge (U.S. Telecom Association v. FCC), largely because the FCC crafted the Open Internet Order on the basis of the ruling that struck down the previous iteration of net neutrality rules (Verizon v. FCC).

In 2017, the Trump Administration FCC’s “Restoring Internet Freedom” (FCC 17–166) returned ISPs to their previous regulatory posture as being regulated under Title I as information services in undoing the Open Internet Order. This rollback of net neutrality regulations “restore[d] the classification of broadband internet access service as a lightly-regulated information service and reinstates the private mobile service classification of mobile broadband internet access service….requires ISPs to disclose information about their network management practices, performance characteristics, and commercial terms of service…[and] eliminates the conduct rules imposed by the [2015 regulations].” In the fall of 2019, the United States Court of Appeals for the District Of Columbia Circuit (D.C. Circuit) upheld most of the FCC’s repeal of the Open Internet Order and the new regulations. However, the D.C. Circuit declined to accept the FCC’s attempt to preempt all contrary state laws and struck down this part of the FCC’s rulemaking. Consequently, states and local jurisdictions may now be free to enact regulations of internet services along the lines of the Open Internet Order. In fact, a number of states have such laws already enacted or pending. The D.C. Circuit also sent the case back to the FCC for further consideration on three points, which it is still working through.

The Biden Administration could institute a rulemaking as soon as a new chair is in place to remove the Trump Administration’s rollback and then reimplement the Obama Administration’s Open Internet Order, a process that might not be completed until well into 2022 as they agency would need to draft regulations, accept and address comments, and then unveil final regulations. There would be litigation against the new rules, and possibly some uncertainty given the decided rightward tilt of the federal judiciary.

5G

The FCC has played a key role in the Trump Administration’s push against the dominance of the People’s Republic of China (PRC) in the race to install and use 5G. The FCC launched an initiative to identify risky PRC equipment and services (mostly provided by Huawei and ZTE), and then Congress followed by enacted a statute codifying the FCC program and adding requirement. It remains to be seen whether the FCC will be provided additional funding through the Universal Service Fund (USF) or other means to finance the removal and replacement of any risky equipment United States (U.S.) telecommunications providers have already installed. There is no reason to expect a significant substantive change in course by a Biden Administration FCC even if there is a softening of it rhetorical tone.

On December 10, the FCC will vote on a Report and Order “that would require Eligible Telecommunications Carriers to remove equipment and services that pose an unacceptable risk to the national security of the United States or the security and safety of its people, would establish the Secure and Trusted Communications Networks Reimbursement Program, and would establish the procedures and criteria for publishing a list of covered communications equipment and services that must be removed.” This rulemaking would implement the “Secure and Trusted Communications Networks Act of 2019” (P.L. 116-124). The FCC summarized its action:

The Commission plays an important role in protecting America’s communications networks and, today, we take further steps toward securing our communications networks by implementing the Secure and Trusted Communications Networks Act of 2019 (Secure Networks Act). We first adopt a rule that requires Eligible Telecommunications Carriers (ETCs) to remove and replace covered equipment from their networks. Second, we establish the Secure and Trusted Communications Networks Reimbursement Program to subsidize smaller carriers to remove and replace covered equipment, once Congress appropriates at least $1.6 billion that Commission staff estimate will be needed to reimburse providers eligible under current law. Third, we establish the procedures and criteria for publishing a list of covered communications equipment or services that pose an unacceptable risk to the national security of the United States or the security and safety of United States persons and prohibit USF support from being used for such covered equipment or services. Last, we adopt a reporting requirement to ensure we are informed about the ongoing presence of covered equipment in communications networks.

The FCC is faced with competition from the Department of Defense (DOD) on setting 5G policy. In August, the White House and the DOD announced the latter will share a prime slice of mid band electromagnetic frequency with commercial entities that would be ideal for 5G according to their press release. The development of the next iteration of wireless communications has been hampered in the U.S. because the DOD controls a range of the usable frequency spectrum other nations have been using to test and deploy 5G. This announcement would allow commercial entities to ultimately bid on 100 continuous MHz of spectrum that has been used exclusively by the DOD for guidance and navigation. It is an open question whether the relinquishment of this spectrum will speed 5G development and adoption in the U.S., and the timeline provided by the Administration suggests licenses to use these mid-band frequencies will not be in the hands of commercial entities until mid-2022 at the earliest, assuming President Donald Trump is reelected, for a Biden Administration may propose a different course of action. Nonetheless, one Administration official asserted releasing this 100 MHz will be “the fastest transfer of Federal spectrum to commercial use in history.”

In a related development, in an October press release, the Department of Defense (DOD) detailed its “$600 million in awards for 5G experimentation and testing at five U.S. military test sites, representing the largest full-scale 5G tests for dual-use applications in the world.” These awards were made largely to prominent private sector technology and telecommunications companies vying to play prominent roles in 5G. However, of course, no awards were made to companies from the PRC. Nonetheless, this announcement may provoke further claims from Members of Congress and stakeholders that the DOD’s effort is the camel’s nose under the tent of a nationalized 5G system and a further infringement of the FCC’s jurisdiction.

This announcement is part of the DOD’s 5G Strategy that “provides the DOD approach to implementing the National Strategy to Secure 5G and aligns with the National Defense Authorization Act for Fiscal Year 2020 (FY2020), Section 254…[that] is also consistent with National Defense Strategy guidance to lead in key areas of great power competition and lethality to ensure 5G’s ‘impact on the battle network of the future.’”

In a related DOD release, it was explained:

The effort — Tranche 1 of the department’s larger 5G initiative — will accelerate adoption of 5G technology, enhance the effectiveness and lethality of U.S. combat forces, and further the development and use of common 5G standards to ensure interoperability with military partners and allies.

There have been other indications the Trump Administration was moving to institute a nationalized 5G system. Reportedly, a company with Karl Rove as its lobbyist may be poised to win a no-bid contract with the DOD for the commercial use of its highly sought-after mid-band spectrum ideal for 5G. Reportedly, White House Chief of Staff Mark Meadows has been pressing the DOD to hurry the process of making this spectrum available with many Administration officials having reservations about the seeming push to allow one company with little to no experience, Rivada, to have the whole chunk of spectrum. One official claimed if Rivada gets this contract it would be “the biggest handoff of economic power to a single entity in history.” Rove denied the company would accept a sole-source contract. There is strong bipartisan opposition on Capitol Hill, likely fanned by lobbyists from the companies apt to lose out if Rivada secures a winner-takes-all contract. Incidentally, in Jamaica where I live, the United States (U.S.) government has apparently pitched Rivada as a no-cost option to build out the island’s 5G network with Rivada collecting revenue from the operation of the system. The U.S. Ambassador has pitched the deal to Prime Minister Andrew Holness. And, while this could be seen as another U.S. effort to block the People’s Republic of China (PRC), which has done extensive development in Jamaica, it has the appearance of impropriety on the U.S.’ end, at the very least.

The FCC is also locking horns with other federal agencies over the approval of a new means of providing service for 5G. In late April, FCC issued a “decision authorize[ing] Ligado to deploy a low-power terrestrial nationwide network in the 1526-1536 MHz, 1627.5-1637.5 MHz, and 1646.5-1656.5 MHz bands that will primarily support Internet of Things (IoT) services.” The agency argued the order “provides regulatory certainty to Ligado, ensures adjacent band operations, including Global Positioning System (GPS), are sufficiently protected from harmful interference, and promotes more efficient and effective use of [the U.S.’s] spectrum resources by making available additional spectrum for advanced wireless services, including 5G.”

Defense and other civilian government stakeholders remained unconvinced. Also, in late April, the chairs and ranking members of the Armed Services Committees penned an op-ed, in which they claimed “the [FCC] has used the [COVID-19] crisis, under the cover of darkness, to approve a long-stalled application by Ligado Networks — a proposal that threatens to undermine our GPS capabilities, and with it, our national security.” Chairs James Inhofe (R-OK) and Adam Smith (D-WA) and Ranking Members Jack Reed (D-RI) and Mac Thornberry (R-TX) asserted:

• So, we wanted to clarify things: domestic 5G development is critical to our economic competiveness against China and for our national security. The Pentagon is committed working with government and industry to share mid-band spectrum where and when it makes sense to ensure rapid roll-out of 5G.
• The problem here is that Ligado’s planned usage is not in the prime mid-band spectrum being considered for 5G — and it will have a significant risk of interference with GPS reception, according to the National Telecommunications and Information Administration (NTIA). The signals interference Ligado’s plan would create could cost taxpayers and consumers billions of dollars and require the replacement of current GPS equipment just as we are trying to get our economy back on its feet quickly — and the FCC has just allowed this to happen.

The Ligado application was seen as so important, the first hearing of the Senate Armed Services Committee held after the beginning of the COVID-19 pandemic was on this issue. Not surprisingly the DOD explained the risks of Ligado’s satellite-terrestrial wireless system as it sees them at some length. Under Secretary of Defense for Research and Engineering Michael Griffin asserted at the 6 May hearing:

• The U.S. Department of Transportation (DOT) conducted a testing program developed over multiple years with stakeholder involvement, evaluating 80 consumer-grade navigation, survey, precision agriculture, timing, space-based, and aviation GPS receivers. This test program was conducted in coordination with DoD testing of military receivers. The results, as documented in the DoT “Adjacent Band Compatibility” study released in March, 2018, demonstrated that even very low power levels from a terrestrial system in the adjacent band will overload the very sensitive equipment required to collect and process GPS signals.  Also, many high precision receivers are designed to receive Global Navigation Satellite System (GNSS) signals not only in the 1559 MHz to 1610 MHz band, but also receive Mobile Satellite Service (MSS) signals in the 1525 MHz to 1559 MHz band to provide corrections to GPS/GNSS to improve accuracy. With the present and future planned ubiquity of base stations for mobile broadband use, the use of GPS in entire metropolitan areas would be effectively blocked.  That is why every government agency having any stake in GPS, as well as dozens of commercial entities that will be harmed if GPS becomes unreliable, opposed the FCC’s decision. 
• There are two principal reasons for the Department’s opposition to Ligado’s proposal. The first and most obvious is that we designed and built GPS for reasons of national security, reasons which are at least as valid today as when the system was conceived. The second, less well-known, is that the DoD has a statutory responsibility to sustain and protect the system. Quoting from 10 USC 2281, the Secretary of Defense “…shall provide for the sustainment and operation of the GPS Standard Positioning Service for peaceful civil, commercial, and scientific uses…” and “…may not agree to any restriction of the GPS System proposed by the head of a department or agency of the United States outside DoD that would adversely affect the military potential of GPS.”

A few weeks prior to the hearing, 32 Senators wrote the FCC expressing their concern that the “Order does not adequately project adjacent band operations – including those related to GPS and satellite communications –  from harmful interference that would impact countless commercial and military activities.” They also took issue “the hurried nature of the circulation and consideration of the Order,” which they claimed occurred during “a national crisis” and “was not conducive to addressing the many technical concerns raised by affected stakeholders.” Given that nearly one-third of the Senate signed the letter, this may demonstrate the breadth of opposition in Congress to the Ligado order.

In May, the National Telecommunications and Information Administration (NTIA) filed two petitions with the FCC asking the latter agency to stay its decision allowing Ligado to proceed with wireless service using a satellite-terrestrial network utilizing the L-Band. This decision was opposed by a number of Trump Administration agencies and a number of key Congressional stakeholders. They argued the order would allow Ligado to set up a system that would interfere with the DOD GPS and civilian federal agency applications of GPS as well. If the FCC denies these petitions, it is possible NTIA could file suit in federal court to block the FCC’s order and Ligado.

In the petition for a stay, NTIA asked that “Ligado Networks LLC’s (Ligado’s) mobile satellite service (MSS) license modification applications for ancillary terrestrial operations” be paused until the agency’s petition for reconsideration is decided by the FCC because of “executive branch concerns of harmful interference to federal government and other GPS devices.”

In the petition for reconsideration, the NTIA argued it “focuses on the problems in the Ligado Order that are uniquely related to the interests of DOD and other federal agencies and their mission-critical users of GPS.” The NTIA added “that the Commission failed to consider the major economic impact its decision will have on civilian GPS users and the American economy…[and] [a]s the lead civil agency for GPS, DOT explained…Ligado’s proposed operations would disrupt a wide range of civil GPS receivers owned and operated by emergency first responders, among others.”

In early June, Ligado filed its response to the Trump Administration’s petitions to stay and have the FCC reconsider its order allowing the company to move forward with its satellite-terrestrial wireless network. The company argued the NTIA’s petitions rehash the same arguments heard and rejected by the FCC over the course of the nearly decade long proceeding, do not argue that an injury has occurred because Ligado is not yet operating, and is contrary to the public interest by delaying the rollout of 5G.

Broadband Privacy

At the beginning of the Trump Administration, Congress used the Congressional Review Act (CRA) to nullify the FCC’s 2016 final rule “Protecting the Privacy of Customers of Broadband and Other Telecommunications Services.” An act of Congress signed by the President is needed before the FCC could again regulate the privacy and data practices of internet service providers (ISPs). Such a change could conceivably be included in broader privacy legislation that supposedly will be at the top of Congress’ technology agenda in the next Congress. However, to date, there has not been a broad privacy bill I have seen that includes such language. And yet, a number of the broader bills would include common carriers under the jurisdiction of the Federal Trade Commission’s (FTC) expanded powers to enforce a new privacy regime, which would represent a de facto negation of the CRA process that undid the FCC’s broadband privacy rules. It would seem to me the key question would be what would happen in such a scenario if a future FCC undoes net neutrality rules. Would ISPs then no longer be subject to federal privacy rules as they would no longer be common carriers and no longer be subject to FTC jurisdiction as such?

In any event, the FCC in 2016 summarized its now nullified rules:

The rules separate the use and sharing of information into three categories and include clear guidance for both ISPs and customers about the transparency, choice and security requirements for customers’ personal information:

• Opt-in: ISPs are required to obtain affirmative “opt-in” consent from consumers to use and share sensitive information. The rules specify categories of information that are considered sensitive, which include precise geo-location, financial information, health information, children’s information, social security numbers, web browsing history, app usage history and the content of communications.
• Opt-out: ISPs would be allowed to use and share non-sensitive information unless a customer “opts-out.” All other individually identifiable customer information – for example, email address or service tier information – would be considered non-sensitive and the use and sharing of that information would be subject to opt-out consent, consistent with consumer expectations.
• Exceptions to consent requirements: Customer consent is inferred for certain purposes specified in the statute, including the provision of broadband service or billing and collection. For the use of this information, no additional customer consent is required beyond the creation of the customer-ISP relationship.

In addition, the rules include:

• Transparency requirements that require ISPs to provide customers with clear, conspicuous and persistent notice about the information they collect, how it may be used and with whom it may be shared, as well as how customers can change their privacy preferences;
• A requirement that broadband providers engage in reasonable data security practices and guidelines on steps ISPs should consider taking, such as implementing relevant industry best practices, providing appropriate oversight of security practices, implementing robust customer authentication tools, and proper disposal of data consistent with FTC best practices and the Consumer Privacy Bill of Rights.
• Common-sense data breach notification requirements to encourage ISPs to protect the confidentiality of customer data, and to give consumers and law enforcement notice of failures to protect such information.

Section 230

The Trump Administration FCC has started a rulemaking to construe key terms in 47 U.S.C. 230 (aka Section 230), a provision that shields technology companies from litigation arising from content it posts from third parties and any decisions it makes to take down, censor, or edit such material. Via executive order (EO), Trump directed the National Telecommunications and Information Administration (NTIA) to file a petition with the FCC asking the agency to conduct a rulemaking, and the FCC decided to commence this fall. However, it is unlikely the FCC will have enough time to finish this process even though Pai could conceivably unveil draft regulations to pare back the protection companies like Facebook, Twitter, Reddit, etc. enjoy. This push has been opposed by Democrats generally and by the two Democratic FCC Commissioners, and so it would likely be ended under a Biden FCC.

As a threshold matter, it is quite likely President-elect Joe Biden will issue almost immediately an executive order pausing almost all Trump Administration executive orders pending review. It is also conceivable that the new Administration will withdraw the Trump Administration’s petition for a Section 230 rulemaking, and a Biden Administration staffed and controlled FCC may be very willing to accept such a withdrawal and close down the rulemaking process. This is not to say, however, that the Biden Administration will not seek changes to Section 230. Biden has opined Section 230 should be repealed, and other Democratic stakeholders want to see a paring back of the liability shield as a means of creating an incentive for Facebook, Twitter, and others to address the proliferation of problematic content such as white supremacist materials, QAnon conspiracies, abuse of women and minorities, and outright lies and disinformation. A key Member of the House, Representative Jan Schakowsky (D-IL), who chairs the Consumer Protection and Commerce Subcommittee, has said she will release her reform proposal in January. It remains to be seen what role, if any, the FCC may play under a revised Section 230.

In October, FCC Chair Ajit Pai announced that that the “[t]he Commission’s General Counsel has informed me that the FCC has the legal authority to interpret Section 230…[and] [c]onsistent with this advice, I intend to move forward with a rulemaking to clarify its meaning.” Pai namechecked Thomas’ statement in which he “pointed out that courts have relied upon ‘policy and purpose arguments to grant sweeping protections to Internet platforms’ that appear to go far beyond the actual text of the provision.” Moreover, this interpretation has been subsequently released in a rather unusual fashion. Normally, agencies use the vehicle of a draft rule to make the claim it has or does not have certain authority provided by Congress to act. But, not in this case. The FCC has decided to make its case in a blog posting before it has released proposed regulations to define certain terms in Section 230’s liability shield for technology companies.

Working along a parallel track is pressure on the Senate committee that oversees the FCC to vet, hold a hearing on, and approve Trump’s nominee for the FCC. Commissioner Mike O’Reilly was lukewarm to the EO and his appointment to the FCC was expiring. And so, in typical Trump Administration fashion, the White House decided that the policy was not the problem. Personnel was. Consequently, Nathan Simington of the NTIA was nominated to replace O’Reilly, and the Senate Commerce, Science, and Transportation Committee advanced his nomination on party-line vote on 2 December. If Simington is confirmed and then the Republican-controlled Senate blocks a Biden nominee (which we know would never happen given the deep respect Senate Majority Leader Mitch McConnell (R-KY) has for the traditions of the institution), then the agency would be decapitated and could not act.

Broadband

Bridging the digital divide will likely be a signal technology priority for the Biden Administration. There are media accounts stating Biden and allies in Congress are already planning on how to significantly increase broadband funding, possibly in the next COVID-19 stimulus bill. Whether they continue the Trump Administration’s FCC’s approach is not clear. Whatever their course of action, the digital divide was made all the starker by the pandemic with people working from work and children doing online schooling.

The agency has proposed and is implementing a program that will allegedly raise over $20 billion to bridge the digital divide. The FCC explained the Rural Digital Opportunity Fund (RDOF):

The Rural Digital Opportunity Fund is the Commission’s next step in bridging the digital divide.  On August 1, 2019, the Commission adopted a Notice of Proposed Rulemaking (NPRM) proposing to establish the $20.4 billion Rural Digital Opportunity Fund to bring high speed fixed broadband service to rural homes and small businesses that lack it.  On January 30, 2020, the Commission adopted the Rural Digital Opportunity Fund Report and Order, which establishes the framework for the Rural Digital Opportunity Fund, building on the success of the CAF Phase II auction by using reverse auctions in two phases.  The Phase I auction, which is scheduled to begin on October 29, 2020, will target over six million homes and businesses in census blocks that are entirely unserved by voice and broadband with download speeds of at least 25 Mbps.  Phase II will cover locations in census blocks that are partially served, as well as locations not funded in Phase I.  The Rural Digital Opportunity Fund will ensure that networks stand the test of time by prioritizing higher network speeds and lower latency, so that those benefitting from these networks will be able to use tomorrow’s Internet applications as well as today’s.

There are other programs a Biden FCC could utilize to address some of the digital divide, including the E-Rate and Lifeline programs, and the next FCC could make some changes to the structure of the programs through rulemakings if it sought fit.

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