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Big Tech

Court Strikes Down FCC Policy on Offensive Content

WASHINGTON, July 13, 2010 – A federal appeals court on Tuesday said the Federal Communications Commission cannot continue with its policy that prohibits all “patently offensive” references to sex, sexual organs and excretion because the policy is too vague and chills speech. The 2nd U.S. Circuit Court of Appeals in Manhattan struck down the 2004 Federal Communications Commission policy in the case Fox Television Stations, Inc. v. FCC.

Broadband Breakfast Staff

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WASHINGTON, July 13, 2010 – A federal appeals court on Tuesday said the Federal Communications Commission cannot continue with its policy that prohibits all “patently offensive” references to sex, sexual organs and excretion because the policy is too vague and chills speech.

The 2nd U.S. Circuit Court of Appeals in Manhattan struck down the 2004 Federal Communications Commission policy in the case Fox Television Stations, Inc. v. FCC.

“By prohibiting all ‘patently offensive’ references to sex, sexual organs and excretion without giving adequate guidance as to what ‘patently offensive’ means, the FCC effectively chills speech, because broadcasters have no way of knowing what the FCC will find offensive,” the appeals court wrote.

FCC Chairman Julius Genachowski said, “We’re reviewing the court’s decision in light of our commitment to protect children, empower parents, and uphold the First Amendment.”

Broadband Breakfast is a decade-old news organization based in Washington that is building a community of interest around broadband policy and internet technology, with a particular focus on better broadband infrastructure, the politics of privacy and the regulation of social media. Learn more about Broadband Breakfast.

Big Tech

Lina Khan Pitches Ideas For Regulating Big Tech In Nomination Hearing

Senate Commerce Committee considers nominations for Lina Khan, Bill Nelson and Leslie Kiernan.

Tim White

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Screenshot of Lina Khan at Senate hearing

April 21, 2021 – The Senate Commerce, Science and Transportation Committee held a hearing Wednesday to consider the nominations of Lina Khan as a commissioner at the Federal Trade Commission, former Sen. Bill Nelson for administrator of NASA and Leslie Kiernan as general counsel for the Department of Commerce.

Khan’s nomination signals a strong stance on antitrust, especially in the tech industry, for the Biden administration, as Khan has been a vocal critic of the concentration of market power for companies like Google, Facebook and Amazon. Previous to her current position as a professor at Columbia Law School, she worked on the House antitrust subcommittee in publishing a report against anti-competitive behavior in big tech, and authored the article “Amazon’s Antitrust Paradox.”

“Given the interest of this committee, from left to right, from liberal to conservative, in taking on antitrust and privacy issues, I can’t think of a more qualified person to be considered for the FTC,” said Sen. Amy Klobuchar, D-Minnesota, in introducing Khan to the committee hearing.

“Lina Khan is, in short, an out-of-the-box thinker, a pioneer in competition in policy, who is already a noted expert in her field. Her deep understanding of how markets influence our lives, and how the law should function, is exactly what we need at the FTC.”

In response to various questions from senators on the committee, Khan spoke on her experience as a journalist and other work that allowed her to document competition and abusive business practices, she said.

“This work taught me the importance of fair competition and the critical role that the antitrust laws play in encouraging business dynamism and promoting widespread prosperity,” she said.

In response to a question about regulating social media companies, Khan identified two options. “One is, enforcing competition laws and ensuring that these markets are competitive,” she said. “The other is, if we instead recognize that perhaps there are certain economies of scale, network externalities, that instead are going to lead these markets to stay dominated by a very few number of companies, then we need to apply a different set of rules.”

Agencies need to be on same information wavelength

She also spoke on what she called “asymmetries” of information and market power between tech companies and federal agencies and regulators. The FTC needs to use their information collection capacity to mitigate some of these information gaps, she said. Social media has black boxes and proprietary algorithms that can sometimes make it difficult to know what is going on, she said.

Khan responded to a question about what she would have done differently to handle the tech mergers during the Obama administration. Evidence has come to light since those mergers happened that suggest missed opportunities the FTC could have taken, she said. The decisions made then was partly due to information asymmetries, and also because of the assumption that digital markets move really quickly, so the market would regulate itself with new entrants and technology, she said.

But we now know these markets have significant network externalities and other reinforcing advantages of data in ways that make them more “sticky,” and we know now to be more vigilant, she said.

On conflicts of interest

She also responded to a question about possible conflicts of interest as a FTC commissioner given her previous work on antitrust in the tech industry, saying that “I would be approaching these issues with an eye to the underlying facts and empirics and following the evidence where it goes.”

On a specific question for recusing herself, she said there are “a set of recusals required in federal ethics laws where you are making categorical determinations before taking office. With regards to prejudgment, those are really resolved on a case-by-case basis.”

For Nelson’s nomination as the NASA administrator, who was a former senator that served on that committee, he received universal applause across both political aisles. “Everybody here knows Senator Nelson, you know his character, you know his integrity, you served alongside him, so that is not a question that needs to be answered at all,” said Sen. Marco Rubio, R-Florida. “I think this is an inspired choice, I can’t think of a better American alive to serve in this role.”

The committee did not vote on the nominations, setting that action for a later date.

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Antitrust

Lawmakers And Newsmakers Tackle Google and Facebook Market Power

Sen. Klobuchar, Rep. Cicilline and experts discuss antitrust, big tech and local journalism.

Tim White

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Screenshot of Amy Klobuchar taken from Open Markets Institute event

April 21, 2021 – Google and Facebook pose a serious threat to local journalism and—without that journalism—democracy generally, said panelists at an Open Markets Institute event held Tuesday.

With free market competition as a backdrop, the participants discussed antitrust legislation and regulation, data privacy, and funding for journalism.

Sen. Amy Klobuchar, D-Minnesota, who chairs the Senate judiciary’s subcommittee on antitrust, spoke on the recent tussle between Facebook and Australia over news feeds on the social media platform. “That is the very definition of a monopoly — when you can hold a country hostage simply because they want to make sure the content is paid for from the news,” she said.

Both Google and Facebook face several anti-competitive lawsuits from the Department of Justice, states attorneys general, federal agencies and several news publications that claim the big tech’s behavior has led to a monopoly in the digital space.

Google controls over 90 percent of the search engine market and Facebook has eaten up all of their competitors including Instagram and WhatsApp to maintain a social media monopoly, Klobuchar said. She also looked beyond just the tech industry: “America’s competition problem as well, as you all know, isn’t just limited to digital markets. It’s part of a broader problem that affects our entire economy from cat food to caskets,” she said.

“The consequences of the collapse of local news are catastrophic; it’s hard to overstate how severe a threat this is to democracy,” said Steve Waldman, president at Report for America, a national organization dedicated to supporting local journalism.

“We have two dominant platforms who sit between us and our readers, who extract the value of our content, and then they systematically deliver it to the users—our readers—in a highly predictive way so that the users stay within their walled gardens,” said Danielle Coffey, senior vice president at News Media Alliance.

The platforms continue extracting user data that they use as a currency, then when we do get readers, we only get a small percentage of ad revenue, she said. We get hit on the distribution side and the ad revenue side, she added.

Minnesota’s Attorney General Keith Ellison focused on the importance of information for democracy. People need to have access to information, which primarily comes from news sources, and those news sources need funding, he said. Without funding, news publications will close or change, and it will challenge the very foundation of our society, because we need informed people who can make decisions, he said.

No leverage on big tech

“We see our bargaining power with Google and Facebook as zero,” said Randy Lebedoff, senior vice president at the Minneapolis’ Morning Star publication. The digital advertising we get from the online platforms doesn’t make up for the drop in print advertising, because “someone else is getting paid for marketing our articles,” she said.

Although Klobuchar focused mainly on competition in tech industry, she also expressed concern over misinformation on social media. America needs to use free market capitalism that will foster new companies with “privacy bells and whistles” and better policies to control misinformation, she said.

Social media has impacted consumer readership through “the rise of what people call fake news, which is just really low-quality, click-bait propaganda,” said Julia Angwin, editor-in-chief at the Markup, a news organization that investigates big tech.

Propaganda used to be expensive to produce, but we’ve decentralized that and now it’s cheap and possible to make money from, she said. The tech companies elevate misinformation through news feeds with their algorithms and then take no responsibility for it, she said.

Legislation to address concerns

“It is high time for privacy legislation in the United States to protect consumers, we’re going to need something at the federal level. It’s going to be a patchwork mess if we approach it only at a state level,” Yale University fellow Dina Srinivasan said.

In February, Klobuchar introduced the Competition and Antitrust Law Enforcement Reform Act, S.225, legislation that would target anti-competitive behavior. The bill would increase funding for regulators at the Justice Department’s Antitrust Division and the Federal Trade Commission, and shift the burden of proof in mergers to the company to prove their acquisition does not harm a competitive market, among other things.

Rep. David Cicilline, D-Rhode Island, along with several other members of Congress, introduced the bipartisan Journalism Competition and Preservation Act in March, intended to allow small news publishers to collectively negotiate with online platforms to “protect Americans’ access to trustworthy sources of news online,” read the press release.

The bill would allow coordination by news publishers if it “(1) directly relates to the quality, accuracy, attribution or branding, or interoperability of news; (2) benefits the entire industry, rather than just a few publishers, and is non-discriminatory to other news publishers; and (3) is directly related to and reasonably necessary for these negotiations, instead of being used for other purposes,” said the statement.

But Waldman said the Klobuchar and Cicilline bills would likely not help save local news. America needs to look at other policy steps to help local news, he said. He suggested donations toward local journalism efforts.

If there was a slight shift toward viewing journalism as an important part of a community’s health, it would be transformative, he said. It would take $1 to $2 billion of well-targeted money in local news that would double the number of local reporters, which would only be about half of one percent of philanthropic giving, he said.

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Big Tech

Government’s Reactive Nature Hobbling Tech Regulation, Expert Says

Congress may need another big tech breach to move earnestly on regulation, says consultant.

Samuel Triginelli

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Screenshot of Steve Haro at FiscalNote event

April 12, 2021 – The reactive nature of Congress to data crises means another breach of citizens’ privacy may be needed to spurn the next big legislative move, said a former congressional chief of staff.

“We still have questions to answer how to deal with technology dominance. We are not there yet because, unfortunately, Congress, for the most part, tends to act in response to crisis,” said Steve Haro, who is currently a government affairs consultant and was a former assistant secretary of commerce.

During a discussion sponsored by FiscalNote and CQ Rollcall, experts joined in a conversation on the current state of public policy for the tech industry and how influential Congress and the Biden-Harris admission will be on dealing with big tech.

Among the discussed issues was how the government will deal with intermediary liability provision Section 230.

Lawmakers have wondered whether the provision — which protects platforms from legal liability for posts by their users — offers too much protection to social networks when it comes to content moderation and disinformation. This central premise has spurned calls for a reform of Section 230; a number of Democrats have proposed their own bill to keep much of the protections except for paid posts.

“I do not believe 230 needs change, but that doesn’t mean I don’t have concerns,” Haro said. “I believe there is collective agreement this is still a necessary law, and it has worked. It has allowed the internet to build do what has become, good or bad.”

Haro pointed to the congressional hearings into Facebook’s handling of the Cambridge Analytica scandal three years ago, which saw the scraping of millions of user accounts without their consent. The result did not see substantial progress on regulations. “We might need another crisis to spur Congress into action,” Haro said.

Michael Drobac, principal at the law firm Dentons, said “we are not there, and I would say the thing that has been most present and clear is that in most of these hearings” the members of Congress are still trying to understand the technology to make a meaningful impact.

“The reality is that section 230 is as important today as it was when it was passed,” Haro said.

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