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Economist Warns of Customer Losses if Broadband Revenues Find Way in Universal Service Fund

A number of players have pitched the idea of having big tech platforms pay into the basic telecommunications fund.

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Screenshot of Hal Singer, managing director of Econ One Research

WASHINGTON, April 21, 2022 – An economist argued Thursday that expanding the contribution base of the Universal Service Fund to broadband revenues will reduce adoption of broadband services by millions.

Hal Singer, managing director of Econ One Research, said during a panel hosted by the TPRC that a broadband revenue surcharge on customer bills will see a total subscriber loss of nearly 10 million. Currently, the fund, which is used to deliver basic telecommunications services to rural and low-income areas of the country, is derived from voice service revenues passed down to consumers.

Singer published those findings last year alongside his colleague Ted Tatos in a paper that proposed that the Universal Service Fund be subsidized by digital advertising revenue, a space dominated largely by two large technology players: Facebook and Alphabet, parent company of Google.

Advocates for expanding the fund to include broadband revenues have argued that the contribution percentage against revenues would be low enough so that adoption would be unaffected.

The debate about what to do about the sustainability of the fund – called into question because of its reliance of largely one source of service revenues – have swept the industry. The Federal Communications Commission is currently studying the fund’s future, with submissions into the agency including proposals to expand the fund to include broadband revenues, contributions from big technology platforms and ditching all that and taking the fund’s source from general taxation.

The TPRC panel included Carol Mattey of Mattey Consulting and Roslyn Layton, senior vice president at Strand Consult and former program committee chair of the TPRC. Mattey, whose report last year on the matter pitched the idea of expanding the base to include broadband revenues, defended the position, stating that the FCC cannot wait around for three years for the problem to be solved and should act as soon as possible.

Mattey has previously said that the FCC has the jurisdiction to unilaterally expand the fund’s base, but that notion is currently being challenged in court. Singer said the FCC would need to get Congress involved to expand the base to include digital advertising revenue.

For Layton, the issue also involves the ongoing sustainability of the networks. She reiterated a previous point she jointly made with a number of academics that it’s unfair for consumers and internet service providers to shoulder the load of supporting the fund and that, because big tech platforms and video streaming services consume so much of the bandwidth on the networks, they must be brought into the equation.

Free Speech

Panel Hears Opposing Views on Content Moderation Debate

Some agreed there is egregious information that should be downranked on search platforms.

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Screenshot of Renee DiResta, research manager at Stanford Internet Observatory.

WASHINGTON, September 14, 2022 – Panelists wrangled over how technology platforms should handle content moderation at an event hosted by the Lincoln Network Friday, with one arguing that search engines should neutralize misinformation that cause direct, “tangible” harms and another advocating an online content moderation standard that doesn’t discriminate on viewpoints.

Debate about what to do with certain content on technology platforms has picked up steam since former President Donald Trump was removed last year from platforms including Facebook and Twitter for allegedly inciting the January 6, 2021, storming of the Capitol.

Search engines generally moderate content algorithmically, prioritizing certain results over others. Most engines, like Google, prioritize results from institutions generally considered to be credible, such as universities and government agencies.

That can be a good thing, said Renee DiResta, research manager at Stanford Internet Observatory. If search engines allow scams or medical misinformation to headline search results, she argued, “tangible” material or physical harms will result.

The internet pioneered communications from “one-to-many” broadcast media – e.g., television and radio – to a “many-to-many” model, said DiResta. She argued that “many-to-many” interactions create social frictions and make possible the formation of social media mobs.

At the beginning of the year, Georgia Republic representative Marjorie Taylor Greene was permanently removed from Twitter for allegedly spreading Covid-19 misinformation, the same reason Kentucky Senator Rand Paul was removed from Alphabet Inc.’s YouTube.

Lincoln Network senior fellow Antonio Martinez endorsed a more permissive content moderation strategy that – excluding content that incites imminent, lawless action – is tolerant of heterodox speech. “To think that we can epistemologically or even technically go in and establish capital-T Truth at scale is impossible,” he said.

Trump has said to be committed to a platform of open speech with the creation of his social media website Truth Social. Other platforms, such as social media site Parler and video-sharing website Rumble, have purported to allow more speech than the incumbents. SpaceX CEO Elon Musk previously committed to buying Twitter because of its policies prohibiting certain speech, though he now wants out of that commitment.

Alex Feerst, CEO of digital content curator Murmuration Labs, said that free-speech aphorisms – such as, “The cure for bad speech is more speech” – may no longer hold true given the volume of speech enabled by the internet.

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Big Tech

Twitter Whistleblower Says Company Needs to Work to Permanently Delete User Data

Meanwhile, Twitter shareholders approved a deal to sell the company to Elon Musk, who wants out.

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Photo of Peiter Zatko at Tuesday's Senate Judiciary hearing

WASHINGTON, September 14, 2022 – Twitter’s former head of security and now company whistleblower told a Senate Judiciary committee Tuesday that Twitter must put more resources into trying to permanently delete user data upon the elimination of accounts to preserve the security and privacy of users.

Peiter Zatko, who was fired from Twitter in January due to performance issues, blew the whistle on the company last month by alleging Twitter’s lack of sufficient security and privacy safeguards poses a national security risk. He alleged that the company does not delete user data when accounts are deleted.

On Tuesday, Zatko told the Senate Judiciary committee that the company needs to take the step of ensuring that the personal information of users are deleted when they destroy their accounts.

He alleged company engineers can access any user data on Twitter, including home addresses, phone numbers and contact lists, and sell the data without company executives knowing.

“I continued to believe in the mission of the company and root for its success, but that success can only happen if the privacy and security of Twitter users and the public are protected,” Zatko said.

The Wall Street Journal reported Tuesday that Twitter investors approved SpaceX CEO Elon Musk’s takeover of the company, despite the billionaire trying to back out of the deal allegedly over a lack of information about the number of fake accounts on the platform. The company and Musk are currently in court battling over whether he must follow through on the deal.

Musk’s lawyer has asked the court to delay the trial — scheduled for mid-October — to allow his client to investigate the whistleblower’s claims, according to reporting from Reuters.

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Big Tech

A White House Event, Biden Administration Seeks Regulation of Big Tech

Participants voiced concerns over alleged abuses by big tech companies.

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Photo of President Joe Biden

WASHINGTON, September 9, 2022 – President Joe Biden on Thursday called for a federal privacy standard, Section 230 reform, and increased antitrust scrutiny against big tech.

“Although tech platforms can help keep us connected, create a vibrant marketplace of ideas, and open up new opportunities for bringing products and services to market, they can also divide us and wreak serious real-world harms,” according to a White House readout from the administration’s listening session on Thursday.

Participants at the White House event voiced concerns over alleged abuses by big tech companies.

A new data privacy regime?

The Biden administration called for “clear limits on the ability to collect, use, transfer, and maintain our personal data.” It also endorsed bipartisan congressional efforts to establish a national privacy standard.

Last June, Rep. Frank Pallone Jr., D-N.J., introduced the American Data Privacy and Protection Act. The bill gained substantial bipartisan support and was advanced by the House Energy and Commerce Committee in July.

In the absence of federal privacy laws, several states drafted privacy laws of their own. The Golden State, for instance, implemented the California Consumer Privacy Act in 2018. The CCPA’s protections were extended by the California Privacy Rights Act of 2020, which goes into effect in January 2023.

Biden maintains his position seeking changes to Section 23o

“Tech platforms currently have special legal protections under Section 230 of the Communications Decency Act that broadly shield them from liability even when they host or disseminate illegal, violent conduct or materials,” argued the White House document.

Biden’s hostility towards Section 230 is not new. Section 230 protects internet platforms from most legal liability that might otherwise result from third party–generated content. For example, although an online publication may be guilty of libel for a news story it publishes, it cannot be held liable for slanderous reader posts in its comments section.

Critics of Section 230 say that it unfairly shields rogue social media companies from accountability for their misdeeds. And in addition to Biden and other Democrats, many Republicans are dislike the provision. Sens. Ted Cruz, R-Texas, and Josh Hawley, R-Missouri, argue that platforms such as Twitter, Facebook, and YouTube discriminate against conservative speech and therefore should not benefit from such federal legal protections.

Section 230’s proponents say that it is the foundation of online free speech.

Ramping up antitrust

“Today…a small number of dominant Internet platforms use their power to exclude market entrants,” Thursday’s press release said. This sentiment is consonant with the administration’s antitrust policies to date. Indeed, Lina Khan, chair of the Federal Trade Commission, was a vocal antitruster in the academy and has greatly expanded the scope of the agency’s antitrust efforts since her appointment in 2021.

In the Senate, Sen. Amy Klobuchar, D-Minnesota, is sponsoring the American Innovation and Choice Online Act, a bill that bans large online platforms from engaging in putatively “anticompetitive” business practices. The measure was approved by the Judiciary Committee earlier this year, and, though it was stalled over the summer to make way for other Democratic legislative priorities, it may come for a vote this fall.

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