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FTC and 17 States Sue Amazon, Gomez Sworn in at FCC, South Central Broadband

The FTC complaint alleges anti-discounting measures that deter sellers from offering lower prices.

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Photo of FTC Chair Lina Khan

September 26, 2023 – The Federal Trade Commission and 17 state attorney generals filed an antitrust lawsuit against Amazon on Tuesday alleging that online retail utilizes anticompetitive and unfair strategies to illegally maintain its dominance in e-commerce.  

The FTC and the states said that the global conglomerate is breaking the law through engaging in exclusionary conduct that prevents other companies from growing or emerging. It also cites that by constraining the competition through “price, product selection, quality, and preventing its current or future rivals from attracting a critical mass of shoppers and sellers” Amazon is ensuring there is no threat to its dominance. 

“Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies,” FTC Chair Lina Khan said. “The complaint sets forth detailed allegations noting how Amazon is now exploiting its monopoly power to enrich itself while raising prices and degrading service for the tens of millions of American families who shop on its platform and the hundreds of thousands of businesses that rely on Amazon to reach them. Today’s lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition.”

The FTC and states alleged that Amazon’s “anticompetitive conduct” occurs in the online superstore market and the market for online marketplace services. The tactics include, according to the complaint, “anti-discounting measures that punish sellers and deter other online retailers from offering prices lower than Amazon” and “conditioning sellers’ ability to obtain ‘Prime’ eligibility for their products,” which has limited their competitors’ ability to compete against. 

Additionally, the FTC and states cite Amazon’s overwhelming amount of paid advertisements, search results which favor their own products, and costly sellers’ fees as “enormous monopoly rents from everyone in its reach.” 

In a public statement responding to the lawsuit, Center for Law & Economics President and Founder Geoffrey A. Manne stated that it was “expected” but also argued that the “extreme demands greatly undermine the chances that the agency will prevail in court.”

“The case could greatly harm consumers, all in an attempt to shift the course of U.S. antitrust policy against the will of Congress and the courts,” said Manne.

The 17 states that joined the lawsuit are Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, and Wisconsin. 

Gomez sworn in as FCC Commissioner, appoints staff members

Anna Gomez on Monday was sworn in as an FCC Commissioner and announced the appointment of four staff members to her office.

“I am humbled and honored that President Biden and the United States Senate have entrusted me with the privilege to serve the people of the United States as a Commissioner of the Federal Communications Commission,” Gomez said. “I look forward to working with Congress, Chairwoman Rosenworcel, my fellow Commissioners, and the talented and dedicated FCC staff to ensure that every person in every community, of every geography and income, has access to modern telecommunications services.”  

Gomez’s staff will consist of Deena Shetler, acting chief of staff and legal advisor for media and international, Edyael Casaperalta, acting legal advisor for wireless, public safety and consumer protection, Hayley Steffen, acting legal advisor for wireline and space, and Anna Holland, acting executive assistant.  

“I am elated that these dedicated talented public servants have agreed to join my office,” Gomez said. “They bring extensive experience in communications policy, the Commission, and working with its broad range of stakeholders. I know they will provide outstanding advice and I look forward to getting to work with them to ensure the Commission’s actions meet the needs of all people.”

With Gomez now sworn in as a commissioner, Democrats at the FCC now have a 3-2 majority. 

Internet providers merge to create broadband company serving Arkansas, Oklahoma, and Texas 

Two internet service providers, 360 Communications and 903 Broadband, have merged together to create a new company, 360 Broadband, announced Thursday. 

360 Broadband’s mission is to provide affordable data, reliable voice and other related services to states in the South Central Region. The states receiving service are Oklahoma, where 360 Communications originated from, Texas, home of the former 903 Broadband, and Arkansas.

Upon merging in August, 360 Broadband had roughly 16,000 subscribers and 88 employees over 10,000 square miles and 30 counties, 20 in Oklahoma, six in Texas, and four in Arkansas. The company has an overall goal of reaching 50,000 subscribers in the three states.

“We are delighted to join forces to provide a high-quality, reliable broadband experience in rural and smalltown areas of Oklahoma, Texas, and Arkansas,” said George Breeden, CEO of 360 Broadband. 

Company officials said that will seek to receive local, state, and federal funding for rural broadband network expansions. 360 Broadband received over $33 million in private financing from Oklahoma City-based Fischer Industries.

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Nvidia Navigates Export Rules, FCC on High-Cost, Kansas Awards Fiber Grants

Department of Commerce continues to combat the export of U.S. semiconductors to adversarial nations

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Photo of U.S. Department of Commerce Secretary Gina Raimondo

December 4, 2023 – Commerce Secretary Gina Raimondo said Saturday that the department is ready and willing to impose further export restrictions on any products made by graphics card maker NVIDIA that assists adversarial nations in developing their artificial intelligence capabilities, according to a story from Fortune

“If you redesign a chip around a particular cut line that enables them to do AI, I’m going to control it the very next day,” Raimondo said at the Reagan National Defense Forum in Simi Valley, California, according to Fortune. 

Nvidia, which has been focusing on its development as an AI company, has restructured its advanced chips to access the Chinese market, which is worth at least $400 million in sales. In response to exports restrictions imposed by Commerce in August 2022, Nvidia tweaked its A100 chip series to comply with U.S. rules, limiting the processing capabilities and re-releasing the chips under a new name, the A800 series.

In October 2023, Commerce imposed additional licensing requirements based on performance threshold to limit the export of high-performance computing chips, to include the A800 series. Less than a month later, Nvidia had introduced a series of GPUs with limited computing capabilities in compliance with Commerce export requirements, made available to Chinese customers.

Commerce has said it is trying to limit risks of the chips being used in foreign military operations.

In response to Secretary Raimondo’s recent claims, Nvidia told Broadband Breakfast, “We are engaged with the U.S. government and, following the government’s clear guidelines, are working to offer compliant data center solutions to customers worldwide.”

The advanced chips are central components to the rise of artificial intelligence, autonomous machines, cloud and high-performance computing.

FCC issues guidance to high-cost support recipients 

The Federal Communications Commission released guidance Wednesday for recipients of high-cost support, outlining the coordination necessary between the recipients, state broadband offices and Tribal entities to avoid overbuilding in areas supported by multiple broadband programs. 

The FCC notes that the recipients of the high-cost programs, which include the Rural Digital Opportunity Fund, Enhanced Alternative Connect America Cost Model, and Connect America Fund, must participate in the broadband map challenge process as states prepare to deliver money from the $42.5-billion Broadband Equity, Access, and Deployment program.

“Full participation of high-cost support recipients in BEAD Program challenge processes is critical to ensuring that the FCC’s high-cost funding is not duplicated by the BEAD Program,” the FCC said in the guidance. 

“Participation in the BEAD Program challenge process also ensures state broadband offices receive information about high-cost program supported deployments beyond the valuable information provided on the Broadband Funding Map,” it added. 

These recipients should coordinate with their respective state broadband office by taking steps to ensure that the National Broadband Map accurately reflects the locations they serve, the speeds they provide to the locations, and the technologies they are using to serve those locations, the FCC emphasized. 

In addition, the FCC guidance emphasizes that high-cost support recipients should engage with each relevant Tribal government annually to obtain the necessary consent, permits, and other approvals as soon as practicable, even if the recipient has not begun deployment. 

The Tribal engagement obligation set by the FCC represents an opportunity for Tribal governments and high-cost support recipients to coordinate on many issues critical to the deployment and adoption of communications technologies on Tribal lands.

Kansas awards $28.5 million in state broadband grants

Kansas announced it is awarding $28.5 million in broadband grants Wednesday to twelve internet service providers through the state’s Lasting Infrastructure and Network Connectivity program. All of the funding dedicated to broadband infrastructure is going toward deploying fiber technology.

One of the largest awards is to the Prairie Band Potawatomi Nation, a native American tribe, which will bring fiber-to-the-home connectivity to all of the nation’s 204 residences, as well as to 10 Tribal government services locations on the PBPN reservation. 

Additionally, included in the awards is funding for Kansas’ first carrier-neutral Internet Exchange Point, which will be located on the campus of Wichita State University. The IXP stands to reduce IP transit pricing to below 10 cents per megabit, an expected 90% reduction in cost as compared to current transport and transit pricing through Kansas City, Missouri. 

The awards will also expand middle mile infrastructure through two economically distressed counties in north central Kansas. 

The state funds will be matched by the ISPs for a total of $33.9 million in additional investments.

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Supply Chain Improvements, Bill for Broadband in Public Parks, FCC Grants Alert System Compliance Extension

The Biden administration announced Wednesday a list of new measures to promote supply chain resiliency.

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Photo of Congressman Raúl Grijalva, taken by Gage Skidmore 2018. 

November 30, 2023 – President Joe Biden announced at an inaugural meeting Wednesday new measures to improve national supply chain resilience, many of which are targeted at bettering semiconductor manufacturing. 

These new measures will see the development of a geospatial mapping protocol that will be used to account for and track trade disruptions of raw materials, with a special focus on ones that are involved in semiconductor manufacturing.

Additionally, the US plans to develop a resilience center to assess risks and supply chain vulnerabilities specifically inside national ports alongside looking at how to better implement CHIPS and Science funding.

In July of 2022, the Biden administration signed into law the CHIPS and Science Act, which was broadly supported by lawmakers, putting $52 billion into semiconductor research and development and a 25 percent investment tax credit to promote manufacturing. 

More recently, Biden has announced tech innovation hubs supported by CHIPS Act funds, four of which will focus directly on improving semiconductor production and manufacturing. 

Legislation put forth to expand broadband to public parks 

Congressman Bruce Westerman, R-Arkansas, and Congressman Raúl Grijalva, D-Arizona, introduced legislation Wednesday that would bring broadband connectivity to public parks and lakes. 

The Expanding Public Lands Outdoor Recreation Experiences Act would include increasing broadband connectivity in those visitor centers and surrounding areas as well as create digital passes for visitors to use when going to those parks. 

“The increasing popularity of outdoor recreation is a boon for local economies and job creation, but we must make sure our public land management agencies have the tools, resources, and staff they need to keep up,” said Grijalva. 

The broader legislation looks to improve access to public lands and waters, modernize visitor experiences and reduce overcrowding. 

FCC granted emergency alert development extensions to broadcasters

The Federal Communications Commission granted extensions to certain national broadcasters Wednesday, allowing them more time to acquire equipment needed to comply with national emergency alert system requirements. 

There are two ways that broadcasters can transmit emergency messages, either to devices connected to the internet using what is called the Integrated Public Alert and Warning System or over audio channels, which is referred to as the legacy emergency alert broadcast system. 

Historically, messages sent via IPAWS transmit more information to the recipient than ones that are formatted for being transmitted via the legacy system. Because of that, in 2022 the FCC required emergency broadcasters to alert constituents via the IPAWS unless they were unable to. 

Broadcasters were required to comply with this by December 12 of this year. However the National Association of Broadcasters and REC Networks, a broadcast advocacy group, filed a joint request for a 90-day compliance extension.

They explained that Sage Alerting Systems, a manufacturer of firmware needed to encode and decode emergency messages, is not able to meet supply demands for broadcasters to update equipment by the December 12 deadline. 

As a result, the FCC waived the deadline and granted a 90-day extension to emergency broadcast participants who are customers of Sage Alerting Systems. 

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FCC Fines TracFone, Rip and Replace Extensions, Kansas State Internet Exchange Point

The FCC’s Enforcement Bureau has entered into a settlement with TracFone for subsidy program violations.

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Photo of Kansas Gov. Laura Kelly taken by K-State Research and Extension, 2023.

November 29, 2023 – The Federal Communications Commission announced Wednesday that the Enforcement Bureau and TracFone Wireless, a Verizon Subsidiary, have reached a $23.5 million settlement for TracFone’s violation of broadband subsidy program rules

After TracFone was acquired by Verizon, the company self-reported instances in which it violated the FCC’s regulatory rules for the Lifeline and Emergency Broadband Benefit programs, according to the agency  

During an investigation into TracFone, the agency found that the company reported improperly claiming support for customers jointly-enrolled in subsidy programs and improperly using inbound text messages to make claims for customers who had not been using those services for at least 30 days, according to a press release.

According to the FCC, TracFone also conceded that some of their field enrollment representatives used false tax documents to enroll customers in the lifeline and EEB programs.

“Whether attributable to fraud or lax internal controls, or both, we will vigorously pursue allegations of misconduct that harms critical FCC programs designed to help those most in need of communications-related services,” said Enforcement Bureau Chief Loyaan A. Egal.

As part of the settlement, TracFone has entered into an improvement plan agreement with the Enforcement Bureau.

Wireline Bureau grants more rip and replace extensions 

The FCC’s Wireline Competition Bureau announced in an order Wednesday that it has granted rip and replace extensions to Montana providers Triangle Telephone Cooperative Association Inc. and Triangle Communication System Inc.

The rip and replace program requires service providers to remove and replace any equipment they use that was manufactured by Huawei Technologies Company or ZTE Corporation that were installed prior to June 30, 2020, because of security concerns. 

Triangle Telephone filed for an extension on October 18 and on November 10th, requesting an extension to replace the equipment by Map 29, 2024 as opposed to their original deadline of November 29 of this year.

Triangle Communications filed their request for extension on October 18 and November 16 of this year requesting for additional time up until July 13, 2024, as opposed to January 13, 2024. 

Both petitioners cited supply chain disruptions and delayed equipment delivery as factors preventing them from replacing existing equipment alongside poor weather conditions and a decreasing number of employees. 

Both providers were granted the extensions they had requested. 

Additional funding from Congress has been requested by president Joe Biden to finance the rip and replace program, as a report published by the Federal Communications Commission in July of 2022 noted that the program’s initial $1.9 billion would not be enough to support providers. 

In October of this year the FCC’s Wireline Bureau issued extensions to two other providers who cited that they were unable to completely replace the equipment due to lack of funding. 

Kansas awards $5 million to internet exchange point 

Kansas Gov. Laura Kelly on Wednesday announced that the state had awarded $5 million to help fund the construction of the first carrier-neutral internet exchange point at Wichita State University.

The construction of this carrier-neutral internet exchange point will allow for the operation of cloud services and streaming content networks to operate more efficiently alongside local and regional internet networks, explained a press release. 

The endeavor will be undertaken by Connected Nation, a Kentucky non-profit, and Hunter Newby, founder of Newby Ventures investment firm, working with them to build and operate the internet exchange facility. 

Tom Ferree, CEO of Connected Nation, said that the exchange point will support Wichita State and the economy well “by improving the entire regional broadband landscape — preparing Wichita, and Kansas more broadly, for the future evolution of the Internet and all that it will enable.”

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