FCC Gridlock, FTC’s Investigating Amazon-MGM, Brendan Carr’s USF Proposal Raises Questions

July 12, 2021—Observers say the Federal Communications Commission won’t be able to implement some of President Joe Biden’s wishes – including his urging Friday for the agency to restore pre-Donald Trump net neutrality rules – because the White House still has yet to nominate a fifth, tie-breaking commissioner to the FCC.

For months, advocacy groups have been urging the president to nominate a third Democrat to the commission, and it’s unclear what’s causing the delay. Observers note that the FCC could struggle

Considering it can take months for the Senate to approve FCC nominations – and because the FCC is deadlocked with two Democrat and two Republican commissioners – some say that Biden’s delay in appointing the next commissioner could come at the cost of losing FCC direction for the 2021 year, as the stalemate brings the commission into gridlock.

On Friday, Biden urged the agency to commit to going back to former President Barack Obama-era net neutrality principles, which would bar telecommunications companies from influencing the traffic over their networks. California has already instituted it own net neutrality rules, which AT&T said forced the company to remove free app services.

Biden also asked the FCC to take steps to boost price transparency and competition in broadband.

The order encourages the FCC to “prevent ISPs from making deals with landlords that limit tenants’ choices.” While the FCC bans exclusive agreements for telecom services to apartment buildings, the problem has not been rooted out nationwide.

Federal Trade Commission opens formal investigation into Amazon’s MGM buy

The Federal Trade Commission officially opened a formal investigation into Amazon’s acquisition of major entertainment studio, MGM, the Information reported on Friday.

Amazon announced its deal to acquire MGM for $8.45 billion in late May, but it was largely suspected that the merger would receive scrutiny from government agencies. In June, Senator Elizabeth Warren, D-Massachusetts, urged the agency to give the deal a “meticulous” review in a letter addressed to FTC Chairwoman Lina Khan.

The FTC is focused on “the larger implications of the deal for Amazon’s market power,” the Verge reported, citing the Information’s report, itself based on two anonymous sources. “The FTC is wary of whether the deal will illegally boost Amazon’s ability to offer a wide array of good and services and is not just limited to content production and distribution.”

Khan is a longstanding critic of Big Tech, specifically Amazon, and published an article titled “Amazon’s Antitrust Paradox” in the Yale Law Journal in 2017. Her ideas are popular among progressive circles seeking to reign in Big Tech’s power, but her special interest in Amazon has led the company to file a recusal motion, calling for her to remove herself from proceedings involving Amazon.

Op-ed raises questions for Universal Service Fund reform

Justin Hurwitz, a law professor at the Nebraska College of Law, said in an op-ed published Friday on the Free State Foundation website that he supports reforming the Universal Service Fund by forcing big technology companies to contribute to it, but key concerns need to be addressed before that can happen.

Hurwitz was using as his springboard FCC Commission Brendan Carr’s proposal, written in a Newsweek op-ed in May, calling for Big Tech to contribute to the fund, which brings basic telecommunications service to underserved institutions and communities across the country. The fund currently relies on voice revenues – the portion of telecom company revenues that has been consistently dwindling, which has brought into focus the fund’s sustainability.

While he called Carr’s proposal “unequivocally better than the status quo,” he said Congress – not the FCC – must first define what constitutes “Big Tech” and who, exactly, needs to contribute to the fund before such a reform can take place.

For example, considering how many online readers the New York Times pulls, he questions whether they would be defined as “Big Tech” for the purposes of contributing to the fund. If not the New York Times, he asks, what about Amazon? Why should Amazon be required, but not the New York Times?

Hurwitz noted that allowing the FCC to decide those questions could give them strong regulating power in non-communications-based markets, adding future regulation and a restructuring of the USF should be left to Congress, where it is more democratically responsible to the people than is the FCC.