Today we submitted a comment in response to the Federal Communications Commission's request for information regarding the elimination of unnecessary regulatory burdens. Click here to download a PDF of the full comment.
Re: Delete, Delete, Delete (GN Docket No. 25-133)
Dear Ms. Dortch:
The Foundation for American Innovation (FAI) welcomes this proceeding and commends Chairman Carr for its initiation. All government agencies should regularly review their rules and regulations to determine whether their benefits, or purported benefits, outweigh their costs—including the burdens placed on businesses, government resources spent enforcing the rules, and potential market distortions. The Federal Communications Commission (Commission or FCC) oversees highly regulated industries, including broadband, wireless communications, broadcast radio and television, and multichannel video programming distributors (MVPDs). The markets in which these companies compete have overwhelmingly become more competitive and dynamic since much of the existing regulatory structure was created. It is therefore particularly important that the Commission look to reduce regulatory burdens on these industries.
We offer the following recommendations for rules that the FCC should delete or consider deleting or reforming to minimize unnecessary burdens on businesses and market distortions, free up capital for higher and better uses, reduce government waste, and increase government efficiency. Importantly, this list should not be viewed as the only rules and regulations we support, or would support, eliminating.
Broadband Policy and Deployment Rules
E-Rate Expansion
The FCC recently set a new record, announcing that the universal service contribution factor—the tax that Americans’ pay on their phone bills—rose to nearly 37%. The Universal Service Fund (USF) serves important functions, but the program has also long suffered from waste, fraud, and abuse, and the constitutionality of its administration is being litigated before the Supreme Court.
Despite the rise in the USF tax and efforts in Congress to reform and overhaul these programs, the previous FCC decided to expand the financial obligations of USF. The FCC in July of 2024 voted to expand the agency’s E-Rate program to include Wi-Fi hotspots for off-premise use, even though the clearest reading of Section 254 of the 1996 Telecommunications Act supports E-Rate connectivity in school classrooms and libraries.
In addition to these outstanding questions on the legality of the 2024 E-rate Order, and the potential for its expansion of USF obligations to exacerbate the program’s financial state, it is unclear that the Order would even achieve its purported goal of promoting educational Internet use. As one author of these comments noted in previous writing on this matter:
It would be bad enough for taxpayers to subsidize frivolous, non-educational Internet use, but leading experts, from social psychologist Johnathan Haidt to the U.S. Surgeon General, increasingly warn that social media is significantly harming children’s mental health. While the FCC touts that its order has “safeguards” to ensure that connectivity will be used for educational purposes, its Acceptable Use Policy directives amount to little more than the same check-the-box exercise that currently applies to E-Rate-funded connectivity at schools and libraries. The order also declined to impose any restrictions on how long a student can use a hotspot or credentialing mechanisms to ensure hotspots are used only by the intended user.
Under the 2000 Children’s Internet Protection Act, E-Rate funding is contingent on recipients having an “internet safety” policy that addresses obscene material like pornography and prevents unlawful activities like hacking. However, aside from rote certification exercises, there is little the FCC can do to police school networks under CIPA. And when it comes to social media, the FCC leaves it up to schools to decide. Will a critical mass of schools have the will or sophistication to curate the devices in a way that protects children from the harms of unsupervised Internet use?
An order that is likely unconstitutional, raises taxes, and potentially harms children’s health is a prime candidate for deletion.
Eligible Telecommunications Carrier Requirement
While much of USF was designed to promote telephony, the programs have long shifted their focus to broadband. The Eligible Telecommunications Carrier (ETC) requirements, however, still govern whether providers can participate. The byzantine process of becoming an ETC, and the attendant state patchwork of requirements, leads countless providers to eschew participating in the FCC’s USF programs. At a time when the broadband market features growing intermodal competition among telephone, fiber, cable, wireless, and satellite providers, ETC requirements prevent many Americans from benefiting from that competition.
As state utility commissions (PUCs) play a role in overseeing USF participation, ETC requirements provide regulatory hooks to PUCs to meddle in broadband regulation given the mixed-services nature of many Internet Service Provider (ISP) networks. While not all states seek to impose burdensome regulations on ISPs through their PUCs, the potential for adverse regulations may be enough to discourage participation in USF. Further, several states, in the absence of federal Title II regulation on broadband, now seek to price regulate the service and impose burdensome “net neutrality” rules at the state level. Removing the ETC requirement would mitigate a potential leverage point that activist PUCs and state governments have other ISPs.
While well intended on paper, ETC requirements are unnecessary for effective oversight, as the FCC has broad latitude to evaluate providers directly through program-specific requirements. For example, FCC adopted an Order in 2020 to establish a framework for ensuring that networks supported by the high-cost fund would meet certain standards for speed and latency. Given the deterrent effect of the ETC requirements in USF programs and the unnecessary costs imposed on businesses and consumers alike, the FCC should either eliminate or substantially forbear from these rules.
Permitting Reform
Taxpayers have committed enormous sums to expanding broadband access through various programs, including the Broadband, Equity, Access, and Deployment (BEAD) program, the American Rescue Plan Act, USF, ReConnect, and more. Without the right policies in place, those dollars won’t go as far as they should. As then-Commissioner Carr rightly pointed out in a 2023 congressional hearing on oversight of the FCC, “If we don’t streamline permitting and we are just spending this additional money, we are effectively jumping on the gas and the brakes at the same time.”
While comprehensive reform of the National Environmental Policy Act (NEPA) and National Historic Preservation Act (NHPA) is the purview of Congress, the FCC has had past success in limiting the application of those laws to communications infrastructure deployments that have little to no federal government involvement. We agree with commenters who suggest the Commission should revise its NEPA and NHPA rules to reduce the number of deployments subject to these reviews and ensure the process for those still subjected is predictable, timely, and cost-effective.
Media Regulation
Broadcast Ownership
On April 9, 2025, President Trump signed an executive order directing agency heads to eliminate regulations that stifle competition. For the FCC, there is no better place to start than with the Commission’s media ownership rules.
The regulations on broadcasters are arguably the most outdated and in need of deletion and reform. The Commission’s television and radio ownership limitations originated in the 1940s, when broadcasters dominated the communications landscape in the U.S. Despite rapid changes in the market in the intervening decades—such as the advent and proliferation of cable and satellite television, the Internet, social media, podcasts, and streaming—the FCC’s rules have hardly changed.
The FCC’s 39% national ownership cap limits the signals from a broadcasting company’s collective stations from reaching more than 39% of American households. It is important to note that only a fraction of those 39% are ever watching the collective broadcasts from a single company at the same time. The FCC also prohibits one company from owning more than one of the four top-rated stations in a market, and the agency also limits how many radio stations one company can own based on the population of a market.
Congress foresaw that marketplace changes and increased competition might render certain media ownership regulations obsolete, which is why lawmakers directed the agency to periodically review its media ownership rules and eliminate those that no longer made sense. Yet, as then-Commissioner Carr rightly noted, the FCC “has consistently ignored Congress’s deregulatory mandate under the statute” while continuing “to advance the fiction that broadcast radio and broadcast television stations exist in markets unto themselves.”
Indeed, the FCC under the Biden and Obama administrations sought to prevent broadcast consolidation at all costs by relying on narrow market definitions. By pretending that broadcasters competed only amongst themselves, the FCC justified anachronistic regulations that had not only outlived their usefulness, but were actively harming competition and consumers by preventing the investment needed to sustain local journalism.
A 2024 report estimated that digital advertising would account for 71% of all local advertising spending that year, and broadcasters’ share of local ad spend has plummeted since the early 2000s. As internet platforms were dominating the media and advertising ecosystems, the Biden and Obama administrations effectively ignored this dynamic and failed to heed Congress’s will to remove media regulations in light of new competition. This inaction has prevented broadcasters from achieving the scale necessary to compete more effectively with technology platforms that do not face any artificial limitations on ownership or audience reach.
The broadcast ownership regulations have already harmed consumers. One need look no further than the state of the newspaper industry to see how successful the FCC’s ban on the cross-ownership of newspapers and broadcasters was in promoting localism. While Google was monopolizing the digital ad market, per a recent court ruling, newspapers were starved of potential investment by broadcasters. Now, the country is riddled with news deserts. If the FCC doesn’t repeal its broadcast ownership rules, radio and television may face the same fate.
A recent Nielsen report found that broadcasters account for only 20% of monthly television viewing, compared with 24% for cable and 44% for streaming. Yet, broadcasting is the only medium where companies are prevented by rule from reaching 100% of households.
The results of these rules speak for themselves. Broadcasting is in decline, and station groups face enormous economic challenges. Scripps, Tegna, Nexstar, and Gray Television all recently announced layoffs at local news stations. The combined market cap of broadcast television is around $40 billion, which is dwarfed by any individual Big Tech company that station groups compete with, including Google ($2 trillion), Meta ($1.4 trillion), Amazon ($2 trillion), Apple ($3.2 trillion), or Microsoft ($2.9 trillion). With tech companies increasingly expanding into professional sports, broadcasters are struggling to retain the rights to broadcast these events, which represent a critical source of advertising revenue. Allowing them to consolidate would at least give them a fighting chance.
The FCC’s ownership limits perhaps long ago played a role in promoting competition and localism. But now, they do the opposite. To comply with the White House’s executive order, the FCC should delete the 39% national cap, the local duopoly rule, and all radio ownership limits. Eliminating those rules would enhance broadcasters ability to compete for the eyes and ears of American consumers, advertising dollars, and programming. Deleting these rules would also promote localism by allowing the economies of scale and investment necessary to sustain local newsrooms in a difficult economic climate for broadcasters.
Cable Access Requirements
As with broadcasting, there are regulations on cable television based on a bygone era. Cable used to account for 98% of pay TV in the U.S. Today, the market for pay TV is heavily fragmented with cable accounting for an estimated 49%, satellite for 21%, telcos for 6% and vMVPDs for 27%—not to mention that these providers all compete for consumers’ attention and advertising dollars with on-demand video providers, social media platforms, and other forms of media. If cable ever presented a bottleneck to the flow of information and the ability for content creators to be seen and distribute their content, that bottleneck is long gone. Therefore, the portion of the 1992 Cable Act establishing the leased access regime is likely no longer constitutional—it is compelled speech that would probably not survive even intermediate scrutiny based on today’s market conditions.
Despite the lack of demand for leased access, the rules still impose costs and burdens on cable providers. As then-Commissioner Carr noted in a statement when the Pai FCC streamlined the leased access rules:
[I]n order to accommodate this federal mandate, cable operators must maintain and update dedicated network infrastructure (such as encoders and decoders and headend equipment) and retain staff to address all aspects of leased access carriage (including specialists, technicians, and engineers). The significant costs associated with these resources must be expended whether or not the system actually carries any leased access channels or fields a single carriage request.
Cable operators must also spend time and money to respond to inquiries, calculate carriage rates, and negotiate agreements that may never result in leased access. Furthermore, the leased access regime inhibits their ability to offer consumers tailored programming tiers (or what we now call “skinny bundles”)—an option that many of their competitors in the video marketplace enjoy because they are not subject to the statutory leased access regime.
The Commission should eliminate as much of its leased access rules as possible. The network capacity that providers reserve for leased access would be better used for broadband or pay TV channels that consumers actually want to watch. And the funds and resources put into complying with the regime would be better spent elsewhere. Further, given the likely unconstitutionality of the rules themselves, the agency shouldn’t expend any significant resources enforcing or administering those provisions of the Cable Act.
The above is also true for the Commission’s public, educational, and governmental (PEG) channel obligations. The programmers that used to rely on PEG for distribution, like local governments, can produce and disseminate programming online with minimal equipment and the click of a button at negligible cost. As with much of the FCC’s media regulations, leased access and PEG rules have long outlived their usefulness and been rendered obsolete by marketplace changes. The benefits, if any, do not outweigh the costs to businesses nor the costs to the FCC.
Disaster Reporting
The FCC is considering a mandate that broadcasters, satellite providers, and broadband providers report their network status to the agency’s Network Outage Reporting System (NORS) and the Disaster Information Reporting System (DIRS). This would expand on the prior FCC’s decision to make certain NORS and DIRS requirements mandatory for voice providers that were previously voluntary.
While well-intended, overly burdensome NORS and DIRS requirements could add needless bureaucracy and paperwork to disaster reporting, making it harder for businesses to notify customers and governments of relevant and timely information. Further, there is not substantial evidence that the voluntary system was leading to widespread underreporting.
The network architecture of broadcast and satellite networks is also very different from terrestrial telephony. Satellites in particular have a risk structure and that often bear little resemblance to the threats posed to terrestrial network security—think solar flares versus animals chewing on fiber cables. The Commission should tread carefully in the absence of a systemic market failure to report outages. Therefore, the FCC should refrain from acting on its proposals and decline to extend these burdens to more providers and consider how to streamline or eliminate the burdens placed on voice providers by the prior administration.
Conclusion
While the regulations listed above are hardly exhaustive of all those we believe should be deleted, they represent a cross-section of the burdens and impacts of the agency’s rules. We commend the FCC for undertaking this review of its regulations and urge the Commission to regularly and continually undergo comprehensive evaluation of everything in Title 47 of the Code of Federal Regulations. The FCC should continue to ask whether each rule continues to serve a legitimate purpose, whether its costs outweigh its benefits, and whether it is the best or most optimal way of achieving its intended purpose. Reducing waste in the public and private sectors is a worthy end in itself, and freeing up capital for better uses could benefit consumers and the economy as well.
Sincerely,
Evan Swarztrauber
Senior Fellow
Foundation for American Innovation
Luke Hogg
Director of Technology Policy
Foundation for American Innovation
