Issue 2

Articles

Do State Reviews of Communications Mergers Serve the Public Interest?

By Jeffrey A. Eisenach * and Robert Kulick*

This study presents an empirical analysis of the effects of public utility commission (“PUC”) oversight of mergers involving communications carriers. The analysis is based on a data set covering major communications sector transactions from January 1, 2010 through June 30, 2017. Specifically, we gathered and analyzed data on all 40 major transactions approved by the Federal Communications Commission (“FCC”) during this period to: (a) determine the extent of PUC involvement in these transactions; and (b) for the transactions in which PUCs were actively engaged, to assess both the procedural and substantive effects of their interventions.

Our analysis of the frequency and characteristics of PUC interventions in communications mergers provides new evidence that states impose significant and unnecessary costs in the form of procedural burdens and delays and that the concessions they extract tend to serve narrow interests rather than the overall public interest. Because mergers are a key mechanism for reallocating resources to their highest valued economic uses, the costs and delays imposed by PUCs ultimately harm overall consumer welfare and economic performance. Accordingly, policymakers at both the federal and state level should consider reforms that would significantly constrain the ability of PUCs to intervene in communications mergers. The remainder of this paper is organized as follows. Section II discusses the law and economics of merger enforcement, focusing on both the substantive and procedural factors that bear on the appropriate role of state regulatory bodies in the review process. Section III presents our empirical findings regarding the extent and nature of PUC interventions in communications mergers. Section IV presents a brief summary of our findings.

Broadband Internet Access Service Is a Telecommunications Service

By Scott Jordan

In December 2017, in the Restoring Internet Freedom Order, the FCC reclassified broadband Internet access service from a telecommunications service to an information service. The justification for the reclassification rests primarily on a reinterpretation of relevant statute. The purpose of this paper is to examine and evaluate this interpretation and reclassification in the context of the relevant precedent.

Ringless Voicemails: How an Emerging Unregulated Technology May Hinder the Intent of Telephone Consumer Protection Act of 1991

By Irela Aleman

As the restrictions for the use of ringless voicemails for telemarketing purposes have not been delimited by either the FCC or the courts, this Note argues that ringless voicemails should be TCPA compliant, as telemarketers do “initiate a call” through an automatic telephone dialing system to deliver voicemails. Further, restricting ringless voicemails advances the TCPA’s consumer protection objectives of safeguarding the privacy of consumers, whether at home or at any other place where a consumer has a reasonable expectation of privacy. If ringless voicemails are not subject to the requirements and prohibitions prescribed under the TCPA, then the Act itself loses its potency, as telemarketers are able to reach consumers without their consent and without restriction.

Part II of this Note provides an overview of the TCPA and describes the motives and intent behind its enactment. It also defines the elements found in the “initiating a call” requirement and expounds on how the concept evolved from calling a consumer at her residence, to calling the consumer on her wireless phone, and finally to sending robo telemarketing over-the-Internet text messages to consumers through automatic dialing systems. Furthermore, it defines what an automatic telephone dialing system is for the purposes of the TCPA. Finally, it describes different methods used to deliver ringless voicemails. Part III argues that since the TCPA was created more than twenty years ago to protect consumers from intrusive technological methods created by telemarketers to reach them, the next logical step is for the FCC to broaden its interpretation of the TCPA, or in the alternative, for Congress to modernize the TCPA to allow for protection against recently-created telemarketing methods. Part IV concludes by stating that if ringless voicemails are exempt from TCPA requirements and prohibitions, then the TCPA itself loses its potency, as telemarketers would have an open door to flood consumers’ voicemail boxes with telemarketing messages without their consent and in violation of their privacy.

NETFLIX KILLED THE CABLE TV STAR: Cable TV is Definitionally Disadvantaged for Use of Artificial Intelligence 

By Casey Patchunka

This Note will address the innovation of use of AI in the entertainment industry to fuel the use of consumer data to customize advertising, content, and timing of viewership. Section II discusses the new reality facing the cable TV industry as well as how and why AI and PII are essential to the industry remaining competitive. Section II outlines the ways in which the cable TV industry could utilize AI and PII to provide better services and content to consumers. Section III explains how the use of AI plays out differently for cable TV as compared to other entertainment sources because the use of PII is treated differently in definition and in disclosure requirements. Section III.A establishes why this dichotomy is important.

Section III.B proposes four solutions to this problem, which would ensure that the cable TV industry would not be at a disadvantage when it comes to AI advancements. Some options better protect consumer privacy and others better allow for competition and thus lower prices and better innovation in the entertainment industry. Ultimately, to ensure a competitive entertainment market in terms of cost and content, the cable TV industry and those regulated under the VPPA must be regulated in the same manner. Without a level playing field, there is a risk that cable TV will be unable to innovate and compete with other entertainment options, such as streaming and other online services, ultimately resulting in reduced competition, lower quality content, and higher prices for consumers.

A Medium-Specific First Amendment Analysis on Compelled Campaign Finance Disclosure on the Internet

By Millicent Usoro

This Note argues that the unique nature of the Internet justifies the government’s regulation of online campaign finance disclosure because of its substantial role in public discourse. Furthermore, closing regulatory loopholes to “ensure political ads sold online are covered by the same rules as TV or radio stations” should not automatically trigger constitutional suspicion. A medium-specific First Amendment analysis of the Internet is appropriate because the Supreme Court has historically used such analyses for other mediums of communication and therefore, this is generally consistent with First Amendment jurisprudence. Furthermore, because the Supreme Court has centered its analysis on the physical characteristics and technology of the medium at hand, a medium-specific analysis illuminates the ways in which the Court has resolved and distinguished the constitutional issues that stem from government regulation.

Section II will present background information, including an overview of campaign finance law, Supreme Court decisions upholding the constitutionality of disclosure requirements in campaign finance laws as they relate to the First Amendment, and sponsorship identification requirements imposed by the FCC for political ads on radio, television, and satellite broadcasting. Section III will compare the Supreme Court’s treatment of broadcasting with other mediums of communication. Section IV will apply the rationales from previous medium-specific analyses by the Supreme Court and determine if they apply to the Internet. Section IV will also consider additional constitutional issues that are applicable in campaign finance law, such as the government’s compelling interests in national security under First Amendment strict scrutiny.