The Trump administration has reworked the $42 billion Broadband Equity, Access, and Deployment program with an eye toward greater efficiency and less top-down regulation. As a result, states are projected to come in roughly $21 billion under budget on broadband deployment. The National Telecommunications and Information Administration is actively soliciting ideas for how those funds should be used.

If the administration wants an easy political win and a solution to a real problem, the funds should be used to radically modernize our air traffic control systems.

Policymakers should seize the moment and invest in something the country desperately needs — something that would deliver real, tangible benefits to the flying public and the broader economy.

The FAA’s own administrator, Bryan Bedford, has been blunt: Roughly 80% of FAA infrastructure is considered obsolete or unsustainable. Controllers are still using paper flight strips and radar systems that date to the Vietnam War era.

The $5 billion Congress appropriates annually for ATC operations sounds substantial until you learn that 85% to 90% of it goes to sustaining legacy systems — patching roofs, repairing elevators, and keeping aging equipment limping along.

Congress did take a meaningful step last year, allocating $12.5 billion in the reconciliation bill toward ATC modernization. Fiber optics are beginning to replace copper wire. Radar upgrades are being compressed from a 20-year timeline into a few years.

The early results are encouraging. But by official FAA estimates, an additional $19 billion is needed to fully complete the job — to build a genuinely modern, integrated national airspace system rather than an expensive patch on a broken one.

This is where BEAD’s leftover $21 billion could make a real impact.

Senator Ted Cruz (R-Texas), who chairs the Senate Commerce Committee and has long championed both infrastructure investment and Texas’ status as one of the nation’s busiest aviation hubs, is well positioned to recognize the strategic alignment here.

Texas is home to two of the nation’s largest airports — Dallas Fort Worth and Houston Bush Intercontinental — and its economy runs on the efficient movement of people and commerce. ATC modernization would be a huge benefit for Texans.

The legal question of whether this use fits within the BEAD statute’s framework is one that the NTIA will need to address carefully. The statute is written broadly enough to accommodate creative interpretation, and the administration has already demonstrated it is willing to read BEAD’s parameters with fresh eyes.

A next-generation ATC system — replacing copper with fiber, analog with digital, fragmented local computers with integrated national architecture — looks a great deal like the kind of advanced communications infrastructure BEAD was designed to fund.

Ironically, it’s easier to make the case that the federal government should be ensuring airline safety than subsidizing broadband deployment.

The BEAD funding was part of the massive infrastructure legislation, and our airline infrastructure is in dire need of investment. And unlike many government spending programs, ATC modernization has a defined scope and measurable milestones. This is not a slush fund — it’s a known project with a known price tag.

The alternative uses being floated for BEAD’s unused funds range from the reasonable to the fanciful: broadband adoption programs, rural mobile coverage, returning funds to the Treasury, and various state-level wish lists.

Some of those ideas have merit. But none of them represent the kind of once-in-a-generation infrastructure opportunity that a modern ATC system would deliver — one that improves safety for millions of air travelers daily, reduces delays that cost the economy billions annually, and positions the United States to lead in the airspace of the future.

The Trump administration’s 2027 budget request is going to include millions of dollars in additional ATC funding, but the BEAD funds are already there, waiting to be invested. That’s the beauty of budget reform — eliminating waste and finding savings can free up funds for other critical public needs.

This week courts have given us two different and contradictory verdicts about intermediary liability.

In a case going all the way back to 2018, Cox Communications, the cable and broadband company, was accused of failing to live up to its legal obligation to limit music piracy.

To simplify, Cox had an obligation to cancel the accounts of users who had been warned multiple times about engaging in music piracy, but Cox did not. Cox of course had a financial interest in not cancelling users accounts.

So Cox was sued by the major music labels, and the labels won in lower courts. But this week the Supreme Court continued its skepticism of intermediary liability by finding that Cox was not liable, because Cox did not “actively encourage infringement.”

According to the New York Times, “in its opinion released on Wednesday, the court said a company was not liable for “merely providing a service to the general public with knowledge that it will be used by some to infringe copyrights.”

Writing for the court, Justice Clarence Thomas said a provider like Cox was liable “only if it intended that the provided service be used for infringement” and if it, for instance, “actively encourages infringement.”

So, an intermediary has to intend for something to happen, and actively encourage that thing to happen, in order to incur liability.

The Court’s unanimous 9-0 decision is of course definitive, even if it seems to fly in the face of some provisions of the Digital Millenium Copyright Act (DMCA).

At IPI, we’ve never been comfortable with intermediary liability, even though we’re also uncomfortable with copyright piracy.

But that leads us to two other cases this week, where in Los Angeles on Wednesday, a jury decided in favor of a plaintiff who had claimed that Meta and YouTube hooked her with addictive features — a verdict validating a novel legal strategy holding the companies accountable for personal injury. And a day earlier in New Mexico, a jury found Meta liable for failing to safeguard users of its apps from child predators.

So, let’s get this straight: Intermediaries are not liable for their users’ illegal activity unless they intend it and actively encourage it, but they are liable for harm to their users, including self-harm, even if they don’t intend it and don’t actively encourage it.

Now, of course the details of the cases are different, and details matter.

Still, the Supreme Court is not a fan of intermediary liability, and that’s a good thing. Which means if Meta and Google appeal all the way to the Supreme Court, there is a reasonable chance that they will succeed.

The tragedy unfolding this week at New York’s LaGuardia Airport hints at human error. We shouldn’t jump to conclusions based on early reports, but in this case we have audio of the air traffic controller saying, “I messed up.”

Nothing but complete sympathy here for everyone involved, including the air traffic controller. Air traffic control is recognized as one of the most difficult, stressful and pressure-filled jobs on offer. And by all accounts it’s been decades since our corps of air traffic controllers was fully staffed.

But we must acknowledge the reality of human error. In many tragedies, human error is the No. 1 cause:

• Traffic accidents: 90 to 95% are attributed to human error.
• Aviation accidents: 70 to 80% are attributed to human error.
• Maritime accidents: 75 to 96% are attributed to human error.
• Medical errors: Human error is a leading cause of death in medicine, including misdiagnosis, medication errors, and surgical mistakes.
• Nuclear power and major industrial accidents: Both the Chernobyl disaster and the Three Mile Island incident were attributed to human error.
• General industrial/workplace accidents: Most are attributed to human error.

Human error is also a major factor in cybersecurity breaches, IT system failures, construction accidents, structural failures, power grid failures, and even in other areas such as business failure, including risk management errors and so-called “fat finger” trading errors.

Human error is neither a character flaw nor a lack of intelligence or integrity. It’s just a known element of human nature. That’s why in tragic cases like a child left in a backseat by a distracted parent, the proper reaction is compassion, not judgment. We all make mistakes.

Though human error may be inevitable, we are creating tools to help us compensate.

Human error is a perfect place to implement tools like AI to protect us from our own mistakes and compensate for our frailties. Implementing AI could substantially contribute to our quality of life by reducing preventable tragedies.

It’s likely that implementation of AI could eliminate most accidents due to human error. Chips and software don’t get tired, don’t get distracted, and make decisions in millionths of a second that a human might take 5 or 10 seconds to make. Studies suggest that humans can keep track of 3 to 5 independent variables at the same time, while AI can manage orders of magnitude more.

Humans are attention-constrained, while AI is computation-constrained. And while we can’t do anything to improve the former, we’re reducing the computational constraints on AI every day.

After the air traffic controller said, “I messed up,” some kind soul immediately responded with “No, man, you did the best you could.” And that’s entirely possible. It’s likely advanced AI could have prevented the accident, both pilots could have returned to their families, and an air traffic controller could be able to sleep tonight.

Every major innovation seems to inevitably generate an infrastructure fight—generating public and political opposition right up until we can’t imagine life without it. Railroads divided farms and ranches. Telegraph lines “uglified” streetscapes. Highways carved through neighborhoods. Pipelines, cell towers, wind farms, transmission lines—each sparked a familiar chorus: too big, too ugly, too loud, too much. And yet, in the end, the public benefited tremendously because economic growth requires a growing infrastructure.

Today’s favorite target for such opprobrium is the data center.

Just a couple of years ago, policymakers competed to attract data centers. They were symbols of growth, high-value investment, better tax bases, and the digital backbone of modern commerce. Now many of those same policymakers speak as if data centers are some kind of social evil—because they consume power and water, and because the AI boom is making that demand visible. You can see the shift in the sudden wave of proposed moratoriums and “pause” bills rationalized by energy, water, and ratepayer concerns.

Let’s be clear about what a data center is: critical infrastructure. It is the physical home of the digital services we rely on for banking, ecommerce, logistics, emergency communications, healthcare records, education, and—yes—national security. If policymakers are serious about economic competitiveness, they should treat data centers the way they treat ports, rail spurs, and power plants: as necessary facilities that must be sited responsibly, not demonized reflexively.

Critics raise legitimate issues—grid capacity, water use, noise, backup generators, local land-use impacts. But the policy response should be responsible and data-driven, not reactionary.

Start with electricity. Data centers don’t “steal” power; they buy it—often at industrial rates with long-term contracts—and their presence as a predictable buyer can justify new generation and transmission investments that benefit everyone. A rapidly growing load is not a moral failing; it’s a planning challenge. The right answer is to build abundant energy—more natural gas, more nuclear, more renewables where they make sense, more transmission—so that families aren’t pitted against servers in a zero-sum political drama. Lawmakers across the country are already debating how to protect ratepayers while accommodating growth, which tells you the debate is about policy design, not existential threat.

On water: in most cases, data centers use closed-loop systems for cooling, so it’s like filling a swimming pool one time. Over time, data centers consume less water than a car wash. Policymakers can require transparency, recycling, and closed-loop systems rather than discouraging new investment. Indeed, multiple states are moving toward water-use reporting requirements—exactly the kind of targeted, pro-information approach that beats panic.

The broader point is this: America’s economy won’t continue to innovate and remain prosperous by making infrastructure buildout difficult. We stay prosperous by insisting on sensible rules, clear property rights, and predictable permitting—and by letting private capital build the backbone of the next economy, instead of letting political panic veto it.

Highlights

• Analysis of the streaming marketplace by numerous criteria shows that Netflix is already the dominant competitor in terms of paid subscribers (more than double Disney+), attention share (about double its nearest competitor), and profitability (only long-term profitable company).
  
  
• In comparing the two most likely scenarios, a Warner Bros. merger with already dominant Netflix would likely run afoul of standard antitrust considerations, while a combination with Paramount (or another smaller streaming service) could allow for the creation of a more substantial competitor for Netflix.
  
  
• A Netflix-Warner Bros. merger would probably harm the already struggling theatrical exhibition market, resulting in job losses, reduced revenue for restaurants and shops, among other hardships.
  
  
• Netflix’s history of price increases indicates it is already leveraging its market dominance, and it is reasonable to conclude that, following its acquisition of Warner Bros., it could set rates across the entire sector. 

Introduction

Even though the video streaming marketplace is relatively new, it is widely understood that some market consolidation is inevitable and necessary.i  

In the current market, consumers are frustrated and Wall Street is impatient.ii There are so many streaming platforms offering an abundance of content, some consumers end up using spreadsheets just to keep track of which service their favorite shows are on, or have begun using apps like JustWatch to keep track of which shows are available on which services. 

Consumers aren’t frustrated because the market has failed—the market has delivered spectacularly. Content owners promised to make their catalogs easily available to consumers if they were permitted to protect their valuable copyright interests, and broadband providers promised abundant bandwidth with low latency if they were permitted to profit from their enormous investment in infrastructure. And both delivered. Thus far, policymakers have gotten the big decisions largely correct, and the result is incredible choice and availability for consumers. 

The result is a “crisis of abundance” for consumers. This isn’t a terrible problem, as problems go, but there are other players in the market besides consumers. Most streamers aren’t profitable,iii and that’s a problem for Wall Street in the short term and for the companies themselves in the long term. It’s clear that some consolidation is necessary. Streaming disrupted the formerly stable cable model, and it is normal for a period of consolidation to follow a period of disruption. 

Already there has been a spate of mergers—including Disney+, Hulu and ESPN+, Amazon’s acquisition of MGM Studios, and Warner Bros.’ merger with Discovery Inc. 

But consolidation in the streaming industry clearly isn’t finished yet.

Warner Bros. on the Block (again) 

Last October, Warner Bros. Discovery, itself the product of a merger, started exploring merger and sale options, setting the stage for a seismic shift in the media and entertainment landscape. While many potential suitors seemed interested, Paramount Skydance made an offer for the entire company. In reaction, Netflix made an offer for only certain Warner Bros. properties. Weeks later, Warner Bros. accepted Netflix’s offer. 

The announcement immediately drew scrutiny from policymakers in Washington, as Netflix is already the largest subscription video on demand (SVOD) provider in the world. Warner Bros.’ vast content library, sizeable production capabilities, and the third-largest streaming platform (HBO Max), combined with Netflix’s scale, could easily preclude competition in this quickly evolving sector. 

But Paramount Skydance hasn’t thrown in the towel and is attempting to persuade Warner Bros. Discovery shareholders that theirs is the superior offer. It would not be unusual for both suitors to continue to modify and enhance their bids as the process unfolds. 

Meanwhile, on January 7, the U.S. House of Representatives subcommittee that oversees antitrust issues held a hearing on the impacts of consolidation in the entertainment sector. Additionally, Senator Mike Lee, Chairman of the Senate Subcommittee on Antitrust, is expected to hold a hearing on Tuesday, February 3, and Netflix CEO Ted Sarandos has reportedly agreed to testify. With Paramount Skydance still vying for contention, a Netflix-Warner Bros. merger will undoubtedly face substantial scrutiny by policymakers. 

This paper analyzes key factors that policymakers and antitrust regulators should consider as they review the potential sale and the impact it would have on competition, consumers, innovation, and the economy.  

Free Markets and Antitrust

Through competition, innovation, property rights, and rule of law, free markets drive optimal consumer outcomes. Markets are not perfect, but they generally produce value, choice, and novelty for consumers—certainly better than do top-down central control systems. 

As a rule of thumb, light-touch regulatory policy allows markets to push forward deals that make sense and best meet consumer demand without distortion caused by government intervention. 

Scale is not necessarily harmful to consumers—in fact, depending on the industry and market, scale is sometimes necessary to meet consumer demand. There can be literally thousands of doughnut shops, dry cleaners or restaurants in a city, because such do not require enormous infrastructure investment, but no one imagines that there could be thousands of electric utilities or internet providers in a city. 

But scale can be harmful to consumers if scale is leveraged to reduce competition, consumer choice, increase prices and slow innovation. 

Antitrust review, oversight and enforcement is part of our legal code, and is sometimes necessary. From a free market perspective, antitrust law is intended to ensure consumer welfare, which includes preventing dominant competitors from taking advantage of their market dominance to harm consumers through limiting choice, competition, and by extracting higher prices. 

Antitrust Considerations 

There are two important considerations in a market analysis from a free market standpoint. 

One is philosophical: The “consumer welfare standard,” formally described by Robert Bork in his book “The Antitrust Paradox.” Bork argued that government shouldn’t attempt to manage competition based on government’s idea of what a market should look like but should rather make judgments based on how a market actually behaves. 

The second is U.S. law, regulation and precedent. In a 1963 Supreme Court decision, United States v. Philadelphia National Bank, the Supreme Court determined that a 30 percent market share was a significant threshold for antitrust considerations. That decision established the "structural presumption" that certain mergers—particularly those involving significant market concentration—can be presumed to substantially lessen competition, shifting the burden to the merging parties to prove otherwise. 

Policymakers need to take both legal precedent and the consumer welfare standard into account when evaluating streaming consolidation and the mergers under discussion. 

And that’s what current Department of Justice guidance demands. The 2010 Horizontal Merger Guidelines (HMG), jointly published by the Department of Justice and the Federal Trade Commission (FTC), included sections alluding to the “consumer welfare standard.” 

Section 1 of the HGM reads, “The unifying theme of these Guidelines is that mergers should not be permitted to create, enhance or entrench market power…. A merger enhances market power if it is likely to encourage one or more firms to raise prices, reduce output, diminish innovation, or otherwise harm customers….” Furthermore, Section 10 states “the Agencies will not simply compare the magnitude of cognizable efficiencies with the magnitude of the likely harm to competition absent the efficiencies. The greater the potential for adverse competitive effect of a merger, the greater must be the cognizable efficiencies, and the more they must be passed through to customers….”

The HGM leaves little doubt that the antitrust enforcement agencies are including both the consumer welfare standard and established precedent as the driving factors for merger evaluation and other antitrust litigation. 

Trump Administration Antitrust Policy

As in many other policy areas, the Trump administration has not felt bound to prior Republican approaches. President Trump and his agency appointees are far more skeptical of corporate market power, and much more willing to use government power to actualize their preferences, than have been previous Republican administrations.

While the Trump administration revoked Biden’s executive order radically expanding U.S. antitrust enforcement, it left in place Biden’s 2023 merger guidelines, and new Hart-Scott-Rodino Act rules were finalized by the Trump administration on February 10, 2025.iv The net result is that the Trump administration does not begin with a “hands off” approach to antitrust review. This makes it more likely that any merger, especially one where there seem to be genuine competition concerns, will be subject to more scrutiny. 

Analysis of the Streaming Marketplace 

The streaming marketplace saw a surge of new entrants in the late 2010s as subscription video disrupted traditional cable model. The result has been a “disaster of abundance,”v in which users increasingly reported “subscription fatigue.” In 2024 nearly a quartervi of U.S. streaming users reported canceling three or more subscriptions over the prior two years, and almost one thirdvii of Americans canceled at least one service last year. 

While much of this industry restructuring was, and is probably still, necessary—many services remain unprofitable, and for them, a merger may be the only option to continue operating. Thus, competition and antitrust concerns will likely follow the streaming market for the foreseeable future. 

The Current Streaming Marketplace 

For purposes of this paper, platforms that consist of almost entirely user-generated content, such as YouTube, are excluded from the market definition. We consider YouTube to be a video-sharing platform, as opposed to an on-demand video streaming service. While YouTube garners a significant share of consumer attention, user-generated content is dissimilar to studio and network generated content as provided by Netflix, Amazon Prime, Disney, Paramount, Peacock, Warner Bros. Discovery, Tubi and Roku. Consumers often go to YouTube, but they don’t go to YouTube for the same reason they go to other streaming services. 

Netflix maintains otherwise; insisting that YouTube should be included in the market definition, because it would appear to lessen Netflix’s market dominance. But this assertion does not stand up to scrutiny when considering how consumers use these services. User generated content can be surprisingly creative and entertaining, but it doesn’t substitute for studio-created content. 

We define the streaming video marketplace as on‑demand catalog services under the editorial responsibility of the provider (i.e., services offering programs from a catalog selected by the provider). User-upload video-sharing platforms such as YouTube are excluded because they operate primarily as video-sharing platforms without editorial responsibility for user-generated uploads, and their content offering and competitive constraints differ materially from curated on‑demand program catalogs. 

Importantly, both EU regulatorsviii and the UK regulator Ofcomix make this same distinction. 

We will examine the streaming marketplace by several different criteria.

Note: Shortly before publication, on January 21, 2025, Netflix reported its full-year earnings for the 2025 fiscal year, reporting $45.2 billion in revenue for the full year (up 16 percent year-over-year), and with ad revenue rising over 2.5x to over $1.5 billion. Viewing hours were up 2 percent year-over-year, and total subscribers increased to 325 million.x

Because comparing Netflix’s 4Q 2025 numbers with its competitors’ 2024 numbers would be invalid, we note the new numbers here prior to our comparisons. What is clear is that Netflix continues to increase its market dominance, while other competitors continue to struggle. 

Subscribers 

For the most part, streaming services report subscriber numbers as a part of their earnings reports, though not all services do, and not all services break out video streaming from other offerings.

• Netflix: Finished 2024 with 302 million subscribers (and reported “Global Streaming Paid Memberships” of 301.63 million for Q4 2024).xi
• Amazon Prime: More than 200 million members; Amazon doesn’t report Prime Video subscribers. Amazon uses its video services as a feature to acquire and retain users in its Prime memberships. A study last yearxii found 90 percent of Prime users say free shipping is the primary incentive for maintaining their subscription. It is therefore not possible to determine the number of consumers who simply choose to subscribe to Amazon Prime.
• Disney: End of fiscal Q4 2025: 132 million Disney+ subscribers and 196 million Disney+ & Hulu subscriptions.xiii
• Warner Bros. Discovery (HBO Max + Discovery+): 128.0 million global streaming subscribers at end of Q3 2025.xiv
• Paramount (Paramount+): 79.1 million Paramount+ subscribers at Q3 2025 end.xv
• Comcast (Peacock): 41 million paid subscribers as of Sept. 30, 2025.xvi
• Apple TV+: While Apple does not release numbers, Reuters cites 40.4 million subscribers per analyst estimates.xvii

Conclusion: Netflix is far and away the dominant competitor in terms of paid subscribers, dwarfing all other standalone video streaming providers. Netflix has more than double the number of subscribers as content powerhouse Disney+.

Attention Share

Streaming services don’t report viewing numbers in a standardized or comparable manner, but market analysts have employed several methods to attempt to quantify streaming data.

Nielsen’s “The Gauge” is one of the most cited benchmarks for streaming services because it’s based on TV viewing minutes in the U.S. In November 2025, streaming was 46.7 percent of total TV usage. The Gauge reportsxviii that, for November 2025, streaming platforms by attention share were:

• Netflix (8.3 percent) (30.41 percent weighted by market definition)
• Disney (4.7 percent) (17.22 percent weighted by market definition)
• Amazon Prime (3.8 percent) (13.92 percent weighted by market definition)
• Roku (2.9 percent) (10.62 percent weighted by market definition)
• Paramount (2.3 percent) (8.42 percent weighted by market definition)
• Tubi (2.1 percent) (7.69 percent weighted by market definition)
• Peacock (1.9 percent) (6.96 percent weighted by market definition)
• Warner Bros. Discovery (1.3 percent) (4.76 percent weighted by market definition)

Conclusion: Netflix is the clearly dominant competitor in terms of attention share, about double that of its nearest competitors. 

Profitability

Not all streaming companies report their profits in a way that allows direct comparison. This data is from publicly available filings from corporate earnings reports. 

• Netflix: In 2025, revenue grew 16 percent, operating margin expanded to 27 percent, and operating income exceeded $10 billion for the first time.xix
• Amazon Prime: Does not report standalone streaming profit & loss.
• Disney: Q4 fiscal 2025 direct-to-consumer operating income was $352 million.xx
• Warner Bros. Discovery: Q3 2025 streaming adjusted EBITDA was $345 million.xxi
• Paramount: Q3 2025 materials show Paramount+ management messaging that profitability is a top priority with expectations for direct-to-consumer profitability to be reached in 2025.xxii
• Peacock: Comcast reported Peacock EBITDA losses of $217 million in Q3 2025.xxiii 

Conclusion: Netflix is in the strongest profit position which allows it to self-fund content projects and command a premium for its subscription service. Most other streamers remain unprofitable or are subsidizing their video streaming services from other revenue sources. 

Apple-ish to Apple-ish Snapshot 

This analysis allows us to construct a “power ranking” of streaming market strength. 

Tier 1: Platform Leaders

• Netflix
• Amazon Prime (estimated) 

Tier 2: Strong and Improving

• Disney
• Warner Bros. Discovery 

Tier 3: Mid-scale Challengers

• Paramount
• Peacock

Tier 4: Small but Strategic

• Apple TV+ (estimated) 

Tier 5: Marginal with Ad Strength

• Roku Channel
• Tubi

Two Merger Scenarios

At the time of this writing, both Netflix and Paramount Skydance are vying to acquire Warner Bros. Discovery. Let’s briefly compare the two possible outcomes. 

Scenario One: Netflix Acquires Warner Bros. Discovery 

By our analysis, this would involve a dominant Tier 1 competitor combining with a strong and improving Tier 2 competitor. In formula terms, 1+2. 

Netflix, with 302 million subscribers, would combine with 138 million subscribers, likely pushing its subscriber base to over 400 million, more than twice as many as the next closest competitor, Amazon Prime Video, which has about 200 million subscribers. 

And that comparison is skewed by the two streaming services’ different revenue models. Whereas Netflix operates on direct revenue, Amazon uses its video services as a feature to acquire and retain users in its Prime memberships. In other words, many Amazon Prime “subscribers” pay for Prime not for the video component, but for other “perks,” especially free shipping. A study last yearxxiv found 90 percent of Prime users say free shipping is the primary incentive for maintaining their subscription.  

The next closest sole content platform to Netflix is Disney+, which has slightly more than 130 million users. A merger with Warner Bros. would position Netflix with more than three times as many subscribers as Disney+. 

According to a recent analysisxxv by JustWatch, Netflix’s acquisition of Warner Bros. would push its share of the U.S. SVOD market to 33 percent—12 points higher than Prime Video, the next closest platform in terms of size. JustWatch also estimates that this combination would account for 20 percent of streaming attention share. 

By all available evidence, Netflix’s acquisition of Warner Bros. would run afoul of the United States v. Philadelphia National Bank market share threshold. Netflix is already the leading streaming service, both by subscriber volumexxvi and viewership.xxvii It’s also the obvious leader by market cap, with an equity value of almost $40 billion morexxviii than all the other major entertainment producers and theatrical exhibitors combined. 

By this market analysis, Netflix already is above the 30 percent market share threshold, even before any further acquisitions. 

Scenario Two: Paramount Skydance Acquires Warner Bros. Discovery 

By our analysis, this would involve a Tier 3 mid-scale competitor combining with a strong and improving Tier 2 competitor. In formula terms, 3+2. 

Paramount Skydance, with 79.1 million subscribers, would combine with 138 million subscribers, likely resulting in a net subscribership of about 200 million. This would still be significantly smaller than Netflix’s current subscribership. 

A smaller streaming service’s acquisition of Warner Bros. could create greater competition, establishing a company with the content library and user base to be closer to Netflix. 

A merger between Warner Bros. and Paramount, or another smaller streaming service, may not unseat Netflix from atop the “streaming wars,” but it could establish the resulting company as a close contender. Such an outcome certainly would not harm consumers, since it would force Netflix (and other providers) to continue to innovate and offer competitive prices.

Other Considerations 

The Theatrical Market

Entertainment is a highly integrated industry. Theaters, restaurants, retail and a whole host of businesses largely rely on upstream production decisions. Pandemic lockdowns shifted consumer behaviors—theatrical revenues dropped from $42.3 billion in 2019xxix to $12 billion in 2020—creating a structural shift that many vendors are still struggling to climb out from under. Box offices revenues in 2025 remained below pre-pandemic levels. 

Since 2023, Netflix films have averaged a theatrical run of only 11 to 17 days,xxx compared to major studio features’ average of 46 days in 2024 and 58 days in 2023. And Netflix shows no sign of changing its model. CEO Ted Sarandos has called the theater experience “outdated,”xxxi and the company has said it intends to standardize the 17-day theatrical release window if its acquisition of Warner Bros. is approved. 

In fact, Netflix only bothers with short theatrical releases for films it believes are Oscar-worthy, since the Oscars require theatrical release. Most Netflix products never make it to a projection booth. 

Michael O’Leary, CEO of Cinema United, has saidxxxii that Netflix’s acquisition of Warner Bros. “poses an unprecedented threat to the global exhibition business.” Acclaimed director James Cameron, likewise, has said the merger is a “disaster”xxxiii for the wider industry and called Netflix’s promise to continue to release films in theaters “sucker bait.” 

A Netflix-Warner Bros. merger would put even greater pressure on theaters—a scenario that would likely result in job losses, reduced traffic through restaurants and shops, property vacancy, and diminished community vibrancy—especially in rural and small towns, where theaters are often still social anchors.  

Last year the movie theater industry employed over 127,000 workers. A 2021 reportxxxiv found that theaters supported over $36 billion in indirect and induced economic activity and more than $9 billion in movie-night spending. Regulators should consider those jobs and broader economic impacts as they review Netflix’s proposed purchase of one of Hollywood’s top studios.  

Netflix’s Pricing History 

Some proponents may argue that despite Netflix’s disproportionate market share, a merger could allow it to reduce prices and produce better services. But Netflix’s pricing behavior hardly merits such confidence. 

Despite being one of few profitable streaming platforms, Netflix has continually raised its prices on consumers. Since 2014, Netflix has increased the cost of its “standard plan” by more than 225 percentxxxv and its “premium plan” by over 200 percent, setting the pacexxxvi for an industry now plagued by rapidly rising prices. 

Netflix’s price increases are notable for two reasons. 

First, Netflix is one of the few profitable streaming platforms. In the third quarter of 2025, it posted a $2.5 billion net profit, more than twice the next three profitable streaming services combined. The company has been consistently profitable since 2010. By contrast, most streaming platforms have struggled (and many continue to struggle) to turn a profit, due in large part to start-up costs. 

Disney+, for example, only first reported positive earnings in the third quarter of 2024, and the platform reportedly lost three timesxxxvii more money in its first five years than Disneyland Paris did in three decades. Peacock incurred $101 million and $217 million in losses in Q2 and Q3 of last year, respectively—which were improvements from a year earlier. 

And second, as the largest SVOD provider, Netflix is the industry trend setter. When it raises its prices, it creates a benchmark for other services, driving what commentators have dubbed “streamflation.” As one industry publication noted:xxxviii 

“In recent years, as the streaming TV and movie business has gotten more competitive and companies around Hollywood have thrown billions into building their own platforms and libraries in order to compete with Netflix, participating in the streaming era has gotten steadily more expensive.” 

Netflix’s price increases, which have occurred on average every 18 months, are indicative of a market-dominant player leveraging its market power. Due to its sheer superiority in viewership and content, its actions suggest it can hike rates knowing that users will pay up, because there are few other services that offer the same breadth of material. 

U.S. Representative Darrell Issa (R-CA) raised this point during the January 7 hearing, when he asked a witness: 

“Aren’t we again in situation where if Netflix post-acquisition controls a massive library to the exclusion of others, we have the same situation, where everyone must have access to Netflix in order to have access to not just new production, but a vast library that, in fact, by definition every child grows up watching?” 

“I think it’s a relevant concern,” the witness stated. 

Netflix’s record profits are not a disqualifier, per se, but its continual rate increases indicate that it is already leveraging its market dominance—which hardly assuages concerns that with a bigger market share, it won’t raise prices faster. And, with fewer competitors, it is reasonable to assume it could manipulate rates across the entire sector. 

Conclusion 

After a surge of new streaming providers launched only a few years ago, the industry is experiencing much needed consolidation. Several mergers have already taken place, but the most potentially important is the current competition to acquire Warner Bros. Discovery. 

In most cases, light-touch regulatory policy generally yields optimal outcomes for consumers. Netflix’s proposed acquisition of Warner Bros., however, deserves additional scrutiny. It’s impossible to predict the future, but it seems very likely that such a transaction would lead to a dominant video streaming behemoth, pursued by minor, ad-supported competitors and boutique services. 

As recently as the end of 2024, a Netflix executive dismissed rumors of pursuing mergers and acquisitions, stating that the company is “better builders than buyers.”xxxix Its rapid about-face in reaction to Paramount Skydance’s offer for Warner Bros. suggests Netflix saw an opportunity to prevent a transaction that would create a competitor with sufficient scale to challenge Netflix’s dominance. 

Netflix has indeed been a successful “builder,” and deserves its success. The question for policymakers is whether a video streaming market dominated by a single, Tier 1 provider is best for consumers, for competition, for choice and for innovation, or whether a transaction that creates a stronger Tier 2 competitor for Netflix would be better. 

To ensure freedom of movement and freedom of commerce across state lines, the Constitution grants the federal government the power to regulate commerce among the states. This power, granted under the Commerce Clause, essentially established the United States as a free trade zone, where states are prohibited from enacting laws, taxes or regulations that inhibit or create unnecessary friction on economic activity between the states.

Under the Articles of Confederation, the original governing document of our republic, the 13 states tended to enact harmful populist policies designed to protect their own farmers and businesses from competition from other states. State tariffs and other protectionist measures hindered interstate commerce and contributed to a nationwide economic downturn that, in turn, led to the convening of a Constitutional Convention to remedy the problem.

It remains critical today for the federal government to preempt the states from their natural tendency to impose popular rules and regulations that affect businesses and consumers in other states or create friction for interstate commerce. The principle remains the same, though the Internet and e-commerce present new challenges and temptations the states are finding hard to resist.

Anything that happens over data networks is inherently interstate. The old analog phone network could distinguish between local and long-distance calls, but packets fly around the world at the speed of light, even if you are emailing someone in the room next door. Technology has made more of commerce interstate, such as voice communications, data exchange, e-commerce, and data hosting. Allowing the states to regulate inherently interstate commerce will simply slow commerce, the adoption of technology, and our global competitiveness.

As federalists, we need to recognize that there are legitimate roles for local, state, and federal governance, and while the states have allowed the federal government far too much regulatory control of functions that should be left to the states, regulating interstate commerce isn’t one of them.

That’s why at the Institute for Policy Innovation (IPI) we have consistently advocated federal, not state regulation of internet taxation, social media speech regulation and age verification, online privacy, VoIP regulation, and now artificial intelligence (AI). It makes no sense for there to be 51 different regulatory regimes for a business that travels across state borders at the speed of light.

It's just as much a violation of our constitutional, federalist republican system for a state to regulate AI as it is for the federal government to regulate state education. The Commerce Clause limits federal authority to interstate commerce and empowers the federal government to prevent states from burdening interstate commerce. Those of us who believe in limited government should insist on both.

It looks like some much-needed changes are coming to the media streaming marketplace, and that’s great news for consumers.

Warner Bros. Discovery, which owns over 60 different entertainment brands including HBO, CNN, Warner Bros., the DC Comics Universe, and channels like TBS, Food Network, and all the Discovery channels, is weighing a sale.

And while there may be multiple suitors, the most likely buyer of some or all of Warner Bros. Discovery is the new Paramount SkyDance—largely comprised of the former Viacom conglomerate which owns CBS and of course Paramount Studios.

Why does this matter? First, because streaming is a disaster of abundance. There’s a ton of new and archival content out there, more easily available than ever, but it’s hard to keep track of what service is running the shows you’re currently watching. I’ve even heard of people using spreadsheets to keep track of where their shows are streamed, though there are also services like JustWatch that help with this as well.

This abundance of content, by the way, is the result of two great policy decisions. The major studios promised to make their content more easily available if their copyrights were protected against piracy, and because governments agreed, the content industry kept its promise. 

The other great policy decision was to allow broadband companies to invest and build out their networks with a minimal amount of regulation and no price regulation. That led to our incredibly fast and capable broadband networks that can stream 4k video without latency.

So far so good. But by the time you total up the costs of all of your various streaming subscriptions, along with your broadband costs, it may add up to nearly as much as you used to pay for cable service. Too many subscriptions from too many services, none of which seem to be making money. Consumers need consolidation to simplify this mess and to truly fulfill the promise of streaming. 

But consumers also need media to end its leftward slant on news and entertainment, and Paramount Skydance intends to correct biases in its media properties. Viacom stagnated for decades because of family and corporate infighting, but the newly invigorated Paramount Skydance wants to correct the leftward leanings of some of their properties like CBS News and 60 Minutes. There would certainly be a benefit to the public in that, as would extending those changes to CNN.

So how should we think about the upcoming furor over a possible Paramount Skydance purchase of Warner Bros. Discovery? First of all, the federal government needs to allow a transaction to take place. The new populism within the Republican Party can sometimes be skeptical of mergers and consolidations, because they don’t want anything “Big.” But in this case, as in most cases, consolidation will actually benefit consumers by simplifying the market and likely saving money on streaming subscriptions.

And second, regulators at the Justice Department need to be wary of other potential suitors that could pose problems. Amazon, for instance, already has significant content (Prime Video), and would be twice as large as its next biggest competitor were it to acquire Warner Bros. Discovery, controlling 35 percent of the market share. Besides, Amazon is already operating under a consent decree because of deceptive trade practices related to its Prime service.

YouTube TV is being resold by Frontier and Verizon as they phase out their own IPTV offerings, which will increasingly make Google a competitor in this space. Indeed, with many major tech companies owning content and entertainment services, real content companies like Paramount Skydance need to grow and acquire other properties in order to scale up and compete with the tech companies already dominating the Internet economy.

Sometimes mergers work, and sometimes they don’t. Infamously. The AOL Time Warner merger did not work, and it was commonly believed that it was due to a clash of cultures between the content industries and the Internet industries. Now, once again, Warner is looking for a suitable partner that understands the content business, and Paramount Skydance is likely the best candidate.

Those of us who believe that markets deliver the best combination of choice and value to consumers should welcome a potential combination of Paramount Skydance with Warner Bros. Discovery. Hopefully the Trump administration will see things the same way and not add any unnecessary friction to this benefit for consumers and the health of our media and entertainment economy.

Today is Global Encryption Day, and it’s an important moment to reflect on a foundational element of our digital lives that too many take for granted: encryption.

Encryption is not just a technical layer of protection—it is a shield for individual liberty, economic growth, and national security in the digital age. At the Institute for Policy Innovation, we’ve long defended the right to strong, uncompromised encryption, and today that defense is more important than ever.

We in the United States are fortunate. Unlike in many other countries—where governments either prohibit strong encryption outright or require surveillance back doors—we enjoy robust legal protections that allow individuals and businesses to use strong encryption to secure their data and communications. That’s not the case in authoritarian regimes, where encryption is viewed as a threat to state control. The ability to encrypt our devices, messages, and online transactions is a freedom Americans should not take lightly—and must actively defend.

Unfortunately, there are still those in our own government who argue that encryption should be weakened to aid law enforcement or national security. These arguments typically invoke terrifying scenarios: terrorists plotting in secret, criminals hiding evidence behind locked phones. The implication is that if the government had access to encrypted data, we would all be safer.

But this is a dangerous and false trade-off.

First, from a purely technical standpoint, there is no such thing as a “safe” back door. A vulnerability that allows government access will inevitably be discovered and exploited by bad actors—cybercriminals, hostile foreign governments, and unreliable bureaucrats. Weakening encryption makes everyone less safe.

But even more importantly, it reflects a fundamental misunderstanding of our constitutional system. The purpose of the American government is not to maximize security—it is to protect individual liberty. Our Founders did not envision a government that promises total security in exchange for diminished liberty. Freedom always comes before security. That is the American idea.

Strong encryption empowers individuals. It protects our private communications, our financial information, our intellectual property, and our constitutional rights. It also underpins the trust that fuels our digital economy. Without it, e-commerce would stall, innovation would suffer, and privacy would be an illusion.

So on this Global Encryption Day, let’s recognize encryption for what it truly is: a necessity for a free and secure society. We must resist any effort to undermine it—no matter how well-intentioned—and stand firm in the belief that freedom is worth protecting, even when it’s inconvenient for government.

Ever watch a drama set back in the time of kings, where the court jester or someone in the king’s retinue said something that displeased the king, and they knew immediately that their days were numbered? How everyone lived in fear of displeasing the king?

One problem with kings is that, because their power is nearly unlimited, everyone is vulnerable to the king’s caprice, malice and resentments. If you want to be safe, you must take up all the king’s grievances and desires. The king is everyone’s customer.

Thus, the king’s court ends up comprised of those who constantly amplify his whims to gain his fickle favor.

That’s monarchy, not self-government. Our American political system was designed to prevent capricious rule by One. But something like that is happening right now, and the latest example is the Jimmy Kimmel saga. Let’s walk through it, in chronological order:

1. Donald Trump doesn’t like Jimmy Kimmel and threatened to get him pulled off the air.
2. Nexstar, which owns 32 ABC TV stations, announced just a month ago the purchase of TEGNA, another owner of stations. That transaction requires approval by the Federal Communications Commission (FCC). The Chairman of the FCC is Trump appointee Brendan Carr.
3. In its press release Nexstar committed to preserving “diversity of opinion.”
4. On Monday September 15, Jimmy Kimmel said something stupid about the murder of Charlie Kirk on his ABC show “Jimmy Kimmel Live!”
5. The following Wednesday FCC Chairman Carr said it is "really sort of past time that a lot of these licensed broadcasters themselves push back on Comcast and Disney, and say, 'Listen, we are going to preempt, we are not going to run, Kimmel anymore until you straighten this out, because we licensed broadcasters are running the possibility of fines or license revocations from the FCC if we continue to run content that ends up being a pattern of news distortion.'" Carr went on to say, "When you see stuff like this—I mean, we can do this the easy way or the hard way.”
6. Within hours, Nexstar, which requires Carr’s approval for their TEGNA purchase, followed Carr’s “suggestion” and preempted Kimmel. Sinclair soon followed.
7. Shortly thereafter, Disney/ABC announced the suspension of “Jimmy Kimmel Live!”

Now, where’s the problem? There’s nothing wrong with Jimmy Kimmel expressing his political opinions on his late-night TV show, “Jimmy Kimmel Live!” He has been given that platform by ABC.

There’s nothing wrong with Nexstar and Sinclair deciding to stop carrying “Jimmy Kimmel Live!” They own the stations.

There’s nothing wrong with Disney/ABC deciding to suspend “Jimmy Kimmel Live!” It’s their program.

But there is something very wrong with Chairman Carr using government power to pressure companies into appeasing the Trump administration.

Why? Because it’s a violation not of the First Amendment, and not of FCC authority, but of the principle of limited government.

The Founders created a system of limited government to protect Americans from the capricious rulership of flawed human rulers. Conservatives have always believed in limited government for this and other reasons.

For conservatives, limited government is both a principle and a norm, and norms matter. If we abandon that norm, both parties will rush to use government power to punish enemies and reward friends, and we’ll be right back to rule by capricious, flawed human beings.

July 10, 2025

Dear Commissioner,

We, the undersigned organizations, urge you to reject the National Association of Broadcaster’s petition to force competitors to use their preferred technology. While broadcasters operate under the strain of onerous regulation dating from the Second World War, new mandates on other technologies are not the solution.

NAB petitioned the Commission to mandate the adoption of Next Generation Television (Next Gen TV) with Advanced Television Systems Committee (ATSC) standards, despite widespread adoption already. Next Gen TV is already operating on ATSC 1.0 to ATSC 3.0 technologies available for broadcasters and multichannel video programming distributers (cable and satellite) should they choose to use it.

And they have chosen. More than three out of every four Americans have access to ATSC 3.0. It is available in more than 80 markets in parallel to ATSC 1.0 technology delivering digital television. The argument that this is even a problem demanding the Commission’s intervention is flimsy given this fact.

By any reasonable standard, this is a success. Under the Commission’s original 2017 report and order authorizing ATSC 3.0, broadcasters are allowed use the new standard on a “voluntary, market-driven basis.” The Commission should maintain its voluntary, market-driven adoption policy that has reached the vast majority of Americans, not embrace a mandate just to reach the small minority of markets broadcasters have struggled to penetrate.

NAB effectively asks the FCC to do their job for them by mandating ATSC adoption in the remaining markets to reach the untapped 25 percent or so of the population. In what is unfortunately a tale as old as time, they would rather use the government to limit genuine competition by forcing their competitors to adopt their standards, ironically in the name of “competition,” than petition the government to reduce their own regulatory burden so they can meet the challenges of the 21st Century.

The Commission should take the plight of broadcasters seriously. They should be understood as a legacy technology that was saddled with a steep regulatory burden back when that was in vogue in the mid-20th Century. The solution now is to deregulate and allow genuine market competition to dictate which technologies survive and thrive. This is precisely what the FCC did in 2017 with the original ATSC 3.0 order. The FCC should stick to this roadmap that has empowered consumer choice while allowing broadcasters to consolidate and capitalize.

We thank the FCC for its attention to this matter and urge you reject mandates and maintain market-driven approaches to new technologies.

Sincerely,

Grover Norquist 
President
Americans for Tax Reform 

James Erwin
Executive Director
Digital Liberty

Deborah Collier
Executive Director
Citizens Against Government Waste

Chuck Muth
President
Citizen Outreach

Daniel Erspamer
CEO
Pelican Institute

Jarrett Skorup
Vice President for Marketing and Communications
Mackinac Center for Public Policy

Tom Giovanetti
President 
Institute for Policy Innovation

Bartlett Cleland
Executive Director
Innovation Economy Alliance

Jeff Mazzella
President
Center for Individual Freedom

Paul Gessing
President
Rio Grande Foundation

David Williams
President
Taxpayer Protection Alliance

Matthew Kandrach
President
Consumer Action for a Strong Economy

Edward Longe
Director of Technology and Innovation
James Madison Institute

Rosemary Becchi
Founder and President
Jersey 1st

Jeff Westling*

Luke Hogg*

*Indicates Individual Signer

CC: Hon. Brendan Carr, Chairman, FCC

Hon. Anna Gomez, Commissioner, FCC

The federal government’s bloated, outdated information systems have finally come under scrutiny. On his first day in office, President Trump signed a series of executive orders to cut waste and boost efficiency. Defense Secretary Pete Hegseth has reinforced that mandate, spending his first 100 daysreviewing the Pentagon “from top to bottom to ensure that we're getting more, faster, better, and more efficient.”

Earlier this month, Hegseth announced that in partnership with the Department of Government Efficiency, officials had uncovered $5.1 billion in savings — “and that's just the beginning.” That’s a good start. But if the DOGE hopes to prove its worth, it must confront the federal government’s disastrous record on IT spending and performance.

It can’t happen fast enough. A staggering 80% of the annual $100 billion IT spending goes to maintaining decades-old systems. According to the Government Accountability Office, “The older the systems are, the more the upkeep costs — and older systems are more vulnerable to hackers.”

The Trump administration should make it a top priority to modernize federal IT infrastructure while also addressing how we got such a dysfunctional IT infrastructure in the first place.

In today’s AI world, government agencies cannot adapt to the most innovative and efficient technology when burdened with regulations often written before the internet even existed.

The Department of Defense is a prime example. The U.S. military buys IT systems in a ridiculously bureaucratic fashion. It takes years and millions of dollars for a company — regardless of size — to get its software approved just to pitch a product to the department. When time and money are of the essence, the only firms that can wade through the red tape are big, entrenched companies with lawyers and lobbyists to throw at outdated rules.

This procurement model directly clashes with how the private sector works. In the business world, innovators attract investment quickly. The Pentagon, by contrast, consistently favors large, well-connected firms over smaller companies and startups. Promising new technologies get ignored.

It’s the defense contractor model over the SpaceX model — and we’re paying the price.

Fixing the rules isn’t enough. We need to fix the people who enforce them. Right now, overlapping Defense Department bureaucracies oversee the procurement and deployment of new technology. A single point of contact — with one set of rules — would reduce red tape and create a unified standard for the department to follow.

That standard should reach beyond the Defense Department. Companies shouldn’t have to navigate a maze of conflicting rules across agencies — or even within the same agency — just to deploy new solutions. Procurement reform, including better training and clearer rules, must be a core part of the DOGE’s mission.

Last year’s National Defense Authorization Act made some progress, but much more still needs to be done.

Falling behind on technological modernization in defense is not just an economic disadvantage but a threat to national security. As the DOGE takes a much-needed axe to inflated government spending, let’s make sure we also cut burdensome regulations that hinder innovation and improvement. We must unleash the power of American innovation to equip our military with the finest tools — otherwise, our enemies will beat us to it.

COMCAST CORPORATION

AMERICAN LIBRARY ASSOCIATION

META PLATFORMS, INC.

OPEN TECHNOLOGY INSTITUTE AT NEW AMERICA

PUBLIC KNOWLEDGE

QORVO, INC.

SHLB – Schools, Health & Libraries Broadband Coalition

WALLER COUNTY ECONOMIC DEVELOPMENT PARTNERSHIP

It’s always a challenge in public policy when there is an apparent conflict between two reasonable positions. Eventually, these conflicts get worked out through the legislative or administrative process, but that can take a while at government speed, which could mean harm in the meantime. That’s why, for instance, we have injunctions—to prevent harm to a party while a dispute is being adjudicated.

A current dispute is the regulation of “artificial intelligence” (AI), better referred to as large language models (LLMs). These models include names you recognize, but also many more purpose-built models designed to perform specific business and industrial tasks much faster and more accurately than humans. 

The potential of LLMs should not be a surprise, as the value of a new tool is not a surprise. Already, many are using LLMs as valued assistants in their work and daily lives.

Of course, there are concerns about LLMs, about AI taking over the world, killing or harming humans, destroying jobs, embodying racism or antisemitism. But the concerns we most hear about are straight out of science fiction. (Yes, we’re aware of the recent Grok incident.)

An immediate concern is something much less sensational: Copyright. Those behind the LLMs have been quite cavalier about their use of materials protected by copyright to train their models. Already a court has found that use of copyright material for training LLMs is fair use, but unauthorized access to the material was piracy and subject to statutory damages. Other cases will of course follow.

Deciding how LLMs fit within our existing laws, or making new laws, is a process and will happen. But one thing that could bollix things up in the meantime is a patchwork of differing and conflicting state LLM regulations.

These technologies are inherently interstate in nature and thus should be regulated at the federal level as per the Commerce Clause. That’s why the penultimate version of the “One Big Beautiful Bill” contained a federal preemption of state AI regulation. But it was stripped out at the last minute at the demand of Sen. Marsha Blackburn, a fierce advocate for copyright. 

Making life difficult for AI companies with state regulation is harassment, not sound policymaking. It creates friction for AI innovation, which is what opponents of AI and “Big Tech” want.

Copyright is a federal matter, and AI is interstate commerce, so both should and will be determined at the federal level. Between Congress, the courts, the Federal Trade Commission and the Copyright Office, rules will be written, cases will be adjudicated, injunctions will be requested, and damages will be assessed.

We still need a federal moratorium on state AI regulation until Congress and the courts establish clear rules that protect property rights while otherwise not restricting AI innovation.

Commerce Secretary Howard Lutnick is right: Expanding access to spectrum will benefit consumers, businesses, and the broader economy. The most effective way to do this — while promoting innovation and competition — is to embrace shared spectrum and Wi-Fi, two proven models for commercial use.

For decades, the United States has focused on one approach: high-power licenses held almost exclusively by the three nationwide carriers that can afford to outbid competitors. But treating spectrum solely as a revenue source overlooks its broader role in driving innovation, economic growth, and national security.

That’s why efforts to advance spectrum policy through the congressional budget reconciliation process come with serious risks.

Reconciliation is a legislative tool designed for budgetary matters — not for shaping complex, long-term policy. Yet some lawmakers are considering using it to push through spectrum policy, favoring high-power auctions simply because they bring in the most revenue.

That’s a mistake.

Spectrum policy should be developed through careful, strategic planning aimed at serving the public interest — not driven by short-term budget targets. Locking the Federal Communications Commission into a one-size-fits-all approach for the next decade would limit innovation and competition.

Mandating high-power auctions through reconciliation would sideline alternative models, such as spectrum sharing, which allow multiple users to access the same frequencies. It would also jeopardize the continued expansion of Wi-Fi, the primary way most Americans connect to the internet today.

Congress should resist the urge to treat spectrum like just another line item. The stakes — for innovation, economic growth, and consumer access — are far too high.

The success of the Citizens Broadband Radio Service shows what’s possible when spectrum policy embraces flexibility and innovation. In the CBRS band, commercial users share spectrum with incumbent naval operations through a dynamic access framework. This approach has allowed a wide range of users — including small businesses, schools, airports, wireless providers, and rural communities — to benefit from spectrum access without displacing government users.

The CBRS has also positioned the United States as the global leader in private wireless networks. Its flexible licensing model proves that spectrum sharing can drive commercial innovation while preserving national security.

Now, policymakers are studying the lower 3 GHz band — located just below the CBRS — for similar shared use. This opens the door to future spectrum policy that goes beyond the traditional model of exclusive, high-power auctions.

The CBRS makes one thing clear: National security and commercial innovation don’t have to compete. With smart policy, we can advance both.

Wi-Fi offers a great example of how shared-spectrum policies drive innovation. More than 62% of U.S. internet traffic flows over Wi-Fi, which relies on unlicensed spectrum accessible to any device that meets basic interference protections. That far surpasses the 8% carried by mobile networks.

The economic value is staggering. Wi-Fi contributes more than $1 trillion to the U.S. economy every year. It fuels innovation, expands broadband access, and strengthens U.S. leadership in wireless technology. It’s also a distinctly American success story — built on U.S. intellectual property and made possible by the openness of our economic and regulatory systems.

China, by contrast, takes a rigid, top-down approach. Its spectrum policy relies on exclusive licensing aimed at controlling global 5G infrastructure and driving demand for Chinese-made hardware.

The United States pioneered spectrum auctions in the 1990s, but that was 30 years ago. Technology has evolved, and our policies should evolve with it.

With today’s advanced spectrum-sharing tools, we no longer have to choose between efficiency and openness. We can continue leading the world in wireless innovation while pushing back against China’s centralized, export-driven digital strategy.

Simply put, spectrum sharing broadens access and boosts competition. Instead of limiting access to a handful of major players, it opens the door for hundreds of companies to participate. That lowers the cost of entry and helps expand broadband in rural and underserved communities.

Shared-spectrum models also reduce the need for costly and time-consuming relocations tied to exclusive auctions. At the same time, they protect critical national security operations by minimizing interference.

The spectrum decisions Congress makes today will shape America’s digital future for decades. By prioritizing coexistence through shared spectrum and Wi-Fi, lawmakers can adopt a more competitive, resilient approach — one that maximizes public benefit while preserving national security and U.S. leadership in wireless innovation.

March 31, 2025

The Honorable Howard Lutnick Secretary
U.S. Department of Commerce
1401 Constitution Ave NW Washington, D.C. 20230

Dear Secretary Lutnick,

Our companies and organizations write to express our strong support for preserving the fundamental aspects of the 3.5 GHz Citizens Broadband Radio Service (“CBRS”) band. CBRS is a shining example of U.S. leadership and innovation, proving that dynamic spectrum sharing between federal and commercial entities works, enabling a broad range of innovative wireless services and use cases, and positioning America as the clear global leader in private wireless networks.

Due to the diligent collaboration between the National Telecommunications and Information Administration (“NTIA”) within your department, the Federal Communications Commission (“FCC”), the Department of Defense (“DOD”), and industry, the CBRS sharing framework has proven so effective that in the over five years of commercial operations in the band not a single instance of harmful interference to the incumbent DOD systems in the band has been reported. And CBRS required no relocation or modification of these DOD systems. In fact, these government agencies and industry conducted a thorough review early last year of the CBRS experience thus far and collectively agreed to refinements to the DOD protection criteria that have significantly improved commercial services in the band.

The lower-power, localized nature of CBRS spectrum, coupled with options for both protected access with Priority Access Licenses (“PALs”) or opportunistic access at the General Authorized Access (“GAA”) tier, has resulted in widespread adoption across a range of use cases and applications. CBRS spectrum has been the key enabler of deployments for advanced manufacturing (semiconductors, electric vehicles and other automobiles, agricultural equipment, wireless systems, etc.), industrial and enterprise private networks, transportation and logistics connectivity (e.g., airports and shipping terminals), the U.S. military, rural broadband, competitive mobile services, school and library access, large public venues and sporting events, healthcare and more.

Of course, mobile operators utilize CBRS spectrum as well, with Verizon being the largest purchaser of CBRS licenses. Some key CBRS statistics from the latest NTIA report1 covering April 2021 thru July 2024 include the following:

• Since the Trump Administration’s late 2020 CBRS auction, well over 400,000 CBRS Base Stations have been installed (more than ALL of the of macro cellular sites in the U.S. combined), with over 1,000 entities actively using CBRS spectrum today.
• CBRS is utilized in nearly 83% of all counties in the United States.
• This exponential growth has been accomplished overwhelmingly through private investment, without the support of government subsidy programs.

CBRS, built largely by U.S. companies using U.S. products, has positioned the U.S. as the global leader in private wireless networks (5G and LTE networks deployed by industries and enterprise companies for internal connectivity needs). In this way, CBRS exemplifies your priority of making spectrum available for American businesses. The investments made in these private networks are one of the strongest growth areas in wireless, with the sector on track for annual growth of 20% through 2027.2 The Global mobile Suppliers Association (“GSA”) publishes a periodic report on Private Mobile Networks. In the latest report3 (February 2025), the GSA noted that CBRS was both the most widely used and fastest growing band globally for private mobile network deployments.

This has established the U.S. as the world leader in the fast-growing market for private networks, far exceeding other countries like China, as shown in the following chart from the report:

As your department evaluates our nation’s spectrum needs across federal and commercial uses, we urge you to maintain and protect the existing CBRS framework and the carefully selected and mutually agreed technical parameters that enable sharing. CBRS has proven successful, typifies American technology leadership, and can serve as the foundation for future federal/commercial spectrum sharing.

Very respectfully,

Access Humboldt

Barich, Inc.

Benton Institute for Broadband & Society

Cambium Networks

Celona, Inc.

Charter Communications, Inc.

Comcast Corporation

Consumer Action for a Strong Economy (CASE)

Cox Communications

Digital Global Systems

Dynamic Spectrum Alliance

Hewlett Packard Enterprise

Imagine Wireless

Innovation Economy Alliance

Institute for Policy Innovation

JMA Wireless

Mediacom Communications Corporation

Midcontinent Communications

NCTA – The Internet & Television Association

Open Technology Institute at New America

The Schools, Health, & Libraries Broadband (SHLB) Coalition

Nextlink Internet

Public Knowledge

Spectrum for the Future

Syracuse University

Tarana Wireless

U.S. Black Chambers, Inc.

United States Hispanic Chamber of Commerce (USHCC)

WISPA – The Association for Broadband without Boundaries

CC: Mr. Adam Cassady, Acting Assistant Secretary of Commerce for Communications and Information and Acting NTIA Administrator

Artificial Intelligence (AI) is the latest technological “thing” that’s going to change the world—unless it destroys it.

Or at least, that’s the impression most people get from major media and social media channels.

February 5, 2025

BEFORE THE

EXECUTIVE OFFICE OF THE PRESIDENT

OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

Washington D.C.

Docket ID: USTR-2024-0024, Request for Comment on the Section 301 Investigation of China’s Acts, Policies, and Practices Related to Targeting of the Semiconductor Industry for Dominance.

The Honorable Juan Millán
Acting United States Trade Representative
Office of the United States Trade Representative
600 17^th Street NW
Washington, DC 20508

Dear Acting United State Trade Representative Millán:

I and my colleagues at the Institute for Policy Innovation (IPI) would like to thank the Office of the United States Trade Representative for inviting comment on the Section 301 proceeding into China’s targeting of the semiconductor industry, and for considering our input.

The Institute for Policy Innovation is a non-profit, non-partisan public policy “think tank” based in Irving, Texas, and founded in 1987 to research, develop and promote innovative and non-partisan solutions to today’s public policy problems. IPI is a public foundation, supported wholly by contributions from individuals, businesses and other non-profit foundations.

We at IPI believe in free trade, as in the most liberal trade policies possible. We generally oppose government interfering in a transaction between a willing seller and a willing buyer, regardless of whether that transaction crosses political borders. We’re fond of saying “countries don’t trade; people do.”

However, every policy position and principle must consider national security, which is among the most vital functions of government. Genuine national security concerns should always factor into any government policy decision. Too often recently national security has been used as a pretext for old fashioned protectionism and zero-sum thinking on trade, and we are critics of such pretext. However, the matter upon which we comment today is a genuine and obvious national security matter.

Through tightened export controls and the CHIPS Act, the United States has continued to expand policies to protect domestic semiconductor manufacturing capabilities—policies that encompass both industrial competitiveness and national security components. Initiatives to bolster U.S. semiconductor production, and thereby improve supply chain security, have been supported by each of the past three presidential administrations (Obama-Biden, Trump-Pence, Biden-Harris); Republican and Democrat lawmakers; and even U.S.-allied nations, including Japan and the Netherlands, which are dominant suppliers of lithography semiconductor equipment.

So long as China maintains its ideology and poses a threat to the free nations of the world, reducing our dependence on China for critical chips and depriving China of advanced technology are in the national security interests of the United States. Further, while total semiconductor supply chain self-sufficiency (i.e., no reliance on foreign suppliers) is inadvisable and unfeasible, preventing China from monopolizing the legacy chip market, including upstream inputs like Silicon Carbide (SiC) substrates and wafers, is necessary for America to have a secure and reliable supply via domestic production and  “friend-shoring”—reorienting global supply chains away from adversarial countries to those with which the U.S. has normalized relations.

As the USTR’s investigation docket notes, China has “nearly doubled its global share of foundational logic semiconductors production capacity” over the past six years. CIO magazine reported in December 2024 that China is poised to account for more than 60% of new global capacity for legacy chips by 2030, which is “supported by billions of dollars in subsidies, wage-suppressing labor practices, and state-directed technology transfers.”

The Chinese Communist Party (CCP) remains committed to achieving dominance in emerging high-tech industries, as outlined by the national “Made in China 2025” plan, which is predicated on state-funded subsidization. Last year China established its “largest-ever” semiconductor investment fund, a $47.5 billion initiative spearheaded by the country’s six largest state-owned banks. This third and largest round of financing indicates the Chinese government is “doubling down” on its strategy to create overcapacity and thereby price out competitors.

SiC production is the latest industry targeted by the CCP to consolidate semiconductor supply chains. SiC wafers have become a preferred semiconductor base material because of their improved performance, especially in high-power applications, such as electric vehicles (EVs), aerospace technology, solar panels, and defense systems. Late last year media reported that Chinese oversupply depressed prices for six-inch SiC wafers to about 25% below manufacturing costs and caused eight-inch SiC wafer prices to fall 50% in six months.

Those trends corroborate that the Chinese government and its state-sponsored companies are applying the same strategy China used to monopolize global LED, renewable energy, and battery manufacturing markets, among others. That is, leverage state subsidies to bolster domestic production, deflate market prices, and force out free-market competitors.

Unlike China’s dominance in the other markets, its gains in SiC substrates wafer production pose a threat to the United States’ national security. SiC-wafer semiconductors are a critical component of EV powertrains, battery chargers, rail transit, and electrical power grids. If China is allowed to gain an even tighter grip on SiC production, U.S. supply chains for these important industries will become even more dependent on one of our country’s biggest adversaries.

Likewise, U.S. national defense systems could become dependent on Chinese suppliers in the same way. Many flagship defense networks—particularly radar-dependent systems, like the Aegis Missile Defense, avionics systems, and satellite programs—rely on SiC-wafer chips, which can operate in harsh conditions. Supply-chain dependence on China could jeopardize the integrity and functionality of these (and other) defense systems. American military leaders and reports consistently identify China as the greatest threat to U.S. national security, and it’s reasonable to assume that in the event of a military conflict with China or one of its allies, China would sever sales to the United States, significantly disrupting supply chains.

IPI commends the USTR and related U.S. government agencies for working to strengthen America’s semiconductor supply chains. IPI supports USTR’s Section 301 investigation and believes evidence warrants trade controls to prevent China from subverting U.S. legacy chip and particularly SiC-wafer semiconductor manufacturing.

Thank you for your consideration. I am available to answer questions and welcome the opportunity to discuss these issues with USTR leadership in greater detail.

Sincerely,

Tom Giovanetti
President
Institute for Policy Innovation (IPI)

With a presidential election looming, many are still weighing how they will vote for at the top of the ticket.

Polls suggest that Americans are not especially thrilled with the choices before them.

I can’t tell you who to vote for, but I can add this important factor: A president makes around 4,000 political appointments, 1,200 of which require U.S. Senate confirmation.

So while it’s easiest to view a presidential election as a popularity contest, in reality you are voting for a team of 4,000 appointees who will be wielding the levers of federal power.

In the 2020 election, the American people chose a team that believed in massive expansion of federal spending, federal regulation, and federal intervention in the economy.

And it mattered.

One such example is Biden appointee Lina Khan, chosen to head the Federal Trade Commission (FTC).

Under recent administrations, both Republican and Democratic, the FTC has generally stayed within its limitations with the understanding that the American people generally want a free-market economy.

Not so with the Biden administration and Lina Khan.

Under Ms. Khan, the FTC has pursued a hyper-aggressive intervention into the economy, launching lawsuits that in some cases have not even been supported by senior FTC staff.

In her remarks at the 2023 The New York Times "DealBook Summit," Khan openly endorsed aggressive enforcement tactics over more measured approaches.

However, this strategy has backfired, causing the agency to exceed its authority, lose multiple court battles, and implement unnecessary regulations that threaten the nation's economic well-being.

In the almost three years since she became chair, the FTC has failed to win a single merger challenge it brought to court. This losing streak has spanned high-profile cases such as Microsoft's acquisition of Activision Blizzard, Meta's acquisition of Within, and Illumina's acquisition of Grail.

But agencies like the FTC can launch rulemakings that don’t require court approval, and Khan has been similarly aggressive in that sphere.

A good example is the FTC's proposed rule to ban junk fees.

This rulemaking overlooks the important role these fees play in enabling businesses to offer customers a wider array of options.

Take airlines, for example — by charging baggage and seat selection fees, they can keep base ticket prices lower, making air-travel more accessible to a broader range of flyers.

Without these fees, airlines would need to raise base fares, pricing out many cost-sensitive customers. The same principle applies to fees charged by banks, cable providers, event venues, and other businesses — the extra charges enable them to maintain a diverse array of service tiers and packages to cater to different customer needs and preferences.

Ultimately, these fees are not a deceptive tactic to extract small amounts of money from consumers, but a practical mechanism that fuels business competition and consumer choice.

Furthermore, a February 2024 report by the U.S. House Judiciary Committee noted that the Chairwoman wanted to appear "aggressive" but was actually acting "with little regard for the consequences of losing in a way that negatively affects the enforcement agenda."

Clearly, under the chair's leadership, the agency has prioritized her personal and political agenda over protecting American consumers from scams, fraudsters, and other harms.

The FTC's misguided priorities risk undermining the competitiveness that fuels our nation's prosperity. It's time for the FTC to realign its mission and refrain from overreaching into areas beyond its purview. Instead of trying to run the economy according to Khan’s preferences, the FTC must return to protecting consumers from actual, demonstrable harms.

That won’t happen under a Harris-Walz administration, but it might not happen under a Trump administration, either.

While Kamala Harris has obviously endorsed Khan’s actions, Trump’s vice presidential pick Sen JD Vance, R-Ohio, has also expressed support for many of Khan’s actions.

Still, administrative rulemakings are subject to challenge in the courts, and courts have become accustomed to rejecting Khan’s arguments.

The real lesson is that if voters elect leaders that believe in expanding government power, that’s exactly what they will get.

September 16, 2024

Federal Communications Commission
Marlene H. Dortch
Secretary
45 L Street NE
Washington, DC 20554

Re: Promoting Consumer Choice and Wireless Competition Through Handset Unlocking Requirements and Policies, WT Docket No. 24-186

Dear FCC Chairwoman and Commissioners:

The undersigned groups write to you today in support of the Federal Communications Commission’s (FCC) Notice of Proposed Rulemaking on handset unlocking, which was adopted unanimously and with bipartisan support. The notice explores how best to achieve regulatory parity by crafting a uniform unlocking framework for the entire wireless industry. Fostering an industry-wide solution will create a level playing field for carriers and consumers alike. It is a common-sense policy approach and would be a welcome improvement to previous FCC unlocking decisions, which yielded asymmetric regulation and were imposed on an ad hoc basis with a limited record.

The current landscape for handset unlocking is a patchwork of requirements. Increasingly, it is driven by one-off regulatory conditions that are applied to individual wireless carriers as part of a transaction. For example, a carrier may have unlocking obligations tied to specific spectrum holdings or because of an acquisition. Meanwhile, other carriers may unilaterally set policies or follow industry best practices, such as the CTIA Consumer Code. A uniform approach applied across the industry will address this inconsistency, enhance competition, and create regulatory parity. In contrast, the current piecemeal approach to unlocking could further distort the market through the imposition of additional company-specific obligations in future mergers or spectrum acquisitions.

We believe uniformity benefits consumers and competition. A standard should be set after a close review of the record in this matter and with careful consideration of the impact of any obligations adopted by the Commission on various wireless industry segments.

In today’s dynamic wireless marketplace, carriers compete fiercely to win and retain customers by offering faster, better, and more affordable wireless products and services. Consumers, in turn, should have the freedom and flexibility to switch from one carrier to another competing provider. Adopting uniform unlocking standards across the mobile industry will enhance consumer choice and spur even greater competition. Unlike heavy-handed regulations such as price controls that discourage market entry and investment,
competition through parity will make the mobile market stronger. That is especially true where, as here, past FCC action already has created a regulatory imbalance.

Regulatory parity should be the Commission’s goal. Without a common framework, handset unlocking obligations will become even more convoluted as the market continues to evolve through future M&A, changes in spectrum holdings, new competitive entry, and the emergence of new business models and offerings.

Thank you for prioritizing this important issue. We look forward to working with the FCC on an approach that brings parity to handset unlocking across the mobile industry to the benefit of consumers and competition.

Sincerely,

James L. Martin, Founder/Chairman
60 Plus Association

Saulius “Saul” Anuzis, President
American Association of Senior Citizens

Steve Pociask, President and CEO
American Consumer Institute

Curt Levey, President
Committee for Justice

Roslyn Layton, PhD
Center for Communication, Media and Information Technologies, Aalborg University

Bronwyn Howell, PhD
Victoria University of Wellington
American Enterprise Institute

Petrus Potgieter, PhD
Institute for Technology and Network Economics

Silvia Elaluf-Calderwood, PhD
Jack D. Gordon Institute for Public Policy
Florida International University

Tom Giovanetti, President
Institute for Policy Innovation

Gerard Scimeca, Chairman
Consumer Action for a Strong Economy

Matthew Kandrach, President
Consumer Action for a Strong Economy

The House Energy & Commerce Committee was scheduled to “markup” the Kids Online Safety Act (KOSA) this morning but cancelled the markup at the last minute. (Proposed bills go to a committee markup to give members opportunities to change or amend a bill and to see if there is committee support to move the bill along toward a possible full vote.)
 
In the case of KOSA, there are too many problems to advance the bill, even though many proponents have the best of intentions. So it’s a good thing that the markup has run into problems.
 
Let’s focus on the biggest problem: Mandating age verification.
 
The best online privacy practices include the following principles: Don’t collect personally identifiable data (PID), such as driver’s license numbers, physical addresses, Social Security numbers, etc. And don’t store information any longer than necessary to provide the service, because of the cybersecurity danger of having information stolen and sold to criminals.
 
It isn’t a perfect system, but the most harmful hacking incidents have been when such information WAS collected and persistently stored.
 
Here’s the thing: KOSA requires that online platforms do ALL of those things. Companies MUST collect personally identifiable data, and they must store it.
 
And they won’t just be collecting information on minors. How does a platform know that a 45-year-old isn’t fourteen without performing age verification on the adult? In fact, there is no such thing as age verification—there is only identity verification, of which age is a subset.
 
So either the platforms themselves will have to verify street addresses against property tax databases, or verify driver’s license numbers and birthdates.
 
And turning to a “trusted third party” solves nothing. AU10TIX is an Israeli company that functions as a trusted third-party verifier of identity for companies like TikTok, Uber, Upwork, Coinbase (gulp) and X (formerly Twitter). And guess what? AU10TIX got hacked, exposing users driver’s licenses and other personal information.
 
The way to protect privacy is to NOT collect personally identifiable information, not for the federal government to mandate its collection.
 
KOSA is also problematic on First Amendment grounds, for creating an undefined “duty of care” for companies, for creating enormous potential financial liability for platforms, and for granting significant new powers to the administrative state in the form of the Federal Trade Commission. There’s a lot wrong with KOSA.
 
Just because the name of a bill or the intentions behind it sound attractive doesn’t mean that the proposed government solution isn’t worse than the problem. Congress should take a pass on KOSA until and unless the many problems with it can be resolved.

This morning, the Subcommittee on Innovation, Data and Commerce of the House Energy and Commerce Committee (whew!) held a hearing to consider two bills aimed at amping up federal regulation of Internet speech and privacy. 

• Kids Online Safety Act, or “KOSA,” is draft legislation intended to protect minors from alleged online harms.
   
• American Privacy Rights Act, or “APRA,” is a discussion draft (something less than draft legislation) intended to go beyond protecting minors to create a nationwide privacy standard regarding the way companies handle consumer data and privacy.

There has been a lot of discussion about the need for privacy legislation for years, but we think it was wise for governments to move slowly, if at all. Technology changes rapidly, innovators iterate frequent changes to their products, industries work to develop best practices, and consumers over time learn how to navigate ever-changing technologies.
 
Moving slowly and only legislating when needs have become clear and when there are demonstrated harms reflects a conservative approach to governing.
 
Of course, in our federal system, the states also legislate and regulate, and states have begun passing laws and regulations designed to address these same problems. But the states that have acted have passed laws that are in conflict with each other, have different definitions, and create differing compliance burdens for companies. Additionally, we expect many of these laws to be invalided through future Supreme Court decisions, because state legislators have been more concerned about scoring PR points than protecting the First Amendment, which is pretty clear about government regulation of private speech.
 
Further, and obviously, because the Internet is inTERstate rather than inTRAstate commerce, federal rather than state legislation is appropriate. The Commerce Clause is pretty clear about that as well.
 
So the APRA effort in particular could be useful in pre-empting conflicting state regulations and creating uniform national standards and definitions.
 
The problem is, while both KOSA and APRA have noteworthy intentions and useful provisions, neither of these bills is ready for prime time, and both contain significant problems.
 
KOSA is particularly problematic in that it empowers federal regulators to restrict the First Amendment speech rights of Americans and creates huge new legal liabilities in the process. KOSA would also give significant new powers to the Federal Trade Commission—an agency that is already out-of-control and grasping for more power during the Biden administration.
 
It’s possible that either or both KOSA and APRA can be refined through committee work to play a positive role in Americans’ privacy and data security, but we aren’t there yet. And, as always, just because the name of a bill sounds attractive and there are problems to address doesn’t mean that the proposed government solution isn’t worse than the problem. The Devil is always in the details, and there are still lots of problematic gremlins lurking in both KOSA and APRA.

Well, that didn’t take long. After the Biden administration finally secured the necessary commissioners to form an operating 3-2 Democrat majority, the Federal Communications Commission (FCC) announced Wednesday that it will hold a vote to again reclassify broadband networks under Title II of the Communications Act of 1934.
 
A brief history. Activists have been calling for federal regulation of the internet since the 1990s, but the Clinton and Bush administrations wisely took a light-touch approach, understanding that regulation would impose unintended consequences on this nascent technology.
 
As the broadband revolution began in the 2000s, the FCC chose to classify broadband networks as Title I information services rather than as Title II common carrier services. The difference was significant, because under Title II the FCC would have almost unlimited regulatory power over broadband.
 
We’ve all seen how broadband networks have thrived under a light-touch Title I regulatory authority, with the growth of ecommerce, streaming entertainment services, social media, and the smartphone revolution.
 
But that innovation and economic growth has not deterred activists who simply believe in federal control for the sake of federal control. And in 2015 the Obama FCC, absent any compelling data, voted to dramatically change course and reclassify broadband networks as Title II common carriers.
 
The ominous threat of heavy regulation had the consequence of discouraging private investment in broadband networks, which the FCC found to have declined by around $1 billion between 2014 and 2015.
 
Over the 20+-year history, broadband network were only classified as Title II common carriers for a brief two years, from 2015 until 2017. The Trump administration’s FCC returned broadband services to their original Title I classification.

Since then, broadband speeds have increased, and real broadband prices adjusted for inflation have fallen 12 percent since 2017.  In fact, broadband prices have remained mostly flat during a time when inflation has been driving up the cost of almost every other consumer service.

In other words, there is evidence that Title II classification caused a harmful drop in infrastructure investment, but not a single piece of evidence of any benefit from Title II, much less any evidence that consumers have been harmed since that two-year experiment was wisely reversed.

But now, here we go again. For purely ideological reasons, and without data or examples of harm, the Biden FCC is reasserting its power to regulate broadband networks under Title II.

Not only is such a move unnecessary and in fact contrary to evidence, but these major policy pendulum swings every time the White House changes hands cause uncertainty for broadband companies and investors, which prevents the kind of long-term planning and financing necessary for major infrastructure investments.

So, net neutrality is back. But the Institute for Policy Innovation (IPI) will be there pushing back against harmful regulation of the internet, just as we have since the internet was being called the “information superhighway.”

On the surface, a “responsive” government seems like a good idea.
 
But the Founders recognized the tendency of elected politicians to chase the approval of voters could lead to bad policy and the trampling of rights, which is why they designed a system of checks and balances to slow down the responsiveness of government.
 
The way I have often responded is “we don’t want a responsive government; we want a limited government.”
 
A “rush to legislate” is almost always a bad idea. It’s better to let new innovations and technologies play out, and then only regulate or legislate if discrete problems have become obvious. Otherwise, we run the risk of letting precaution get in the way of innovation.
 
We see this rush to legislate in many areas of public policy, but today perhaps the best example is the concerns and fears about artificial intelligence (AI). At both the state and federal levels, legislators are rushing to “get out in front” of the issue and show voters they are being responsive.
 
Of course, protecting ordinary Americans and public figures against abuses facilitated by generative AI is a worthy goal. But many of the so-called “digital replica” bills currently moving in state legislatures go too far in creating unintentional legal liability for innocent bystanders. They could also violate First Amendment free speech protections.
 
Furthermore, in most cases existing law is adequate to cover the majority of concerns. States and the federal government already have laws against deceptive trade practices, fraud and deception, and laws governing name, image and likeness (NIL). Misappropriating someone’s likeness is already punishable under existing law.
 
But that hasn’t stopped states from moving legislation that could, in some cases, make it illegal for you to use color correction on a photo of a performer that you post on social media. Tennessee has already passed its ELVIS Act, which thankfully was significantly amended before passage, to address these concerns and to narrowly target performers’ rights. But many state efforts are far broader, as is the proposed federal No AI Fraud Act.
 
Imagine the minefield these digital replica bills would have created for the movie “Forest Gump,” for instance, where actor Tom Hanks was digitally edited into a host of historical footages. Without First Amendment fair-use protections, much of the film might have been subject to legal liability under these new digital replica bills. The same could be said about the current streaming hit “For All Mankind,” which is an alternate history of the Space Age in which, for instance, John Lennon is not murdered and lives into the Reagan administration and is portrayed as criticizing President Reagan.
 
Again, it’s eminently reasonable to protect performers as well as ordinary Americans against abusive uses of AI. But legislators should be cautious in their rush to legislate on AI to not rule out tools that can be used for innovation and creativity, especially when existing law covers most concerns.

Yesterday, the United States Supreme Court heard oral arguments over state attempts to regulate content moderation on social media platforms, NetChoice v. Paxton (Texas) and Moody v. NetChoice (Florida). The two cases differ in some details but not in intention and certainly not in constitutional harms.
 
Driven by outrage over “Big Tech’s” supposed discrimination against conservatives, the very red states of Florida and Texas jammed legislation through that allowed state legislators to demagogue against the tech menace and to preen for the voters. But for many of us, the constitutional defects of the legislation were painfully obvious.
 
And those defects were made clear in Monday’s oral arguments. 

• Social media sites are private actors, not government actors. Only the government can censor speech, which is a violation of the First Amendment. Conversely, as a private actor, social media sites are protected by the First Amendment against government control of the expression they choose to host. The First Amendment exists to protect private actors against the government, not to empower government over private actors.
  
  
• Websites have a right to curate the experience they want their customers to have. One justice brought up the example of “shouldn’t a Catholic discussion website have the right to exclude onery Protestants?” A state regulation demanding viewpoint neutrality not only would bar that example but would actually require websites to allow antisemitic posts if they allow pro-semitic posts.

In a bizarre development, the Texas solicitor general cited the support of Tim Wu and Zephyr Teachout—two of the most radical progressive actors in the tech space—for the Texas legislation that was driven by social conservatives.

Which reminds us that social conservatives aren’t the only ones who want to regulate online speech. Empowering government to regulate online speech won’t be limited to the preferences of a couple of red states.

In other words, what is at stake is not just a few big social media platforms, but the future of online speech.

Ultimately, these efforts will fail. Most likely, the Supreme Court will find them to be unconstitutional. And over time the panic over social media harming society will take its place in the long line of panics over things like violent video games, rap music, racy television shows, pop music and even Elvis Presley.

But there is another scenario. The Texas law not only demands that social media sites enforce viewpoint neutrality, but it also outrageously bars such companies from leaving the Texas market. So if social media platforms are forced to comply with these laws, these sites would soon be filled with all sorts of harmful, offensive content, which would drive advertisers and users away from those platforms and eventually cause them to fail.

Unless that was the legislators’ real goal in the first place.

Both state and federal legislators are actively pushing legislation designed to “protect our children online.” Of course, there is already a federal Children’s Online Privacy Act that regulates the online collection of personal information about children under 13 years of age to such a degree that social media sites largely disallow those under 13 in the first place.
 
So, who we’re really talking about are teens, and the legislators who want government to step in and limit their time or completely stop them from accessing social media by requiring social media sites to implement age verification.
 
But these proposals go well beyond a self-declaration of age like one might find on a liquor company’s website. Rather, the legislation would impose legal liability and large fines on companies that do not block teens from opening a social media account, or from being online at all, unless they can prove parental consent.
 
Often the sponsors assert that “we” should know if “kids” are online. That’s fair enough since those enabling access to being online should definitely know if their teens are online and what they are doing. But rarely are proponents of age verification forthright about what’s involved in requiring age verification and knowing who is online.
 
There are moral, ethical, constitutional and even patriotic arguments against these age verification schemes but the operational challenges alone are worth noting. Because you cannot verify age without verifying identity, the first task a company must face is determining that an account is being set up for a teen.
 
Data and proof will have to be collected to verify the identity of the teen who wants the account and also for the adult who is required to approve. Evidence will be necessary to document the relationship between the teen and the adult, parent, guardian, teacher, etc. Proof that the adult has the authority to approve the teen will also be needed. Then consider the complications of divorce and custody, or teens in foster care. The documentation required will be extensive and intimate.
 
What about adults who simply want to open their own account? They will have to prove their identify to prove they are an adult. No more anonymity. Think that’s a great policy goal? Perhaps for those who aren’t victims of stalking or an abusive marriage, or people trying to start over while reconnecting with supportive friends.
 
How will a company avoid liability if the data is correct but the submitter is gaming the system? Perhaps a biometric identifier will be needed, eye scan or fingerprints on the device so that the person claiming to be an adult can be verified as a specific adult.
 
Of course, all the collected data will have to be stored/retained at least until a statute of limitations runs out just to protect the company from legal liability. Do we really want all that information about adults and their teens stored in a giant database?
 
These proposals seem non-serious, or perhaps the legislators and organizations peddling such intrusive government across the country hope people just won’t think through the details. The shift toward heavy regulation and liability might lead some to speculate whether the real motive is to drive up costs for social media so the companies will be put out of business by weaponized government.
 
Protecting kids is a worthy goal for us all, but there are ways to do it that don’t require sacrificing our liberties and violating our privacy, which is a harm in itself, including for our teens.

You can be excused for losing track of the many new federal spending programs (and their accompanying acronyms) that were summoned into existence by the Biden administration and a compliant Congress in 2021’s $1.2 trillion Infrastructure Investment and Jobs Act. You can have a lot of Big Government fun with a trillion or so dollars.

Most conservatives had little enthusiasm for the infrastructure bill, and even less in the ensuing years. Inflation quickly rose to above 9 percent 10 months after the infrastructure bill became law. Besides, most conservatives never really bought into the argument that the U.S. suffered from “crumbling infrastructure” that required huge taxpayer subsidies to remedy.

Communications networks are obviously infrastructure, so it was no surprise that $65 billion of the $1.2 trillion created several new programs designed to increase availability and access to broadband networks.

It’s hard for fiscal conservatives to justify $65 billion in taxpayer dollars to subsidize more broadband, especially since somewhere around 94 percent of Americans already have access to broadband through private sector providers. And, for the most part, we don’t.

But access to a physical broadband connection is different than adoption—actually subscribing to a broadband service. So as broadband networks became nearly ubiquitous, the “digital divide” discussion morphed from access to adoption. And there are a lot of American households who could connect to broadband but do not for various reasons.

Depending on whose numbers you use, something around 40 percent of low-income households do not subscribe to broadband services or have a computer in the home. And while this may seem like a matter of individual choice, the pandemic made it clear that access to broadband is a social good—not only because of the need for access to remote education, but also to telemedicine and other critical services.

So with $14.2 billion of the infrastructure bill, Congress created the Affordable Connectivity Program (ACP) to help subsidize broadband adoption by low-income households. To date, around 23 million households have gained household broadband because of the ACP.

One virtue of the ACP program is that it didn’t require the creation of a new bureaucracy or the hiring of a large number of new federal workers. The benefit goes directly to needy households. It’s also stingier than the pandemic-era program that it was designed to replace. All-in-all, as federal programs go, targeted and efficient.

But ACP funding is projected to run out in April, and this week the FCC began phasing down the program. The likelihood is that most of the 23 million households assisted by the ACP will once again lose broadband service.

With $6-7 billion, Congress could extend the ACP for another year, and there are various proposals to do so, but so far, none of them have made much progress.

IPI will be on-guard against wasteful state and federal spending on duplicative new taxpayer subsidized broadband projects that compete against existing private sector providers. Much of the infrastructure spending was unnecessary, much will be poorly allocated, and some will actually be counterproductive.

But the ACP program, by comparison, is an efficient and targeted program that accomplishes its intended purpose.

If Congress were of a mind to scrap all non-essential spending to set our fiscal house in order, we’d be ecstatic about that. But short of such conviction, it seems unwise to allow the ACP program to expire through congressional neglect.

Remember when Republicans said they opposed Big Government and the “nanny state?”

Remember when Republicans said children belonged to their parents and not to the state, so the state should stay out of the business of how to raise children? That it doesn’t “take a village” — it just takes a family?

Remember when Republicans insisted that individual responsibility was one of their key policy principles and that to make a third party responsible for behavior creates a moral hazard?

Remember when Republicans believed that the primary job of corporations was to maximize shareholder value and that imposing social duties and obligations upon corporations politicized them and made them into quasi-governmental actors?

Yeah, me too. But those days are gone, at least for now.

In yet another example of how populism has infected the Republican Party and cracked up the conservative Reaganite coalition that delivered roughly 40 years of economic growth and vitality to the country, a significant number of Republicans are supporting a big-regulation bill sponsored by Sen. Richard Blumenthal, a Connecticut Democrat who is one of the most progressive leftist elected members of Congress.

The bill is the “Kids Online Safety Act,” or KOSA. Among other Big Government provisions, KOSA would create legal liability for internet platforms for young people “harmed” by social media, and impose a “duty of care” upon social media companies. It would shift responsibility from parents to corporations, making social media platforms legally responsible to “protect children” without telling them how to do so. It essentially puts social media companies in a no-win situation.

In other words, it’s the standard kind of anti-corporate regulation we expect from progressive leftists.

Here’s what’s new: The co-sponsor of the legislation is socially conservative Sen. Marsha Blackburn, R-Tennessee. And many other elected Republicans in Congress are enthusiastic about this opportunity to join the progressive left in regulating internet platforms.

If we were talking about regulating any other industry, we probably wouldn’t be witnessing quite the same Republican eagerness to regulate. But bashing “Big Tech” has become the cause of the moment for a lot of elected Republicans. The grassroots are angry at the tech industry, especially social media companies, and elected Republicans have an innate sense to try to harness their voters’ anger for their own benefit.

Everyone seems to be mad at Big Tech these days, but especially populist Republicans. They’re sure that social media platforms like Facebook and X (formerly Twitter) discriminate against their favored content, such as vaccine fearmongering and stolen election conspiracies. They think that somehow they should have the right to determine which books Amazon promotes and which Amazon does not.

The nice thing about principles is that they provide bright lines and guardrails. When you operate by principle, you may sometimes find that you are actually defending the rights of those who disagree with you, believe it or not.

That’s the difference between the conservatism I have known since listening to Ronald Reagan’s radio essays over the breakfast table as a teenager and today’s populism. Conservatives follow their principles, even if the end result is not the one they prefer. Populists, on the other hand, start with a preferred outcome and will pursue any means necessary to accomplish it.

So, when it comes to the Kids Online Safety Act, conservatives who value principles such as individual responsibility, limited government and limits on civil lawsuits would never support an effort to saddle the most innovative U.S. companies with impossible regulatory burdens and new legal liability to be exploited by trial lawyers. They would never assert that it is the job of corporations to protect children rather than holding parents accountable and responsible.

Populists and progressives, on the other hand, have a desired outcome. In this case, it’s simply sticking it to Big Tech for perceived wrongs, and they don’t care what ancillary damage is caused and what harmful precedents are established.

It is parents who are primarily responsible for protecting their children from the harms of smoking, alcohol, drugs and yes, social media. Conservatives used to know that.