Consumer and industry advocates sounded alarms late last week over a proposed California ballot initiative that would make social media companies liable for up to $1 million in damages for each child their platform injures. Courts would likely find that Common Sense CEO James Steyer’s December proposal violates the First Amendment and Section 230 of the Communications Decency Act, said comments California DOJ forwarded to us Friday. For example, “Initiative 23-0035 is a misguided and unconstitutional proposal that will restrict all Californians’ access to online information,” the Electronic Frontier Foundation (EFF) said.
321 de minimis
De minimis is a policy described in Section 321, 19 USC 1321. It allows the import of articles duty and tax free, provided their aggregate fair retail value does not exceed $800 in the country from which the articles are imported. Additionally, the articles must be imported by only one person on one day. The previous de minimis threshold was $200, but the Trade Facilitation and Trade Enforcement Act increased it to $800.
An FCC proposal prioritizing application processing for broadcasters that originate local programming may not offer enough incentive to change behaviors and would likely favor the largest broadcasters that already create their content, said broadcast attorneys and academics in interviews Thursday. Since the proposal would apply only to applications facing holds or petitions to deny, it also may not have a wide reach, said Fletcher Heald broadcast attorney Anne Crump. “Ultimately, it won't really make that much difference because the vast majority of applications just run a normal course.”
A pair of South Carolina age-verification bills will advance to the full House Judiciary Committee, which is scheduled to meet Tuesday. During a livestreamed meeting Thursday, the Constitutional Laws Subcommittee unanimously greenlit H-4700, which would require parental consent for minors younger than 18 to access social media, and H-3424, meant to keep kids off pornographic websites. The committee approved amendments to both bills by voice vote. House Judiciary Committee Chairman Weston Newton (R) revised his social media bill to be more like Louisiana’s similar law, he said. It was originally akin to a law in Utah, which faces an industry lawsuit (see 2312180054). The amended H-4700 requires social websites make commercially reasonable efforts to verify the age of South Carolina account holders and restrict anyone younger than 18 from having accounts unless they get parental consent. While tasking the state attorney general with enforcement, the amended bill continues to include a private right of action like Utah's does, said Newton. And the bill now requires online safety education for grades six through 12. Legislators should provide more support for parents and try to curb social media companies’ incentives to exploit children, said Casey Mock, Center for Humane Technology chief policy and public affairs officer. Social media companies made $11 billion in revenue from U.S. kids 18 and younger in 2022, including $2 billion from those younger than 12, said Mock, citing a Jan. 2 Harvard University study. Lawmakers should require “safety by default,” a design approach that is light touch, technology agnostic and content neutral, said Mock. Don’t be scared by tech industry "pressure tactics,” said Mock, referring to a NetChoice official mentioning litigation against other states at the South Carolina panel’s meeting last week (see 2401110044). An amendment to H-3424 tightens the definition of a pornographic website and gives sites three ways to verify age: a digitized ID card, an independent third-party verification service or “any commercially reasonable method that can verify age,” said sponsor Rep. Travis Moore (R): It also removes language directing the AG to develop rules. Wednesday in Utah, the Senate Judiciary Committee voted 4-0 to approve a bill (SB-89) delaying seven months to Oct. 1 the effective date of the state’s litigated social media law.
The FCC approved an NPRM on a 3-2 party line vote that prioritizes evaluation of applications from broadcasters that originate local programming. “Here, we propose to sweeten the incentives for locally-originated news and content,” said Chairwoman Jessica Rosenworcel in a statement released with the item. “Without it, stations can just pump in programming from the largest metropolitan areas and miss opportunities for content creation in their own backyard.” The NPRM proposes to use station quarterly programming lists to evaluate whether a station originates local programming, and prioritizing review of applications from those stations. The priority review would apply only to applications that aren’t going through a “simple” review process, such as those with holds or petitions to deny, the NPRM said. The item positions the proposal as a correction of the 2017 removal of the main studio rule. In it, the agency questions “whether the Main Studio Elimination Order’s predictive judgment -- that the Commission’s action there would foster creation of more and better local content -- has actually come to pass." The order’s criticism of the elimination of the main studio rule is the basis for Commissioner Brendan Carr’s dissent, he said: “There is no basis for asserting that conclusion here, but more fundamentally there is no reason to get into that rule at all in this Notice.” Carr said the majority declined to remove the language. “How can the FCC ground its localism proposal in the FCC’s record-less conclusion that the 2017 main studio repeal was an error while simultaneously not proposing to reinstate that rule?” Carr said, adding that he hoped the disagreement was “an isolated hiccup in our otherwise good working relationship.” Commissioner Nathan Simington was similarly critical of the NPRM: “This is a collateral attack on the Commission’s elimination of the Main Studio Rule, and the item all but says so.”
The FCC unanimously ordered Cumulus to pay a $26,000 penalty for a late annual equal employment opportunity report, over the objections of the broadcaster and the NAB (see 2203300067), said a forfeiture order Tuesday. “Cumulus’s characterization of the requirement to upload an Annual Report to the station online public inspection file and website as a mere administrative task undermines the Commission’s goal of ensuring meaningful public input via public access to the Annual Report,” said the order. The third-largest U.S. radio group, Cumulus reported a Q3 net revenue of more than $200 million. Cumulus had argued that although the report was filed late, it was completed on time and the FCC should have merely admonished the radio broadcaster. The agency rejected that argument, and said failing to upload a completed annual report analyzing EEO activities on time is the same as failing to conduct the analysis altogether. Cumulus also said the FCC shouldn’t adjust the penalty upward due to Cumulus’s multiple past EEO violations, because those occurred before the company’s bankruptcy reorganization. The FCC rejected those arguments, noting that many of the same executives still lead Cumulus. The company hasn’t provided evidence that bankruptcy proceedings are “intended to absolve licensees of the consequences of pre-bankruptcy violations of the FCC’s rules,” the order said. Unusually for an enforcement proceeding, NAB informally filed comments supporting Cumulus, which the FCC dismissed. “NAB offers no legal or procedural basis for submitting its nonparty filing,” the order said. “More broadly, NAB urges the Commission to apply a more balanced and reasonable approach to proposed forfeitures going forward, claims that are more appropriately raised in a petition for declaratory ruling.” The FCC reduced Cumulus’s forfeiture from the originally proposed $32,000, conceding that in the past the agency hasn’t treated late filed EEO reports the same as failing to prepare one. “Although nothing in our case law suggests that such a failure does not also amount to a violation of our self-assessment rule, Cumulus may not have had the requisite notice” of that policy, the order said. “Going forward, Cumulus and all other licensees are on notice” that the FCC will consider the timeliness of posting EEO reports when it considers if stations are meeting their EEO obligations, the order said. The FCC is considering a draft EEO order that would require additional workforce diversity reporting from broadcasters (see 2312220061).
2023 saw the lowest level of investment in the space economy in a decade, Space Capital said Tuesday. The $17.9 billion in private investment for 2023 was down 25% from 2022, it said. The venture capital firm's report said with DOD reworking its approach to space and relying more on commercial space providers, there now is "an inextricable link" between defense spending and commercial space. It said SpaceX's Starship launch rocket, being fully reusable and "ultra-affordable," will dramatically increase launch activity. Blue Origin acquiring United Launch Alliance "would introduce some long-awaited competition" in the launch industry this year, the report said. Declining interest rates are leading to higher equity valuations and better leveraged buy-out math, which could mean increased space industry M&A this year, it said.
The rule requiring covered 988 service providers and originating service providers to report outages that potentially affect the 988 suicide and crisis Lifeline becomes effective Feb. 15, according to a notice for Tuesday's Federal Register. Notifications must go to the FCC network outage reporting system, the Substance Abuse and Mental Health Services Administration, the Department of Veterans Affairs and the 988 Lifeline administrator. The FCC approved a 988 outage reporting order 4-0 in July (see 2307200041).
Southern state lawmakers stressed their concern for kids’ safety as they supported bills Thursday to require age verification for social media and pornography websites. At a Florida House Regulatory Reform Subcommittee, Chair Tyler Sirois (R) defended banning children from social platforms even if their parents would allow it. During a South Carolina House Constitutional Laws Subcommittee hearing, the state's attorney general, Alan Wilson (R), strongly supported blocking kids from porn websites.
Rep. Yvette Clarke, D-N.Y., and Senate Agriculture Rural Development Subcommittee Chairman Peter Welch, D-Vt., led filing Wednesday of the Affordable Connectivity Program Extension Act to give the initiative stopgap funding through the rest of the year, as expected (see 2401090074). The measure would allocate ACP $7 billion for FY 2024, mirroring an earlier draft of the measure Clarke circulated in recent weeks. The FCC estimates the program could exhaust its original $14.2 billion appropriation in April. Congress’ appetite for providing the program more money remains in question given misgivings among top Republicans on the House and Senate Commerce committees (see 2312210074), although several Republicans signed on as ACP Extension Act sponsors at filing: Sen. J.D. Vance (Ohio), Sen. Kevin Cramer (N.D.), Rep. Brian Fitzpatrick (Pa.), and New York Reps. Anthony D’Esposito, Mike Lawler and Marc Molinaro. The measure “provides a transformative opportunity to bridge the gap of the digital divide for communities of color, urban and rural families, and so many more underserved Americans,” Clarke said in a statement. “Access to high-speed internet isn’t a luxury anymore, it’s a necessity,” Welch said. “That’s why it’s never been so important to avoid this funding cliff and extend the ACP.” Welch’s office cited support from more than 400 companies, groups and other entities, including FCC Chairwoman Jessica Rosenworcel and her fellow Democratic Commissioners Anna Gomez and Geoffrey Starks. In addition, several major ISPs and related industry groups are backing the measure: AT&T, Charter, Comcast, Cox Communications, Incompas, NTCA, T-Mobile, USTelecom, Verizon, Wireless Infrastructure Association and WTA. Others supporting the ACP Extension Act: the AFL-CIO, American Civil Liberties Union, Benton Institute for Broadband & Society, Communications Workers of America, Fiber Broadband Association, Free Press, NAACP, Pew Charitable Trusts and Public Knowledge.
Generative AI is expanding Big Tech’s data monopoly and worsening news outlets' financial crisis, Sens. Richard Blumenthal, D-Conn., and Josh Hawley, R-Mo., agreed Wednesday while hearing testimony about The New York Times Co. (NYT) lawsuit against Microsoft and OpenAI.