Republicans Counter FCC With Net Neutrality Bill
Cable, wireless groups voice support for GOP’s net neutrality bill.
But the small city received a big boost to its national profile last week when President Barack Obama traveled there to unveil a new broadband policy initiative aimed at spurring high-speed infrastructure investment across the United States. Congress held two hearings Wednesday to discuss net neutrality legislation, which supporters hope will preserve internet freedom while avoiding burdensome regulations.President Obama called on the Federal Communications Commission to implement a strict policy of net neutrality and to oppose content providers in restricting bandwidth to customers.
A day after President Obama renewed his calls for a “free and open Internet” in Tuesday’s State of the Union Address, the new Republican-led Congress is set to open debate Wednesday for new legislation meant to preserve the controversial principle known as “net neutrality.” At issue is how the Internet should be regulated. At the hearings, lawmakers from the House Energy and Commerce Committee and the Senate Committee on Commerce, Science, and Transportation solicited testimony from experts in the internet and telecommunications industries about the bill, which can still be revised before assuming its final form. Should Internet providers like Comcast and Verizon be allowed to make “fast lanes” for content they want to prioritize, or should the government step in to ensure that providers treat all web content the same?
Among them was a nod to the role the Internet plays in economic development. “I intend to protect a free and open Internet, extend its reach to every classroom, and every community, and help folks build the fastest networks,” Obama said. It’s able to do this thanks to Cedar Falls Utilities, a municipally owned network that offers residents high-speed Internet access, which the president highlighted as an important option to help close the digital divide in America. Although net neutrality has broad popular support in principle, there has been considerable debate over how it should be accomplished, with some advocating for government regulations while others are pushing for a more limited approach. (RELATED: Who Pays for Net Neutrality?) Wednesday’s hearings, not coincidentally, came just over a month ahead of a planned vote by the FCC on whether to classify the Internet under Title II of the Communications Act, just like landline telephones, which critics say could open the door to price controls and other regulations that inhibit innovation. The commission is considering applying Title II to protect new rules against an anticipated lawsuit from a telecom like Verizon, said FCC Chairman Tom Wheeler. But a “discussion draft” of a bill floated by Republicans in Congress last week suggests that they are adjusting their stance – though critics say the move could ultimately do more harm than good.
Those few words hint at several looming clashes between the White House and the big phone and cable companies that provide broadband to most Americans. Republicans supported the lawsuit by Verizon Communications that successfully struck down the previous net neutrality rules last year on the grounds that the FCC did not have legal authority to enforce them. Public support has pressured Republicans to embrace some of the core issues of the commission’s new proposed rules, including forbidding Internet service providers from slowing rival websites and charging for priority traffic speeds. Meredith Attwell Baker, president and CEO of industry trade group The Wireless Association, told lawmakers she supports the bill, saying it gives Congress “the opportunity to provide the same regulatory stability for broadband as it did for all of mobility in 1993,” when it established a regulatory approach to mobile devices that protected consumers while promoting cost-cutting and innovation. “The draft bill is an excellent start,” she declared. “And offers a reasonable path toward ensuring the preservation of an open Internet with real, enforceable requirements.” Conversely, Jessica Gonzalez of the National Hispanic Media Coalition argued that, “the discussion draft suffers from a number of fatal flaws that could permanently debilitate the FCC and lead to disastrous unintended consequences.” According to Gonzalez, the bill in its current form “blesses some forms of discrimination and strips the FCC of authority that could be used to achieve shared policy goals,” such as universal service and rural access. Previously, many Republicans had called such net neutrality regulations “Obamacare for the Internet,” saying they were the invasion of big government onto the web (though such regulations had been in place from the Internet’s start).
Now the FCC appears ready to put rules in place under a different section of the law that would treat broadband providers like regulated phone companies and other utilities. The liberal activist group Demand Progress calls it a “cynical ploy,” adding in an email that “in a town used to policy flip flops, this is a pirouette of Olympic caliber.” Today both houses of the new Republican Congress are holding hearings meant to lay the groundwork for a bipartisan network neutrality deal. But although some form of Internet access is practically ubiquitous today, more than 50 million Americans aren’t online, and for many it’s because they still can’t get affordable next-generation broadband service. Moreover, she asserted, the legislation is not necessary because “Rules based on Title II authority, with appropriate forbearance, will not impede investment, create new taxes, slow broadband adoption, or create additional litigation risk.” Former FCC Commissioner Robert McDowell, however, argued that the “sledge hammer of Title II” is not conducive to a policy of forbearance, and would “eventually cause collateral damage to America’s tech economy” regardless of regulators’ intentions.
Even if regulations could be applied flawlessly at the federal level, he explained, “Title II regulation of the Net could trigger state and local regulations, taxes, and fees” that could cost customers up to $15 billion a year. (RELATED: The Consumer Costs of Net Neutrality) In addition, forbearance would require the FCC to select “just a few” of Title II’s “approximately 1,000 heavy-handed requirements,” making its orders “impossible to defend in court” because they will appear “arbitrary and politically driven to appellate judges.” “The tragedy of this debate,” McDowell said, “is that no one … has ever contested the goals of keeping the Internet open,” but nonetheless, “the fight has devolved into a question of how overreaching and heavy-handed the FCC would be in pursuing its ostensible goals.” Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. Republicans were left in the position of defending an industry that routinely ranks last in national consumer-satisfaction surveys. “By turning the FCC away from a heavy-handed and messy approach to regulating the Internet, this draft protects both consumers who rely on Internet services and innovators who create jobs,” said Sen. A big part of the problem is competition: Most Americans live in areas where only a single provider offers truly high-speed connectivity (more than 25 megabits per second), and it often comes with a steep price tag. Network neutrality advocates worry that if ISPs start giving higher priority to content from big companies that pay them extra, startups and other small content providers could get squeezed out.
Broadband providers have warned that such a step risks burdening them with cumbersome regulation, stifling their investment in Internet upgrades, and some firms have already suggested that they would challenge the FCC in court. Paul Misener, Amazon’s vice president of global public policy, said the bill had some potential loopholes, such as an exemption for “specialized services,” that broadband providers could exploit to allow paid prioritization and other discriminatory behavior “The Internet is dynamic. Last May, Upton was describing network neutrality rules as a “solution in search of a problem.” Network neutrality supporters believe that in order to fully protect network neutrality, the FCC needs to declare broadband providers to be common carriers, an option known as reclassification.
Greg Walden (R-Ore.) called such an FCC action the “nuclear option.” The GOP bill also would prevent the FCC from taking actions based on a provision of the 1996 Telecommunications Act that charged the agency with promoting adoption of broadband services. It’s a ‘trust us’ bill. ‘Hey, trust Comcast, because of course they have your best interests at stake.’ ” More significantly, perhaps, the bill would make broadband an “information service” rather than a “telecommunications service.” The distinction is crucial.
The Commerce Department is launching a new initiative called BroadbandUSA, offering technical assistance to communities (both online and in-person), hosting regional workshops, and creating tools to help cities plan, finance, build, and operate their own networks. Others expressed concerns that the legislation, although banning such things as paid prioritization will still leave Internet providers with the ability to create a two-tiered Internet. Meanwhile, the Department of Agriculture will help rural providers finance networks through both grant and loan programs geared specifically toward rural areas that are falling behind.
Walden is also the chairman of the House Subcommittee on Communications and Technology, which held a hearing Wednesday on its own plan to protect the open Internet. John Shimkus (R-Ill.), who called himself a “paid prioritization” guy in favor of light regulation — said that he has come around to recognize that government action is a reality. They say their proposal would, among other things, prevent broadband providers from charging Internet companies more for special fast lanes. “Esty is a low-margin business,” Dickerson said. “We couldn’t afford to pay for priority access to consumers, yet we know that delays of even milliseconds have a direct and long-term impact on revenue.” “What is abundantly clear in the majority’s proposal is to purposely tie the hands of the FCC by prohibiting them from reclassifying broadband,” said Rep. Ryan Radia, a network neutrality skeptic at the libertarian Competitive Enterprise Institute, readily concedes that the GOP’s changing stance is “kind of a flip-flop,” but he says the shift is justified. At least 19 states currently have laws on the books that make it more difficult to build local broadband networks, ranging from outright prohibitions to onerous requirements that can discourage cities from pursuing a project.
So they’ve exerted their influence in state legislatures across the country to make building locally owned networks more difficult—often to the chagrin of local leaders who recognize the importance of bringing high-speed access to their communities. And now Obama’s opinion is on the record, too: He asked the director of the Commerce Department’s National Telecommunications and Information Administration to send a letter to the FCC last week explaining the administration’s official view.
And as municipal broadband policy has become an increasingly political issue in Washington, D.C., it remains to be seen how Congress might respond if the FCC decides to act. For example, Bergmayer worries that ISPs might harm competition by charging consumers different rates for different types of content — for example, charging customers extra fees when they download content from Netflix rather than Hulu. But under the Republican alternative, an aggrieved party would have to bring a complaint before the FCC, a process that could take years and might not provide protections to others harmed by the same ISP conduct. They note that the law includes several vague terms that could create loopholes for undermining network neutrality and gives the FCC limited authority to close these loopholes.
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