Protecting the Internet and Consumers Through Congressional Action -- the House Version

The House Commerce Committee’s Communications and Technology Subcommittee held a hearing on Protecting the Internet and Consumers Through Congressional Action. A fun time was had by all. On January 16, 2015, the chairmen of both the House and Senate Commerce Committees released a discussion draft of legislation that would restore, expand, and bolster the Federal Communications Commission’s 2010 network neutrality rules in statute. The draft legislation:

• Applies to both fixed and wireless forms of broadband Internet access service;
• Prohibits blocking lawful content, applications, or services;
• Prohibits blocking of non-harmful devices;
• Prohibits throttling Internet traffic by selectively slowing, speeding, degrading, or enhancing traffic based on the source, destination, or content;
• Bans paid prioritization of traffic, defined as the speeding up or slowing down traffic based on compensation, or lack thereof, from the sender to the ISP; and,
• Retains and codifies the FCC’s current requirement that providers be transparent in disclosing their network management practices, performance, and the commercial terms of its service, in order to allow consumers to make informed decisions about their choice of providers.
• The legislation directs the FCC to enforce these obligations by adopting formal complaint procedures and to interpret and apply them by adjudicating alleged violations.

The authors claim the legislation provides certainty for investment and innovation by:

• Foreclosing future FCC rulemaking to change the bright-line rules for Internet openness;
• Clarifying that nothing in the bill limits the ability of consumers to make decisions about their plans or service;
• Permitting providers to offer specialized services, so long as those services are not offered in a way that threatens availability of broadband Internet access services or attempts to evade the purposes of this legislation; and,
• Restoring congressional intent that Section 706 of the Telecommunications Act of 1996 is not a direct grant of authority, as it was understood before the 2014 Verizon decision.

Finally, the draft proposes to codify broadband Internet access service’s classification as an information service.

The draft legislation appears to have lots of support from GOP Members of Congress. Subcommittee Chairman Greg Walden (R-OR) and full Committee Chairman Fred Upton (R-MI) pointed out that many of the ideas in the draft -- no blocking or discrimination and no paid prioritization -- came from the first FCC Open Internet order proposed by then-Chairman Julius Genachowski, and were things Democrats, including President Barack Obama, had been calling for years. Chairman Walden said it was a solution that would end the legal gymnastics that have tied up the rules in court. He also said he was willing to work with the minority on the language of the draft and that his goal was to provide protections for consumers and certainty for the marketplace.

“The Internet is not a monopoly like the telephone companies were and the utilities were in the 1930s,” said Rep. Joe Barton (R-TX). “It is one of the most vibrant markets in the world. The chairman’s draft is an attempt to keep it that vibrant marketplace.”

Most Democrats on the committee took the opportunity to point out that Republicans appeared to be conceding that there was need for net neutrality rules, but most had major issues with the draft, and none came out in support of it in its current form. The Democrats' problems were primarily with the limits on FCC authority, including restrictions on use of Title II of the Communications Act and Sec. 706 of the Telecommunications Act, and what they saw as loopholes for paid prioritization and discrimination. Rep. Anna Eshoo (D-CA), ranking member of the subcommittee, set the Democratic tone early on with an opening statement that ripped the bill for having an enormous bias against enforcement and did real harm to rural broadband. She branded the draft bill "a march to folly."

Rep. Frank Pallone (D-NJ), the newly-minted ranking member of the full Commerce Commerce, said he would be interested in bipartisan legislation, but indicated that the draft was not the right vehicle in its current state. He said the FCC should proceed with its network neutrality rule vote. The time for the FCC to act is now, he said. He was not the only Democrat to suggest that work on a bill did not have to preempt FCC action. “I don’t want to undermine the FCC authority, I don’t think that will serve to protect consumers. The FCC must continue to serve an important role in the broadband age… It has taken the FCC nearly 13 months to craft rules that respond to the needs of the American public. Congress cannot be expected to work it all out in 13 days.”

The Subcommittee heard testimony from:

Meredith Atwell Baker, the President and CEO of CTIA-The Wireless Association, and a former FCC Commissioner; Chad Dickerson, the CEO of Etsy; Jessica Gonzalez, the Executive Vice President and General Counsel at the National Hispanic Media Coalition; Paul Misener, the Vice President of Global Public Policy at Amazon; National Cable & Telecommunications CEO Michael Powell President, who is also a former FCC Commissioner and Chairman; and Dr. Nicol Turner-Lee, Vice President and Chief Research and Policy Officer at the Minority Media & Telecom Council which seeks to expand minority ownership and equal employment opportunity in the mass media, telecommunications, and broadband industries.

CTIA’s Baker and NCTA’s Powell support the draft legislation, saying congressional action was the only way to provide certainty to Internet service providers so they could continue to expand their networks. Both Powell and Baker warned against the FCC proceeding with efforts to reclassify broadband under Title II. They pledged that their respective associations supported banning paid prioritization. Baker said that if the FCC does apply Title II to mobile broadband, CTIA would sue, and she expected it would win.

"The commission has turned itself in knots for 10 years trying to develop a simple set of open Internet regulations," said Powell. "Congress has the power and the responsibility to end this roller coaster."

There was a great deal of focus on the likelihood of litigation over the FCC’s new rules which it expects to adopt on Feb 26. But there was general agreement at the hearing that, whatever happens, bill or FCC order, it will be challenged in court.

The bill's stripping the FCC of broad Sec. 706 authority was a main sticking point with Democrats on the panel, as well as with some witnesses. They are concerned that the move would prevent the FCC from taking steps to promote rural broadband and other deployment efforts. Amazon’s Misener had plenty of issues with the draft, but praised the principles behind it as "excellent" and suggested the problems were fixable. Turner-Lee supported the draft, but only so long as it included strong enforcement and prevented digital "red-lining." "How can we be sure that this bill anticipates every possible form of discrimination?" said Chad Dickerson, chief executive of Etsy, an online marketplace for handmade and vintage goods.

“The draft forecloses the FCC from exploring the use of Title II authority to address broadband universal service goals, privacy, accessibility for persons with disabilities, interconnection, network reliability, and a number of other important policy goals identified explicitly in the statute,” the National Hispanic Media Coalition’s Gonzalez said. The FCC should also be able to prevent misuse of data caps, she said.