Protecting the Internet and Consumers Through Congressional Action – The Senate Version

On January 21, 2015, the Senate Commerce Committee held a hearing, Protecting the Internet and Consumers Through Congressional Action, featuring non-government witnesses testifying about current authorities of the Federal Communications Commission and Congress’ options to update the nation’s communications laws for the Internet Age. The Senate hearing followed just after a House hearing on the same subject of network neutrality earlier in the day.

Committee Chairman John Thune (R-SD) said in his opening statement, “Instead of using outdated regulations, I believe the most enduring way to protect both the Internet and individual Internet users is through legislation that establishes clear rules of the digital road as well as clear limits on the FCC’s regulatory authority.” Thune and House Commerce Committee Chairman Fred Upton (R-MI) recently circulated draft legislation based on 11 principles:

1. Prohibit blocking
2. Prohibit throttling
3. Prohibit paid prioritization
4. Require transparency
5. Apply rules to both wireline and wireless
6. Allow for reasonable network management
7. Allow for specialized services
8. Protect consumer choice
9. Classify broadband Internet access as an information service under the Communications Act
10. Clarify that Section 706 of the Telecommunications Act may not be used as a grant of regulatory authority
11. Direct the FCC to enforce and abide by these principles

“I am willing to discuss how the eleven principles will be implemented, and I am eager to get to work with my colleagues, many of whom I have already spoken with. But I also want to be clear that I will not compromise these principles, particularly if doing so would leave the FCC’s authority unbounded or would leave open the possibility for harmful regulatory burdens being leveled on the Internet,” Chairman Thune said.

The bottom line, apparently, for Chairman Thune is that the issue has for too long been at the FCC. “Congress needs to reassert its responsibility to make policy, and let the FCC do what it does best – enforce clear statutory rules.”

Sen Bill Nelson (D-FL), the Committee’s Ranking Member, highlighted his main concerns:

• Protecting consumers’ interests because theirs is the lens through which we must see any proposal on net neutrality.
• Any proposal that could strip away the FCC’s tools to enforce essential consumer protections for broadband service.

“For over 80 years,” Sen Nelson said, “Congress has tasked the FCC with preventing unjust practices, stopping unreasonable discrimination, protecting competition, and promoting the public interest. These are not mere abstract ideals. Without this flexible authority, the FCC could not have successfully extended universal service funding to broadband or ensure the privacy of sensitive consumer information. These laws and principles have made the U.S. telecommunications market the envy of the world – and they should not be discarded.”

Sen Nelson said he saw no hurry for Congress to pass legislation before the FCC is expected to adopt new network neutrality rules on February 26. “It is more important to get it right than get it done right now,” he said.

Although the GOP controls both houses of Congress and could pass legislation along party lines, bipartisan support would help weaken the threat of President Barack Obama's veto. The President endorsed regulating ISPs under a section of communications law known as Title II, which would treat them more like public utilities. ISPs say the regulatory burden of that approach would increase costs and stifle investments.

Witnesses at the hearing were:

• CTIA-The Wireless Association President and CEO Meredith Attwell Baker;
• Public Knowledge President and CEO Gene Kimmelman;
• the aforementioned Robert McDowell who is a Senior Fellow at the Hudson Institute and partner at Wiley Rein LLP;
• Paul Misener, the Vice President of Global Public Policy at Amazon;
• Tom Simmons, the Senior Vice President of Public Policy at Midcontinent Communications; and
• Dr. Nicol Turner-Lee, the Vice President & Chief Research and Policy Officer at the Minority Media & Telecommunications Council.

Public Knowledge’s Kimmelman advocated for using Title II to regulate broadband access and said Congress should stick to what it does best, which is establish principles and goals, and delegate the details to the FCC, the expert agency. Former FCC commissioner Rob McDowell, no fan of Title II, said one of the issues was that folks like Kimmelman were asking for more of those common carrier regulations to be in the FCC's toolkit, regulations he said were from a bygone era when a phone had to be held with two hands. McDowell said that FCC reclassification under Title II would drag the whole tech sector under the FCC's purview. And an effort to forbear all but a few of those regulations would likely be thrown out by the court because it would look arbitrary and capricious, as though the FCC were trying to pick political friends. McDowell also pointed out that under Title II, the FTC would lose some oversight authority due to the common carrier exemption.

If there was anything all could agree upon after the long day of hearings, it is that Republican Members of Congress cannot count on Democratic support for the draft legislation – at least not as written.

Sen. Ed Markey (D-MA) put an exclamation point on the Democratic issues with the draft and its preemption of Title II. He suggested that taking away that Title II authority and Sec. 706 authority would leave the FCC unable to expand the Universal Service Fund to broadband, or protect privacy, or accessibility to the disabled. He said that network neutrality was just a fancy word for nondiscrimination, the same kind of nondiscrimination that, in the context of the Civil Rights Act, meant people could sit at lunch counters of their choice. It is about access, he argued. It is about anyone being able to get in, and compete, he said. That included access to capital. While former-FCC Commissioner Robert McDowell, a witness at the Senate hearing, talked about the impact of Title II on investment, Sen Markey said the key investments, those by the future Googles and YouTubes, wanted Title II, because that signaled to investors that there would be an Internet open to access and innovation. He pointed out that 62% of venture capital in 2013 went to tech and net companies, “the Etsys of the world,” that wanted Title II.

Sen. Dean Heller (R-NV) said it looked to him like about 70% of the draft was what the other side wanted, and did not seem to understand the Democrat opposition. But he did say he wanted to work with the minority and come up with some kind of bill.