Independence, Net Neutrality, and E-rate are Thorny Issues at FCC Confirmation Hearing

On July 19, 2017, the Senate Commerce Committee held a hearing to examine the nominations of Ajit Pai, Jessica Rosenworcel, and Brendan Carr for seats on the Federal Communications Commission.

On March 7, President Donald Trump nominated Pai, the FCC’s current chairman, for a second five-year term ending June 30, 2021. Rosenworcel is nominated for a term that would end June 30, 2020. Carr, the current general counsel at the FCC, has actually been nominated for two terms, one expiring June 30, 2018 and the second ending June 30, 2023. Carr served as legal adviser to then-FCC Commissioner Pai for three years before Pai was named chairman and appointed Carr as general counsel.

Committee Chairman John Thune (R-SD) characterized the hearing as both an examination of the nominees and a FCC oversight hearing, “fulfilling a commitment I’ve made to hold regular, biannual oversight hearings of the Commission.” His opinions of the nominees: “In my view, the FCC will be in very good hands when all three of these nominees are confirmed.” He noted Chairman Pai’s efforts around transparency and FCC processes, network neutrality, and robocall prevention.

Sen Bill Nelson (D-FL), the committee’s ranking member, raised issues around all three nominations. Concerning Rosenworcel, he noted that she should not have been forced to step down from the FCC at the end of 2016 when the Senate failed to reconfirm her.

Sen. Nelson identified two concerns about Brendon Carr: 1) “two consecutive terms to which the Senate is being asked to confirm you would provide you with the longest single, initial period of service of any nominee to the FCC” and 2) “it is hard to recall a similar situation where someone was nominated to serve at the commission alongside, rather than to follow, their current boss.” He stressed that it is important to have commissioners who have independent voices and “ones who will fight for consumers and the public interest.” He later asked Carr to cite an issue that he and Chairman Pai disagree on – Carr failed to answer on more than one occasion. “Going forward, I’ll make my own decisions; I’ll call it the way I see it,” Carr said. “I think my record shows that I’m not a shrinking violet.” Sen. Nelson called that response “not confidence-building.”

Finally, Sen. Nelson congratulated Chairman Pai on some recent pro-consumer actions, but said, “[M]any view these most recent consumer protection actions as mere icing on what is otherwise an unpalatable cake. A cake constructed out of actions that eliminate competitive protections, that threaten dangerous industry consolidation, that make the Internet less free and less open, and that weaken critical consumer protections for those most vulnerable.”

Net Neutrality

Network neutrality and the FCC’s 2015 decision to classify broadband internet access service providers as telecommunications providers under Title II of the Communications Act were key issues for the hearing. In his opening remarks, Chairman Thune said,

“I am pleased that Chairman Pai has sought to hit the reset button on the 2015 Title II Order, because, as I have previously said, the FCC should do what is necessary to rebalance the agency’s regulatory posture under current law. I continue to believe, however, that the best way to provide long-term protections for the Internet is for Congress to pass bipartisan legislation. Two and a half years ago I put forward legislative principles and a draft bill to begin the conversation, and I stand ready and willing today to work toward finding a lasting legislative solution that will resolve the dispute over net neutrality once and for all.”

Two senators questioned the nominees about the impact of the Title II decision on broadband investment in the US. Sen. Mike Lee (R-UT) cited stats, offered by broadband providers, that investment has gone down. He took issue with a New York Times story that said investment had gone up since the 2015 order. He said that increase included foreign investment, some of which he said was spurred by the Title II disincentive to invest in the US, and that there was evidence that US infrastructure investment had declined precipitously.

On the other side was Sen. Ed Markey (D-MA) who said that almost half of the venture capital funds, or about $25 billion, invested since 2015 was in Internet-related businesses, with broadband providers investing $87 billion, the highest rate in a decade. Sen Markey said investment and job creation are high, so there is no problem that rolling back Title II or reviewing net neutrality rules would fix.

Both senators asked Chairman Pai for his take on their respective views, but the chairman's answer was cautious given that he has an open proceeding before him and comments on his proposal to roll back Title II and review the rules are still coming in. He said that evidence of decreased investment was one of his concerns, but that the FCC was testing that theory, as well as the opposite, as part of its due diligence.

E-Rate

While Rosenworcel, Carr and Chairman Pai all generally agreed on the importance of the FCC's E-rate program -- which makes broadband services more affordable for schools and libraries -- they initially refrained from an outright promise not to cut its funding. Sen. Ed Markey (D-Mass.) had to ask Rosenworcel a second time before she explicitly said she would not reduce the funding for E-rate. Neither Pai nor Carr would make that commitment.

Broadband Deployment

The three nominees were largely unanimous on measures to expedite rural broadband like “dig once” policies, which require installation of conduits for fiber-optic cable when preparing infrastructure such as roads. The policies aim to reduce cost and limit wait times for installing fiber in different municipalities.

“I think it would be helpful for ‘dig once’ policies and similar policies to be the law of the land,” Chairman Pai told Sen. Amy Klobuchar (D-MN).

“The agency, working with local jurisdictions, should try to come up with a model code — one that includes policies like ‘dig once,’” Rosenworcel said. She added that there should be incentives built in for local communities to adopt the model.

Senators also pressed the three on the need for accurate coverage maps so that subsidies issued to companies to build out their infrastructure are actually targeted to the right places.

“I would hope to get your commitment that the commission will work to ensure that mapping data used at the FCC accurately accounts for on-the-ground mobile coverage,” said Sen. Cory Gardner (R-CO). The nominees affirmed they are committed to working toward ensuring accurate data coverage moving forward.

First Amendment

Sen. Tom Udall (D-NM) pressed all of the nominees on their commitment to the First Amendment in light of the many statements President Trump has made disparaging outlets covering his Administration. Sen. Udall pointed to a story that the White House could use AT&T’s proposed acquisition of Time Warner as a way to punish CNN for its stories and suggested the Administration might want to reward Sinclair by approving Sinclair’s purchase of Tribune television stations. Each of the nominees pledged to speak out against violence or intimidation against journalists. Chairman Pai reiterated that the White House had not contacted him about retaliating against negative news stories and said he would not do so if asked. And he promised that the FCC would not be used to punish media companies or reward others and would be troubled by any attempt to pressure it to do so.

"I have not directly had any conversations with anyone in the administration with respect to media regulatory proceedings," Chairman Pai said. "To the best of my knowledge, no one on my staff or in the FCC has indirectly had any such conversations as well."

“I have consistently stated that I believe … that First Amendment freedoms, including the freedom of the press, are critical,” Pai added. “If I were ever asked by anyone in the administration to take retaliatory action, for instance, in a media regulatory proceeding, I would not do so.”

Conclusion

If all of the hearing’s nominees are confirmed by the full Senate, the FCC would have a 3-2 Republican majority. Senators on the committee have until July 21 to submit additional questions for the nominees who will be given time to reply in writing.