Agenda

The Supreme Court has agreed to give Internet service providers more time to decide whether to appeal a DC Court's ruling upholding the Federal Communications Commission's Title II Open Internet order. The court granted a petition by USTelecom and others to extend the deadline for appeal (filing a writ of certiorari) from July 30 to Sept. 28.

ISPs pointed out that the new FCC might have mooted that appeal by September—if it has voted on a proposal from FCC Chairman Ajit Pai to reverse the Title II classification and review the rules. Seeking the extension in addition to USTelecom were NCTA–The Internet & Television Association, CTIA–The Wireless Association, the American Cable Association, AT&T, CenturyLink, Alamo Broadband, TechFreedom and various individuals including VoIP pioneer Daniel Berninger. The FCC has sought comment on the proposal by the Republican FCC majority under chairman Ajit Pai to reclassify internet access—wired and wireless, fixed and mobile, customer facing and interconnections—as an information service not subject to Title II and to review whether rules against blocking, throttling and paid prioritization are necessary.

Big technology companies and their longtime allies on the grassroots left are at odds over how to deal with network neutrality — and the fight is getting nasty.

The companies, especially large ones, while supportive of the net neutrality rules, have been far more open to a legislative compromise to finally end the net neutrality bickering. Many activists, though, are taking a harder line against any movement from the current regulations. That tension has been simmering for months and is boiling over at a crucial point in the lobbying battle. "The public interest community is more skeptical that you can preserve all the protections you want if you move away from the old legal framework," said Gene Kimmelman, who leads Public Knowledge, which doesn't oppose all legislation but doesn't like past proposals. "And then tech companies are probably looking for some version of net neutrality that preserves that principal regardless of whether it's called Title II or something else."

In what is being billed as a bicameral effort, a group of Republican Sens and Reps—including Senate Judiciary Committee Chairman Chuck Grassley (R-IA), have introduced a bill, the Separation of Powers Restoration Act, that takes aim at the Chevron deference accorded federal agency expertise. “For too long, unelected bureaucrats have relied on Chevron to expand their own authority beyond what Congress ever intended. This has weakened our system of checks and balances and created a recipe for regulatory overreach," said Chairman Grassley of the bill. "The Constitution’s separation of powers makes clear that it is the responsibility of Congress, as the People’s representative, to make the law. And it’s the job of the courts—not the bureaucracy—to interpret the law. This bill helps to reassert those clear lines between the branches. By doing so, it makes the government more accountable to the People and takes a strong step toward reining in the regulators.”

The bill would only tweak the language in the US code on judicial review of agency actions, but it makes a big difference. The issue of Chevron has often come up regarding how the Federal Communications Commission exercises its regulatory authority. Chevron is the deference that has been accorded agencies—per Supreme Court precedent—to interpret vague statutes.

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.

As the repacking of the TV band proceeds after the Incentive Auction, the Federal Communications Commission has issued some guidance as to what comes next for TV stations. Obviously, in the near future, TV stations that agreed to surrender their spectrum in the auction will get notice from the FCC to expect their payments from the proceeds collected from the wireless companies that purchased the repackaged surrendered TV spectrum. For stations that are remaining in operation, who last week were required to file construction permit applications for their repacking to the smaller TV band, and their estimates of the expenses that they will incur in the repacking process, the FCC published an article on its blog, setting out what is next. The article notes that 25 stations will be filing soon in a new window for stations that either cannot construct on the channels that they were assigned by the FCC, or need expanded facilities to replicate their existing coverage. After that window, there will be another window when the remaining repacked stations can file to maximize their facilities on their new channels. Following those two windows, there will be a window for LPTV stations and TV translators who were displaced by the auction to file for new channels.

In advance of July 19's Federal Communications Commission nominations hearing in the Senate Commerce Committee, the Consumer Technology Association was calling for a swift vote for confirmation. And the nominees are: Democrat Jessica Rosenworcel for a return engagement, FCC general counsel Brendan Carr for the open Republican seat, and FCC chairman Ajit Pai—he is being renominated given that his term expired at the end of June. Currently the FCC is down to three commissioners, effectively the minimum to get anything done.

The LEAD Commission wants senators to put a spotlight on E-rate when it puts the spotlight on Federal Communications Commission nominees in a hearing July 19. It wants the members of the Senate Communications Subcommittee to get FCC Chairman Ajit Pai to commit to supporting the E-rate program, which subsidizes high-speed broadband to schools and libraries. The commission was created back in 2012 in response to a challenge from then FCC chairman Julius Genachowski and Department of Education secretary Arne Duncan to help technology "transform" education. “In a technology-driven, and globally competitive economy, connecting our schools and libraries with access to high-speed internet and WiFi is essential to learning and student success,” said LEAD commissioner Jim Coulter. “E-rate has been a critical part of expanding access to basic internet connectivity for students, and we strongly believe that E-rate funding should continue."

[Commentary] The federal E-rate program plays a critical role in allowing Kansas kids to harness the power of technology in schools and libraries. Current Federal Communications Commission Chairman Ajit Pai has voiced support for the program as a commissioner, repeatedly calling it a “program worth fighting for” and saying it has the potential to “help millions of children in America benefit from digital learning.” Of course, we agree with him on those points. However, since then, Chairman Pai has curiously refused to commit to protecting the program; retracted a progress report demonstrating E-rate’s success following its modernization; and expressed a desire to alter funding for the program in a way that would leave countless kids behind.

With Chairman Pai scheduled to testify to the Senate Commerce Committee, Sen Jerry Moran (R-KS) has an important opportunity to stand up for kids in Kansas and throughout the country. School districts like Garden City, which received $492,000 in funding in 2016 to expand access to high speed internet services thanks to E-Rate funding. We respectfully urge Sen Moran to stand up for our nation’s schools on July 19.

[James Steyer is CEO and founder of Commons Sense Kids Action]

After months of delay, the Trump Administration is finalizing plans to revamp the nation's military command for defensive and offensive cyber operations in hopes of intensifying America's ability to wage cyberwar against the Islamic State group and other foes, according to US officials. Under the plans, US Cyber Command would eventually be split off from the intelligence-focused National Security Agency. Details are still being worked out, but officials say they expect a decision and announcement in the coming weeks. The officials weren't authorized to speak publicly on the matter so requested anonymity. The goal, they said, is to give US Cyber Command more autonomy, freeing it from any constraints that stem from working alongside the NSA, which is responsible for monitoring and collecting telephone, internet and other intelligence data from around the world - a responsibility that can sometimes clash with military operations against enemy forces.

Prominent technology-industry leaders and venture capitalists gathered in the White House’s state dining room in June 2017 to discuss tech policy with President Donald Trump in an event that Jared Kushner, the president’s son-in-law and senior adviser, helped organize. Seated at the rectangular table alongside the corporate luminaries, university presidents and senior White House officials was a less-prominent figure: Zachary Bookman, the 37-year-old CEO of a small startup called OpenGov. Kushner’s brother, through a venture-capital firm, is a part owner of OpenGov, according to government disclosures and data from Dow Jones VentureSource. Until earlier this year, Kushner owned stakes in the venture-capital firm that he sold to his brother, according to a person familiar with the matter. Kushner’s connection to OpenGov isn’t widely known. Many senior Trump administration officials hail from the business world, triggering concerns about potential conflicts between their private interests and public duties. The OpenGov situation—in which a top White House official helped organize a prestigious event where one of the participants was financially connected to his family—is an example of how such potential conflicts can play out.