Agenda

[Commentary] Federal Communications Commission Chairman Ajit Pai’s proposal to undo the open internet rules argues that network neutrality has dissuaded internet providers -- like Comcast, Verizon, and AT&T -- from investing in building out and upgrading their networks. Likewise, at the congressional hearing, Chairman Pai said that a convincing argument that investment in internet infrastructure actually was on the rise could persuade him to stop trying to roll back net neutrality protections. The problem with this argument, though, is that according to the internet providers themselves, investment in their networks actually has gone up since the net neutrality rules were passed. Chairman Pai’s claims that internet providers aren’t investing in their networks is misleading, at best, and potentially ruinous for the future of a vibrant internet if his proposal to gut net neutrality rolls through unchallenged without a big public fight. And the scary thing is that in the current political climate, with so many major changes underway all at once, net neutrality may become a casualty.

After House Commerce Committee Chairman Greg Walden (R-OR) announce that he had invited the CEOs of both Internet-based companies and broadband internet access service providers to a September hearing on network neutrality, the committee’s Democratic leadership wrote to him saying, “In your announcement of the hearing, you said the Chief Executive Officers from eight of the largest corporations in the world with a combined market capitalization of nearly $2.5 trillion had been invited to testify. Although you stated the hearing was an inquiry into the ‘internet ecosystem,’ you once again failed to recognize how important the internet is for consumers, small businesses, entrepreneurs, political organizers, public interest groups, and people looking for work. We therefore ask that you make sure that any hearing has sufficient witnesses to represent the diversity of real people who will be affected by the FCC’s efforts to roll back net neutrality,”

A coming Congressional hearing on network neutrality has left the likes of Amazon, Facebook, Google and Netflix in a tough position: They can either subject their chief executives to a potential grilling — or sit it out and take plenty of political heat.

If they sit out the hearing, they might send a poor political signal — to supporters and opponents alike — at a time when the Trump administration is preparing to scrap the US government’s current net neutrality rules. For the moment, tech giants don’t have much to say about their plans. Amazon, Facebook, Google and Netflix declined to say if they would dispatch their chief executives to Congress. They have until July 31 to contact the committee about their participation. Republican lawmakers, meanwhile, haven’t yet heard from those companies, either. But the House Commerce Committee did offer an early warning: “It is our expectation that the invited individuals will attend. These CEOs are in a unique position to provide important perspectives on issues they have long been publicly vocal on,” said a spokesman for House Commerce Committee Chairman Greg Walden (R-OR).

Tech giants that decline to attend the hearing — or try to send a lower-level executive — could incur the wrath of federal lawmakers, who are known to blast companies that don’t testify. Then again, appearing before Congress could subject the likes of Amazon’s Bezos or Netflix’s Hastings to tough, unwelcome questions — on issues that might not have to do with net neutrality at all.

Today’s topic – Next Generation 5G Wireless Networks: Seizing the Opportunities and Overcoming the Obstacles – is one of great importance. Countries across the globe are vying to shape the next generation of mobile technologies and grab their slice of the economic bounty. There is no time to sit on the sidelines when everyone, including the standard bodies, have expedited their work to enable deployments as early as 2019. So, how do we “seize the opportunity” that future wireless technologies provide and remain the global leader in wireless, while overcoming the many obstacles – or challenges – that lie in the way?

The House Commerce Committee’s Communications and Technology Subcommittee held a hearing on July 25, 2017. Lawmakers came to talk Federal Communications Commission oversight; they came to talk FCC oversight; but as with most telecommunications policy discussions these days, network neutrality grabbed the headlines.

Full Committee Chairman Greg Walden (R-OR) announced that he will hold a hearing on September 7 entitled “Ground Rules for the Internet Ecosystem.” He sent invitations to CEOs of leading tech companies -- including Facebook, Alphabet, Amazon, and Netflix -- and broadband providers -- including Comcast, Verizon, AT&T, and Charter Communications -- requesting they testify.

“A strong consensus is forming across party lines and across industries that it’s time for Congress to call a halt on the back-and-forth and set clear net neutrality ground rules for the internet,” said Chairman Walden. “In some form or another, we have been working for at least 20 years on the intertwined goals of incentivizing the huge investments needed to connect Americans, while keeping the internet open and protecting consumer privacy. With almost everyone in agreement about fundamental principles to prevent anti-competitive behavior such as throttling and blocking, I think we are closer than ever to achieving a lasting resolution. The time has come to get everyone to the table and get this figured out.”

In a letter requesting their appearance, Chairman Walden said the open internet rules put in place during the Obama administration — which subject broadband providers to utility-like regulation — “disrupted the longstanding regulatory balance that for years allowed the internet to grow and thrive.” He added, “With your help, I know we can craft a fair, predictable and sustainable solution that not only benefits edge providers and internet service providers, but also the billions of consumers worldwide that deserve a free and open internet.”

Chairman Walden is joined by his counterpart in the Senate, Commerce Committee Chairman John Thune, in a desire to adopt legislation that will end the net neutrality debate.

But these lawmakers so far have offered few specifics, and for the moment, they don’t have much Democratic support. Many in that party have rallied to save the FCC’s existing rules, preferring the Obama administration’s approach. Sen Cory Booker (D-NJ), for example, fears that any attempt to tackle net neutrality with Republicans in charge of the White House and Congress will result in rules that are too weak — and give broadband internet access service providers too much power to tamper with internet traffic.

In her opening remarks at the hearing, Subcommittee Chairman Marsha Blackburn (R-TN) bristled at the suggestion that Republicans are opposed to network neutrality. "Let me be clear. Republicans have always supported a free and open internet." We are trying to "restore the culture of humility lacking under the regulatory cloud left” by former-FCC Chairman Tom Wheeler. She said it was time to move past partisan rhetoric and pass legislation clarifying net neutrality oversight. Subcommittee Vice Chairman Rep. Leonard Lance (R-NJ) agreed and said there was common ground on the need for net neutrality and added that a light-touch approach has strong support.

Subcommittee Ranking Member Mike Doyle (D-PA) pointed to the over 12 million net neutrality comments in the FCC's public file as evidence that there was nothing wrong with the FCC's current net neutrality rules. He said the rules are working and to roll them back would hurt small business and "regular people." Rep Anna Eshoo (D-CA) agreed and said the FCC is barreling down the road toward eliminating critical protections and making it clear that start-ups and small business input is not as valued as special interests. “If the FCC moves ahead with its net neutrality plan the consequences will be severe,” said Rep. Frank Pallone (D-NJ), the ranking member of the full House Commerce Committee. “Their plan will have a chilling influence on our democracy, cut away at our connections with each other, and limit economic opportunities for the future.”

Morning Consult reports that the key takeaway from the hearing is that Democratic and Republican members of Congress both support net neutrality — they just have different definitions for the term.

Chairman Walden asked all the FCC commissioners if they support net neutrality. Chairman Pai said he favors “a free and open internet.” But Rep. Anna Eshoo (D-CA) took issue, telling him that his chairmanship “rests on the altar of dismantling net neutrality as we know it.”

“With all due respect to you, I don’t think it’s a credible statement to say that you support it,” she added.

FCC Commissioner Mignon Clyburn said that maintaining classification of broadband services under Title II of the Communications Act will ensure competition and drive greater service availability. “Taking away Title II for broadband undercuts our ability to ensure universal service for broadband by taking away our clearest source of authority to make sure all Americans are connected,” Commissioner Clyburn said. “Undoing our classification of broadband as a Title II service also harms the FCC’s ability to enable competition. There is specific authority in sections 224 and 253 of the Communications Act that allows the FCC to enable competitive access to monopoly infrastructure, and to remove other barriers to competition. Without Title II, it will be far more difficult for the Commission to enact policies to enable competition.” Commissioner Clyburn also pointed to how Title II helps to ensure privacy.

“We adopted rules of the road for broadband privacy last October and they were stripped away earlier this year with the passage of the Congressional Review Act (CRA) resolution of disapproval which means today, there are no comprehensive rules on the books protecting broadband consumer privacy for Americans,” Commissioner Clyburn said.

But FCC Commissioner Michael O'Rielly said “the term net neutrality means so many different things these days than it once did.”

GOP lawmakers presented themselves as advocates of the concept of net neutrality, while simultaneously targeting the 2015 Open Internet Order which reclassified broadband Internet access service as a Title II service. Chairman Blackburn, for example was drawing a distinction between supporting a rollback of the net neutrality protections and the idea that such a move would limit internet access for users, saying that “Republicans have always supported a free and open internet.” Republicans say net neutrality limits investment and growth of internet service providers, while advocates say a rollback of the Obama-era regulation would allow ISPs to throttle, block or slow connectivity. Their argument echoed one that has been used by ISPs like Comcast and Verizon.

“Everybody says they’re for an open internet,” said Rep. Peter Welch (D-VT). “The question I have is: Why change the existing regime where everyone agrees that there is an open internet?”

Past network neutrality, the hearing considered a discussion draft reflecting, among other things, the Commerce Committee’s ongoing efforts to improve the FCC’s process and transparency. Here’s some quick notes:

1. Chairman Pallone questioned Chairman Pai about decisions that have favored Sinclair Broadcast Group. He asked if the Trump Administration has tried to influence these actions. Chairman Pai answered that the White House has not contacted him about the proposed merger of Sinclair and Tribune or the FCC's decision to restore the UHF discount, which helped pave the way for that deal.
2. Commissioner Clyburn criticized FCC Chairman Ajit’s Pai decision to allow Sinclair to purchase of Bonten's seven stations. She told the subcommittee that she was kept in the dark about the bureau-level decision, which, she suggested, was hardly in keeping with Chairman Pai's promise for more transparency.
3. Chairman Pai warned the subcommittee that unless Congress authorizes more money, broadcasters will have to pay some portion of their post-incentive auction repack expenses. FCC Commissioner Michael O’Rielly testified that it may be a little early to declare the $1.75 billion post-auction repack fund insufficient.
4. Chairman Pai said that if the facts warrant and the law allows it, the FCC will be aggressive about freeing up TV band white spaces for rural broadband.

Republican Reps, who have been trying to excise the media cross-ownership ban from the Federal Communications Commission's regulatory playbook, are making that part of the draft legislation reauthorizing the FCC, according to a GOP staff memo for July 25's FCC oversight hearing. Last December, committee chairman Greg Walden (R-OR) and Rep John Yarmuth (D-KY) introduced a bill to repeal the ban, which applies to daily newspapers and broadcast outlets, which the pair called "disco-era" regulations.

The FCC under chairman Tom Wheeler declined to scrap the ban in the most recent quadrennial ownership rule review, despite suggestions on both sides of the political spectrum that it had outlived its usefulness. The rule dates from 1975 and prevents TV and radio stations from owning a daily newspaper in the same market. The FCC in 2003 under then-chairman Michael Powell found the rule no longer in the public interest, but that decision was challenged in court and has remained on the books.

The reauthorization draft, in addition to eliminating the ban, includes process reforms like making public items circulated for a commission vote, something FCC Chairman Ajit Pai has been doing, but which could change under a new chairman unless it were codified. It would also mandate cost-benefit analysis for proposed rules with potentially significant economic impact. It would allow the FCC more flexibility in assessing regulatory fees—the FCC is self-supporting, paying for its ongoing operations through fees on regulated entities. It also raises the status and profile of the chief information officer and FCC inspector general.

The groups behind the July 12 internet Day of Action have launched "Team Internet," the next phase of their protest against the proposed reversal of the Federal Communications Commission's common carrier (Title II) classification of internet access. Taking a page from the "distributed organization" model of Bernie Sanders' presidential campaign, the groups say that next phase will include speaking out at meetings and town halls and pressing local officeholders. The Day of Action was targeted to Washington—both the FCC and Congress—and that remains the focus, but through coordinated self-organizing that enlists "neighbors, colleagues, family and friends," to expand their protest footprint.Coordinating Team Internet is the pro-Title II team of Demand Progress, Fight for the Future and Free Press Action Fund. They are looking to tap into what they say was the nearly half a million participants in the Day of Action.

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.