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Rock and Hard Place

GOP Still Seeking ISP Support for Net Neutrality Reversal

Big ISPs are reluctant to help House Republicans scrambling to find industry support for overturning FCC net neutrality rules with legislation, said telecom industry officials. The House Communications Subcommittee on Thursday said it will have a legislative hearing Wednesday next week, but it remains unclear who will agree to testify. Republicans attempted to rally industry lobbyists in a closed-door meeting Wednesday (CD March 3 p1).

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Industry may feel it’s too risky to support Republicans’ effort to overturn net neutrality rules, said a wireline industry official. Battling in court provides a more defined path where politics don’t come into play in determining the victor, the official said. Most of the industry is in a difficult place and won’t want to publicly say good or bad things about the FCC order, the official said. They don’t want to attack the FCC because at the end of the day Julius Genachowski will still be the chairman, but they can’t support the order since they have long been calling net neutrality a job killer.

That leaves the House GOP in a bind, Free State Foundation President Randolph May said. “Other than the obvious candidates, Verizon and MetroPCS, I am not sure who from industry would testify,” he said. Industry is now paying for its deal with Genachowski last December, May said. “At the end of the day, when it looked like Chairman Genachowski had decided to move forward to impose net neutrality with a partisan three person majority, I think certain Internet providers decided to cut the best deal they could with the Chairman. Their acquiescence was ‘voluntary’ in the same sense that they offer up ‘voluntary’ concessions at the end of the day to get a merger deal done after months of agency delay."

But ISPs were in a tight spot, Telecommunications Industry Association Vice President Danielle Coffey said. “I think that people at the time were picking the lesser of evils,” she said. “They were doing the best with the situation that was before them.” The GOP’s other problem is that net neutrality is a bit narrow of an issue for a telecom industry that desperately needs clarity on the FCC’s authority. Matters like Universal Service Fund reform and data roaming -- both of which TIA supports -- “hinge on the FCC’s jurisdiction over broadband issues,” Coffey said. “It’s an incredibly important discussion for us to have, but it’s one that has to happen holistically,” Coffey said.

The subcommittee hasn’t revealed witnesses for its hearing, which will specifically discuss Republicans’ resolution of disapproval, under the Congressional Review Act, to reverse the FCC’s net neutrality order. The hearing starts at 10:30 a.m. in Room 2123, Rayburn House Office Building.

Large industry players so far have avoided weighing in on the GOP effort to overturn the rules. Last month’s House Judiciary Committee hearing included witnesses from public interest groups and one small, rural ISP. The Commerce Committee’s net neutrality hearing the next day had the five FCC commissioners as witnesses. Large industry players were silent when the House passed a budget amendment to stop the FCC from acting on net neutrality.

Multiple lobbying officials told us that Republican leadership launched this week’s push to repeal net neutrality rules without talking to Commerce Committee Chairman Fred Upton, R-Mich., and Communications Subcommittee Chairman Greg Walden, R-Ore., first. On Sunday, Speaker John Boehner, R-Ohio, delivered a speech in Memphis -- his first speech outside of Washington since he became House leader -- and spent several lines taking aim at FCC Chairman Julius Genachowski and net neutrality, promising to mark up Congressional Review Act legislation “this week.” By Tuesday, only a handful of lawmakers had signed on as cosponsors.

An angry Majority Whip Kevin McCarthy, R-Calif., called industry lobbyists to his office for a closed-door meeting on Wednesday. It was only then that McCarthy realized that broadband companies were divided on the question of net neutrality, lobbying officials familiar with Wednesday’s meeting told us. McCarthy asked the lobbyists if they were going to testify at next week’s hearing. He got no response, the lobbyists told us. McCarthy also asked AT&T Executive Vice President Tim McKone and NCTA President Kyle McSlarrow why their organizations had signed off on Genachowski’s order last December. McSlarrow said his group had no choice because cable companies were even more worried about Title II reclassification than the Title I compromise Genachowski was offering, the lobbying officials said. McCarthy’s spokeswoman would only confirm that the meeting took place but wouldn’t comment further.

AT&T agreed to endorse the net neutrality rules last December, in part because Genachowski took Title II reclassification off the table and in part because he agreed to adopt looser restrictions for wireless broadband. The company is also counting on the FCC to deliver a Universal Service Fund revamp. Comcast agreed to net neutrality conditions in its merger. Verizon has appealed the net neutrality order, but made clear in Wednesday’s meeting that was as far as the company was willing to go, the lobbying officials said. NCTA declined to comment, and spokespeople for the other companies didn’t respond to requests. CenturyLink and Qwest are also awaiting approval for their merger. Qwest spokesman Tom McMahon said his company has not been invited to testify.

Free Press Research Director Derek Turner said the Republicans are “running up against the reality that the FCC’s weak open Internet protections really are of no burden to industry.” Free Press is a longstanding advocate of reclassifying broadband under Title II. “It’s no surprise that most of the major ISPs are unwilling to join in this fact-free bashing of the FCC’s rules, because they helped write these rules, and have told their shareholders and Wall Street the truth -- that they in no way are burdensome to their very profitable businesses,” Turner said.