Democrats Unready to Partner with GOP on Net Neutrality Legislation

“We’ll get to where there’s a markup, we’ll have an opportunity to hear from our colleagues on specific changes they’d like to see,” House Communications Subcommittee Chairman Greg Walden, R-Ore., told reporters after the House hearing. “Where we do have agreement are on the principles that we’ve outlined that are the same [FCC Chairman] Tom Wheeler’s outlined, the same the president’s outlined -- to prevent blocking, to prevent throttling, to prevent abuses on the Internet, to protect consumers. What we hold promise of is legal certainty because we can do it statutorily and clearly.” He wishes the FCC was “more open to working with its authorizing committee,” Walden said, declining comment on any legislative timeline.

“It is not a partisan starting point,” Senate Commerce Committee Chairman John Thune, R-S.D., argued, saying the text is still a draft and open to changes. “I certainly hope that a willingness to collaborate develops in the legislative branch.”

“Suffice it to say, the FCC has made it clear they don’t plan to hit the pause button -- well, the chairman doesn’t,” Walden told reporters. The FCC is expected to vote on a Title II proposal Feb. 26. Walden said he won’t know the shape of the FCC order until the vote, and during the hearing pressed witnesses on whether they would see the order prior to the vote. All doubted it.

Nelson, Pallone Worried

“Some maintain that we must have congressional action on net neutrality prior to FCC action,” said Senate Commerce ranking member Bill Nelson, D-Fla. “I do not share that concern.” Nelson, who has talked with Thune about such legislation, was widely expected to have split with him over timing. “I remain concerned about any proposal that could strip away the FCC’s tools to enforce essential consumer protections for broadband service,” Nelson said. He insisted the FCC needs “flexible authority," crediting it with the FCC transitioning the USF to broadband and ensuring consumer information privacy. Nelson is “willing to continue those discussions,” he said.

Democrats seized on what they saw as draft bill shortfalls -- reduced statutory authority and what some believe is a loophole in the specialized services language allowing for paid prioritization deals.

“Mr. Chairman, I don’t want to undermine the FCC’s authority,” House Commerce Committee ranking member Frank Pallone, D-N.J., said, calling for a broadband “cop on the beat." The FCC has accumulated its record over 13 months, Pallone said: “Congress cannot be expected to work it all out in 13 days. ... The time for the FCC to act is certainly now.”

House Communications Subcommittee ranking member Anna Eshoo, D-Calif., agreed and worried about the bill stripping FCC authority over such issues as interconnection. Amazon Vice President-Global Public Policy Paul Misener told Eshoo he was “not sure” the draft would nix the FCC’s peering jurisdiction. National Hispanic Media Coalition General Counsel Jessica Gonzalez slammed the draft as preventing the FCC from having “authority even to investigate this issue,” she said. “I don’t believe our draft does that," Walden countered. Walden, speaking to reporters, said other proposals had included specialized services language: “It is not our intent to create a giant loophole.”

Nelson cited Sprint's recent receptivity to Title II. “How does that square, Ms. Baker, with your testimony?” he asked CTIA President Meredith Baker. “We will still invest -- there’s no doubt about that,” Baker replied. “The question is how much.” Title II is “an unknown,” she said, declining to say whether she disagreed with Sprint.

Rep. Bobby Rush, D-Ill., warned against any partisan GOP bill advancing and pledged to “introduce open Internet legislation in the not-too-distant future,” he said: “Nothing but bipartisan.” He later questioned witnesses on whether they thought the FCC would be on a “collision course” with a court if it were to write its own rules. A spokeswoman for Rush told us the “bipartisan legislation” would “statutorily” guarantee “the open internet principles that so many agree on while maintaining the flexibility necessary and such a fast changing environment.”

“Hundreds of companies” are “in jeopardy” if not given “full Title II protection,” Sen. Ed Markey, D-Mass., said, citing a series of issues where he said the FCC wouldn't be able to protect consumers in the broadband space: “Under the draft we have right now, [these protections are] not there.” Rep. Doris Matsui, D-Calif., worried the “overly broad” GOP bill could “undermine” the FCC’s efforts to move USF to broadband and could allow prioritization. Rep. Mike Doyle, D-Pa., said the "proscriptive" draft falls short. Senate Communications Subcommittee ranking member Brian Schatz, D-Hawaii, said in a written statement the draft “would make it nearly impossible for the FCC to deal with future problems or opportunities as they come up." Congress is “best suited to establish broad policies” and expert agencies “the particulars,” Schatz said.

Title II Anxieties

Republicans favored the draft text but some acknowledged it represented principles that they had not traditionally backed. But these lawmakers slammed Title II as their greater fear.

“I’m a paid prioritization guy,” said Rep. John Shimkus, R-Ill., saying he believes it can incentivize buildout. But “we’re in a new world order where I think we now have looked at the debate and said, businesses have done that too, and said we need to get this monkey off our back,” Shimkus said. “Where can we find middle ground?” Subcommittee Vice Chairman Bob Latta, R-Ohio, backs the discussion draft, he said. He said cable operators in his district worried about Title II -- which Latta has tried to limit through his own legislation -- and the prospect of overhauling their billing process. “Should small providers be exempt from any network neutrality rules?” Latta asked. “I do believe it’s wise to put this out as a draft,” Rep. Joe Barton, R-Texas, said, and despite “some concerns” said he is optimistic: “We can iron out the details through these hearings.”

“I think we’re here, senator, because the FCC is proposing Title II,” Robert McDowell, a former GOP FCC commissioner now with Wiley Rein, told Sen. Roy Blunt, R-Mo., who had wondered why move forward with rules. “That’s what this is all about.”

Walden pressed witnesses on applying protections to wireless service. “There might be an opportunity for litigation here, you think?” Walden said when CTIA’s Baker doubted whether regulating wireless under Title II is legally sustainable. Walden also asked about USF fees and whether the Internet “would be subject to USF levy” after the order. NCTA President Michael Powell said yes if the FCC reclassifies but said it could forbear. Walden also said reclassifying would cost the FTC its role in this space: “Has there been an FCC rule proposed that does not acknowledge the need for specialized services?”

Eshoo defended Title II and mentioned ISP statements suggesting reclassification wouldn't stop investment. Pallone said cable stock prices are up since Obama backed Title II. “Do you agree the draft bill provides the same level of protection as the 2010 rules?” Pallone pressed witnesses. Gonzalez acknowledged similarities but said “it essentially freezes the FCC in time” and affects the statutes in troubling ways.

Thune quizzed Midcontinent Communications Senior Vice President-Public Policy Tom Simmons about Title II effects, which Simmons contended were very real and costly. The company would lose customer trust, Simmons said. Baker and Powell also spoke at length about the damaging implications of applying Title II. Reclassification would “add to the cost of deploying that infrastructure” and “dampen” any enthusiasm in reaching some parts of the country, Powell said. These industry executives welcomed legislation instead of FCC action.

Sen. Dean Heller, R-Nev., argued the draft “should make all parties involved happy,” saying it’s 70 percent of what “the other side wants.” Democrats “would prefer to risk all the gains made in this legislation against those of a long regulatory process with an uncertain outcome,” Heller said. If legislating, think about the powers and what tools lawmakers want the FCC to have, said Public Knowledge President Gene Kimmelman, who opposes the draft. “If it’s going to be done, it’s going to be done,” Walden told reporters of the GOP acceptance of FCC rules. “We’ve got to do it right.”