House Subcommittee Advances Net Neutrality Measures Amid Stalled Negotiation

The full Commerce Committee may be planning a markup sooner rather than later. “We haven’t noticed them yet, but I think we’re going to move fairly quickly,” Commerce Committee Chairman Fred Upton, R-Mich., told us later Thursday. “I don’t know for sure, but I think we’re going to do all the bills we marked up today in pretty short order, within a couple weeks the full committee.”

Bipartisan negotiation continued until Wednesday and ended by the time Communications Subcommittee ranking member Anna Eshoo’s, D-Calif., sent out her written opening statement late Wednesday describing negotiation breakdown (see 1602100059). In his opening statement, Subcommittee Chairman Greg Walden, R-Ore., had voiced optimism about reaching deals. Two sources of contention were HR-2666, which would prevent the FCC from regulating broadband rates, and the Small Business Broadband Deployment Act, which would exempt small businesses from the net neutrality order’s enhanced transparency requirements.

“I was deeply disappointed that the negotiations abruptly ended,” Walden said of the rate regulation bill. He was visibly frustrated throughout the subcommittee markup and repeatedly referred to what he saw as abrupt and surprising end to what he judged productive discussion. Walden described sending out concepts to Democrats three weeks ago and then suddenly “for some reason” the Republicans got hit with the Democratic amendments. “I just tell you, there was a way to get this done,” he said. “Unfortunately, the minority took a different path.”

Rep. Adam Kinzinger, R-Ill., the sponsor of the rate regulation bill and the Amateur Radio Parity Act, also slammed a surprise bevy of Democratic amendments. “I think that’s bad faith, maybe.”

Eshoo pushed back against all attacks. “My staff was never presented with an offer that included a definition of rate regulation,” Eshoo told Walden. “There was never an offer that was placed on the table.” She and other Democrats slammed the vagueness of saying just that “rate regulation” is prohibited. GOP counsel David Redl could never offer a specific definition of rate regulation when pressed by members. “Therein lies the problem,” Eshoo said, saying the FCC does examine rates and thus feared many consumer protections involving truth-in-billing and paid-prioritization prohibitions may be swept into the prohibition. Eshoo later defended the introduction of Democratic amendments and cited her history of bipartisan legislative work. “I think it is a slight to suggest that we throw paper around when we offer amendments,” Eshoo said. “But I don’t think we should get into an area where we start diminishing each other for offering amendments. … We’ve offered in good faith.”

“My understanding is there was language,” countered Walden, lamenting the “real discrepancy” he saw in staff communication. Eshoo had asked Redl to seek technical assistance from FCC, but the majority hasn’t received technical assistance, Redl said. Walden referred to a wait of multiple days. “FCC legislative staff, senior policy experts and senior attorneys have been in continuous communication with both majority and minority Committee staff to provide technical and legal analysis about the potential unintended consequences of the legislation,” an FCC spokeswoman told us.

“I guess I’m confused a little bit because when we had the hearing it seemed like there was an opportunity to work together,” Kinzinger said. “We’re probably pretty close to having a bipartisan agreement. And then it’s like bam, not anymore.”

Democrats unsuccessfully proposed three amendments. Eshoo offered an amendment to HR-2666, defeated 10-17, that would have codified the FCC’s net neutrality forbearance, which Republicans argued was an inappropriate way to codify the rate regulation prohibition. “Frankly, codifying forbearance based on the regulatory agency’s forbearance is not what we ought to be doing,” said Rep. Kevin Cramer, R-N.D. Eshoo’s amendment “nullifies everything we are trying to achieve,” said Rep. Renee Ellmers, R-N.C. Rep. Doris Matsui, D-Calif., offered an amendment to the same bill that would have carved out the consumer protections that a rate regulation prohibition would not touch. That was defeated 11-16.

Compromise may still be possible upon advancement to full markup, lawmakers said. “That ‘something’ could be anything,” Rep. Ben Ray Lujan, D-N.M., said of the lack of rate regulation definition. “It’s starting to sound like a Dr. Seuss book.” But “there’s more common ground than there is not,” said Lujan, saying Democrats also don't have any interest in broadband rate regulation. Walden called Lujan’s points “valid” and urged continued talk by staffers all around, from Lujan to Cramer. “I think we can get this,” Walden said. “Frankly I thought we were on a path to get this done.” Walden also said he didn’t see the legislation as endangering the FCC’s consumer protection authorities but wants to make sure they remain in place. “I want to make sure that we have truth in billing going forward,” Walden said. Kinzinger didn’t agree with concerns over the rate regulation definition: “Let’s just say they can’t regulate rates. Period.”

“We can get to yes,” Eshoo said. “We’re saying forbear but don’t allow harm to be done in the areas where consumers are protected. There’s a real problem because there’s not a definition of rate regulation. … I think the majority has to come up with a way to guarantee there are not going to be those harms.”

“This bill is completely unnecessary,” Free Press Policy Director Matt Wood said after the markup. “FCC Chairman Tom Wheeler has testified before this same subcommittee that he doesn’t plan to set broadband rates. It’s an issue lawmakers from both sides of the aisle say they agree on: Market forces are generally better at determining the rates Internet users pay for access. But there are meaningful differences between the rate-setting power Congress granted the FCC in the laws on the books today and the consumer-protection authority the newly proposed bill endangers. Finding a harmful practice to be unreasonable, or banning it straight out, is a far different proposition from the FCC attempting to determine and set the prices that broadband providers’ retail customers pay for service every month.”

House Commerce can achieve “a resolution that is both comprehensive and bipartisan,” said Telecom Industry Association CEO Scott Belcher, citing the challenges of Communications Act Title II reclassification in the FCC’s net neutrality order.

Rep. Dave Loebsack, D-Iowa, offered and withdrew an amendment to the Small Business Broadband Deployment Act. His amendment would have affected the definition of a small business eligible for transparency requirements exemption, which Democrats argued is too large. Loebsack hopes for a final bill “amenable to both sides of the aisle,” and Walden agreed, saying there was also negotiation that was “down to a final sort of back and forth” on this bill. Scheduling prevented new language for the bipartisan Amateur Radio Parity Act, Kinzinger said of his bill, hoping for new language by markup. But Kinzinger said he understands concerns and believes consensus is possible by full markup. “You’ve worked hard on it and it shows, because there are over 100 co-sponsors,” Eshoo, one of the critics worried about how the bill would affect homeowners’ associations, told him. The subcommittee signed off on that measure by voice vote.