Transparency Exemption Bill Poised for Senate Consideration After House Approval

“We don’t have a specific date yet, but they’re planning to do a markup on it,” said Sen. Steve Daines, R-Mont., in an interview Wednesday. “We want a bill we can get through both houses and on the president’s desk.”

A Daines spokeswoman confirmed the version poised for Senate Commerce Committee markup reflects compromise changes included in the House version and said Daines is looking to advance the measure through any must-pass piece of legislation. Daines earlier this week filed an amendment to the FCC Reauthorization Act, not publicly released, that included the exact text of the House compromise of HR-4596 and included Sen. Joe Manchin, D-W.Va., as a co-sponsor (see 1603150049). That FCC reauthorization was originally slated for markup Wednesday but was postponed. The Daines spokeswoman said the bill should have a path forward with bipartisan support now, ideally through the coming markup of the FCC Reauthorization Act and if not, then another vehicle as an amendment soon. Daines’ original version was partisan, with Sens. Cory Gardner, R-Colo., and James Risch, R-Ind., as the only co-sponsors.

Senate Commerce Committee Chairman John Thune, R-S.D., told us last year he favors the concept of the legislation (see 1511200044). He has been open to moving net neutrality legislation he believes can pass into law and has worked with ranking member Bill Nelson, D-Fla., on major net neutrality legislation. “Chairman Thune supports this legislation and will discuss it with Ranking Member Nelson and other members of the committee,” a spokesman for Thune told us Wednesday.

Thune, during a Wednesday markup of Federal Aviation Administration Reauthorization legislation (see 1603160028), pledged an April markup of his FCC Reauthorization Act. “As many of you know, the FCC has not been reauthorized in over 25 years, and during that time the technology and communication landscape has changed dramatically,” Thune said. “Due to the substantial debate we are expecting on the FAA Reauthorization today, Senator Nelson and I have agreed to delay consideration of this measure until our next markup in April. During the next few weeks, we are committed to working together with all of you to try to build bipartisan consensus for a package that will hopefully enable the FCC reauthorization to pass the Senate by unanimous consent.”

Daines introduced the bill in November as S-2283. House Communications Subcommittee Chairman Greg Walden, R-Ore., introduced a companion version as a discussion draft early this year and then formally as HR-4596 on Feb. 24. The original text would have codified an exemption from the enhanced transparency requirements for ISPs with 500,000 subscribers or fewer. Walden successfully compromised with Democrats to lower the threshold -- down to 250,000 -- for what a small business constitutes. The FCC has offered a temporary exemption for ISPs with 100,000 subscribers or fewer since issuing its net neutrality order last year. The House Commerce Committee approved the bill unanimously after the compromise, and it faced no objections on the House floor this week.

The White House Office of Management and Budget said this week it doesn’t oppose the current compromise. Industry groups including the American Cable Association and CTIA issued statements backing the vote. Free Press and the New America Open Technology Institute blasted even the compromise following the committee markup (see 1602250015). "The bill that passed the House today would create an unnecessary loophole in this order, impacting millions of Americans who pay for broadband services," Open Technology Institute policy counsel Josh Stager said after Wednesday's vote.

“We just passed it in the House,” Walden told us moments after the vote. “I’m excited about it. I would hope the Senate finds it something they can support as well. I’ve been focused on getting it through the House.”

House Majority Leader Kevin McCarthy, R-Calif., used the vote as an occasion to speak on the floor about what he dubbed the “innovation initiative.” House lawmakers haven't referred to this concept previously. House Democrats had previously developed what they called an Innovation Agenda and said they're developing an Innovation Agenda 2.0 this year. “And today, thanks to Greg Walden, we have the first bill from the innovation initiative on the floor, protecting the Internet for hundreds of thousands of users,” McCarthy said. He said the small ISPs require “permanent relief” and said the bill provides such relief “for good.” The legislation actually provides relief for five years. “Regulators from the 20th century agencies are trying to manage and control a 21st century world, and it isn’t working,” McCarthy added. “The world is too complex and individual situations are too unique for a big, bulky government to try and apply standards to everyone.”

Walden and Rep. Dave Loebsack, D-Iowa, who negotiated the compromise with Walden, spoke on the House floor Wednesday before the vote. “It relieves, we believe, an unnecessary regulatory burden on really small Internet service providers, the little ISPs out there all over our districts across the land that are struggling to compete in this marketplace,” Walden said. “It was clear that Congress needed to act because the FCC wouldn’t.” Walden referred to “very serious negotiations” between himself and Loebsack.

“In my home state of Iowa, we have 134 -- that’s 134 -- we have 99 counties but 134 individual small ISPs,” Loebsack said on the floor, citing concerns his office has heard. The median number of subscribers is 750, he said. “Small ISPs do not have the resources that the bigger guys do.” Loebsack said he backs the FCC enhanced transparency rules despite what he said was a needed balance. “Anyone that tunes in, it’s not as complicated as it sounds,” said House Communications Subcommittee ranking member Anna Eshoo, D-Calif., on the floor. “We wanted to make sure we could protect the consumer but also not burden the small businesses, and that’s what this legislation represents.”

Rep. Marc Veasey, D-Texas, spoke about and then withdrew his amendment to HR-4596, which was also set up for a vote on the House floor Wednesday. “The real purpose of a permanent exemption should not be to just lighten the load of these businesses,” Veasey said of his amendment, which would have forced the FCC report on the matter to look at the effect of a permanent exemption on consumers. But Veasey’s negotiation with colleagues, including Loebsack, convinced him the bill would accomplish his goals without the amendment, he said.