Congress

Divided E&C Passes FCC Rate Reg-Blocking Bill

Wheeler Pitches Preserving Ability to Vet Zero-Rating Services Under General Conduct 3/15/2016 12:30 PM Eastern
Communications Subcommittee Chairman Greg Walden (R.-Ore.)

On a party line vote and after a sometimes rancorous markup, the House Energy & Commerce Committee Tuesday passed a bill that would prevent the FCC from regulating the rates consumers pay for broadband access service.

 

The bill, HR 2666, the No Rate Regulation of Broadband Internet Access Act, was sponsored by Rep. Adam Kinzinger (R-Ill.).

 

The vote was 29 to 19.

 

At least two things became clear during the markup: Democrats and Republicans, while agreeing on a basic premise--no rate regs--disagreed, sometimes violently, on what that meant and how it should be achieved through statute.

 

The hearing had some theatrics, with a Democrat pulling out a dictionary to question the Republicans definition of rate regulation, and a video of FCC Chairman Tom Wheeler seeming to signal that he agreed with language of the Republican bill. Then there was the letter from Wheeler sent to ranking Democrat Frank Pallone (D-N.J.) yesterday in which he said he did not agree with the Republican bill and saying it could threaten the FCC's ability to enforce its Open Internet rules and general conduct standard when looking at issues like zero rating plans.

 

Reading from the letter, Pallone quoted Wheeler as saying the bill "would introduce significant uncertainty into the commission's ability to enforce the three bright line rules that bar blocking, throttling and paid prioritization rules as well as our general conduct rule that would be applied to issues such as data caps and zero rating."

 

Republicans said they were not aiming for the bright line rules, but Communications Subcommittee Chairman Greg Walden (R-Ore.), made it clear he was concerned with the FCC using the general conduct standard to impose ex post facto rate regulations. And he was not simply talking in general terms,

 

He cited T-Mobile's Binge On zero rating plan, pointing out there was plenty of consumer uptake, 34 petabytes worth, that could save those consumers $100 million. He said during the markup that one of the bill's goals was to prevent the FCC from being able to come in after the fact and say those were out of bounds--not being able to carve out those services from users bills would, the Republicans argue, be ex post facto rate regulation. As well as an innovation killer and a regulatory overreach.

 

Democrats want the FCC to be able to use the general conduct standard to look at zero rating plans or data caps. Republicans don't. That appears to be one of the issues on which there is no common ground across the aisle.

 

Clearly Wheeler does too. The FCC is currently investigating, or at least gathering info on, Binge On and a handful of other zero rating plans, including Comcast's Stream TV and AT&T's sponsored data plans. And while Wheeler has signaled it was a fact-finding mission, a complaint under the new Open Internet rules has since been filed against Stream TV. (Comcast says it is not even a zero rating plan)--and Wheeler's letter clearly indicates those issues are ones that are being eyed under that case-by-case standard.

 

Wheeler has said the reclassification of ISPs as Title II telecoms would not result in ex ante (before the fact) regulation.. Republicans and Democrats both supported making that explicit, so a future chairman could not change their minds and exercise Title II regulatory authority that Wheeler chose not to apply.

 

Democrats have said they support codifying that the FCC will not regulate rates, but want a more narrowly tailored bill that simply codifies the Title II rate reg sections the FCC forebore in the Title II order, or codifying the FCC new

 

Title II rules, or explicitly saying nothing in the bill prevents the FCC from regulating in the public interest, convenience and necessity.

 

All those were offered up as amendments to the bill by Democrats and defeated by Republicans.

 

The Democrats are concerned that the bill could sweep away consumer protections from monopoly rates, anticompetitive interconnection charges and even rural broadband subsidies under the Universal Service Fund.

 

To address some of the Democrats' concerns, House Communications Subcommittee Chairman Greg Walden (R-Ore.) introduced an amendment that made it explicit that the FCC can condition Universal Service Fund support on the rates charged for that service, can continue to require truth in billing, and can enforce its ban on paid prioritization.

 

The amendment also said that, for the purposes of the bill, Internet access did not include data roaming or interconnection.

 

But none of that assuaged the Democrats--the Walden amendment passed on a party line vote--who complained that the Republicans had not consulted them on the amendment, which was circulated a couple of hours before the hearing; that it did not go far enough, and that what it did do threatened network neutrality rules, consumer protections, and the FCC's regulatory authority.

 

House E&C Chairman Fred Upton (R-Mich.) did say there was a possibility of continuing to work and talk and perhaps amend the bill before it reached the House floor. But given the tenor of the markup, where tempers were clearly short and occasionally flared, that did not appear to be a promising prospect.

 

Separately, in a House Appropriations Committee hearing Tuesday (March 15), Wheeler was asked about his statements to Congress on not regulating broadband rates, and the allegation that FCC staffers did not help Republicans draft legislative language on the bill to prevent broadband rate regulation. Wheeler said he would be happy to help draft language fulfilling what he had said--what he had said was that he was OK with language codifying the FCC's forbearance, essentially what Rep. Anna Eshoo (D-Calif.) proposed.

Want to read more stories like this?
Get our Free Newsletter Here!
September
October

VR 20/20

The Times Center, New York, NY