Policy

Don't Tread On Me

11/08/2010 12:01 AM Eastern

Washington — Network-neutrality fans seeking a
cop on the Internet beat may have a long wait.

With a return of Republican control to the House of Representatives
and the crumbling of a fragile compromise
on network neutrality, the threat of regulation seems to
be lifting for cable operators.

While Congress may still legislate new rules regarding
privacy issues on the Internet, the most controversial
regulatory threat, net neutrality — which cable, telco and
satellite companies feared would metastasize to other restrictions,
including rates — has dissipated.

Multichannel News cover story, Nov. 8, 2010The Federal Communications Commission's authority to ensure that big Internet providers don't discriminate, in question for months now, looked as if it might be buttressed by a compromise during talks brokered by Rep. Henry Waxman (D-Calif.); the House Energy & Commerce Committee chairman. The FCC had even signaled a growing consensus on key issues of transparency and nondiscrimination as it sought further comments on its network openness proposals.

But the atmosphere of agreement has blown away like
so many autumn leaves, replaced by a rhetorical return
to the traditional divides and a cry of, “Don’t tread on my
network.”

With Republicans in a commanding position in the
House after last week’s elections, big network operators
have more backing for fewer restrictions, and the likelihood
that FCC chairman Julius Genachowski can push
through a Title II reclassification — even if he wants to —
has greatly diminished.

"The last I heard was that [Republicans] really weren’t
going to try to do something unless Genachowski forces
them to,” said Rob Atkinson, president of the Information
Technology & Innovation Foundation. “So, if the chairman
holds a gun to somebody’s head [on Title II] … and even
if he held the gun, I don’t think it would work. He’s got to
pull the trigger.”

Internet Innovation Alliance co-chairman Bruce Mehlman
said: “Julius and his team are smart guys, and I expect
they are going to look for a consensus compromise so
they can put that issue to bed.”

Both Rep. Joe Barton (R-Tex.) and Rep. Fred Upton (R-Mich.)
have been outspoken opponents of network-neutrality
regulations (see box). It was Barton who announced
that Republicans would not support compromise legislation;
Upton called Title II a “blind power grab” and warned
the FCC in no uncertain terms to “stand down.”

Economist Hal Singer, managing director of Navigant
Economics, said he expects reclassification to be “off the
table,” given the new House’s makeup.

 

TITLE II ‘OFF THE TABLE’

The FCC has been pushing a different way to ensure net
neutrality ever since a U.S. appeals court called into question
the agency’s authority to regulate broadband in the
Comcast-BitTorrent case. Genachowski’s plan: Reclassifying
cable MSOs and other distributors using a limited enforcement
of common-carrier rules. The FCC may still take
some action — perhaps finding enough authority under
Title I — but even that’s unlikely until first-quarter 2011.

FCC attorneys have already been working on various
scenarios to establish clearer authority, including both Title
II and Title I options, according to commission and industry
sources.

Network operators had been hoping for a legislative fix
to keep the FCC from imposing those Title II regulations,
no matter how “light-touch” they were billed to be. But
the issues of whether to apply network-neutrality rules to
wireless broadband and managed services helped blow up
the FCC-brokered talks on a compromise.

The National Cable & Telecommunications Association,
for example, cited the FCC’s assertion that there was
“narrowed disagreement” on key elements in its proposed
rulemaking. But the NCTA said that if the FCC confines its
inquiry only to the issues of managed services, it “skip[s]
over the fundamental question dividing the parties in this
proceeding: Is government regulation needed to ensure
the preservation of a vibrant and open Internet?”

NCTA said the answer was no, citing its earlier comments
in the proceeding. NCTA said flatly that adopting
rules “would do nothing to promote the commission’s objectives,”
and would instead be counterproductive.

Time Warner Cable, an NCTA member that filed separately,
put an even sharper point on it. “The Public Notice
begins with the premise that a consensus has emerged in
support of adopting net-neutrality rules — implying that the
only matter left to be resolved is how those rules should apply
to specialized and mobile wireless broadband services,”
the MSO said in its filing. In fact, the record is far more divided
regarding the wisdom and legality of such mandates.

One veteran lobbyist, speaking on background, suggested
the interested parties had reset to their default positions,
but were still trying to hammer out a compromise
behind the scenes.


FCC MAJORITY HOLDS

FCC chairman Genachowski still has a majority of votes
supporting network-neutrality regulation. However,
Republicans would likely use their bully pulpit of hearings,
letters and requests for information to make it clear
that Title II remained what its opponents have called the
“nuclear option.”

Siding with cable operators, Verizon, another guest at
the FCC’s negotiating table, hardly adopted a compromise
tone
in
its filing
with
the agency
when it came
to managed services
and wireless
broadband. It said
the sweeping regulation
proposed by the FCC
in the proceeding and Title II
reclassification proposal would
be “unjustified and unlawful.”

Google and Verizon were the
ones who came to a side agreement
on network-neutrality legislative language
that would have only applied a
transparency principle to wireless broadband.

But in a meeting last month with FCC officials,
Google’s Washington Telecom and Media Counsel,
Richard Whitt, appeared to be pushing for Title II reclassification, which a consensus bill clarifying the FCC
broadband authority was meant to avoid.


MUSICAL CHAIRMANSHIPS

Washington With
the Republican
takeover of the House,
plum committee
and subcommittee
chairmanships will be up
for grabs.

The leading
contenders to head the
Energy & Commerce
Committee are:

Rep. Fred Upton
(R-Mich.), who has been
a big fund-raiser for Republican candidates and,
as the former chairman of the Communications
Subcommittee, is versed in communications
issues, though he would be a moderate
Republican in a Congress that has taken on a
more conservative tenor after last Tuesday’s
midterm election. Upton, too, is definitely
interested in the job.

Rep. Joe Barton (R-Tex.), former chairman and
currently ranking member of the committee, would
need a waiver of term limits to regain the post. He
is already campaigning for the job.

Rep. Greg Walden (R-Ore.), a former broadcaster
who took a leave of absence from the committee
to help out the party, is said to be interested in the
subcommittee chairmanship. “It is his if he wants it,”
said one broadcast lobbyist. As the ranking member
of the subcommittee, Rep. Cliff Stearns (R-Fla.) is in
line for the post. But he is eyeing a full committee
chairmanship, either Energy & Commerce, which he is
interested in, or perhaps Veterans Affairs, according
to Hill sources. Rep. John Shimkus (R-Ill.) is also
eyeing the Energy & Commerce post.

While the Congress may back away from net
neutrality, telecom policy will still feel the imprint
of the elephant’s foot. The new Congress will likely
hold hearings on Universal Service Reform, and
take an active role in oversight of the broadband
stimulus plan.

More than anything, privacy will be the issue
that gets lawmakers’ attention. Republicans and
Democrats alike have vowed to look deeper into
the privacy issue. Barton said as much last week
when he warned Facebook that privacy would be
“in the crosshairs” of the new Congress.

September