House Divided Over Net Neutrality Draft

Democrats Find Much To Criticize; Republicans Argue That Many Elements Came From Dems
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The House Energy & Commerce Committee Communications Subcommittee spent over three hours Wednesday (Jan. 21) debating a proposed network neutrality legislation. The main takeaway was that there is no bipartisan agreement on the Republican-backed draft legislation, which would preempt the FCC's ability to reclassify ISPs under Title II.

Most Democrats on the committee took the opportunity to point out that Republicans appeared to be conceding that there was need for net neutrality rules, but most had major issues with the draft, and none came out in support of it in its current form.

Rep. Greg Walden (R-Ore.), chair of the Subcommittee, and Fred Upton (R-Mich.), chair of the full committee, pointed out that many of the ideas in the draft--no blocking or discrimination and no paid prioritization -- came from the first FCC Open Internet order proposed by then Democratic Chairman Julius Genachowski, and were things Democrats, including the President, had been calling for years.

Walden pointed to the 2010 order under Genachowski, and its input from former House E&C Chair Henry Waxman (D-Calif.), who retired after last Congress, to suggest the bill incorporated bipartisan ideas. He said it was a solution that would end the legal gymnastics that have tied up the rules in court. He also said he was willing to work with the minority on the language of the draft and that his goal was to provide protections for consumers and certainty for the marketplace.

The Democrats' problems were primarily with the limits on FCC authority, including Title II and Sec. 706, and what they saw as loopholes for paid prioritization and discrimination.

Rep. Anna Eshoo (D-Calif.), ranking member of the subcommittee, set the Democratic tone early on with an opening statement that ripped the bill for having an enormous bias against enforcement and did real harm to rural broadband. She branded the draft bill "a march to folly."

Rep. Frank Pallone, newly-minted ranking member of Energy & Commerce, said he would be interested in bipartisan legislation that started out that way, but indicated that the draft was not such a vehicle in its current state.

He said in any event, the FCC should proceed with its network neutrality rule vote. The time for the FCC to act is now, he said. He was not the only Democrat to suggest that work on a bill did not have to preempt FCC action, though he did not elaborate on how that would work.

National Cable & Telecommunications Association President Michael Powell said NCTA supported the draft, which would also "clarify" that the 1996 Telecommunications Act was not a grant of authority. But he also said NCTA would support the FCC retaining some of that authority if it avoided Title II reclassification.

The Draft would effectively take Sec. 706 and Title II out of the mix, creating a new section in the Telecommunications Act that gave the FCC specific authority over, but not clearly defined definitions of, such things as reasonable network management and specialized services, as well as preventing blocking of content.

In answer to a question from one of the committee members, Powell joined with CTIA President Meredith Attwell Baker, like Powell a former FCC commissioner, to pledge that their respective associations supported banning paid prioritization.

Both Powell and Baker warned against the FCC proceeding with efforts to reclassify broadband under Title II. Powell stopped short of suggesting the FCC should not proceed with its Feb. 26 vote, saying he respected the chair's prerogative to set his own timetable--Powell was once chairman himself. But he did warn of dire consequences.

Baker said that if the FCC does apply Title II to mobile broadband, CTIA would sue, and she expected it would win.

There was general agreement at the hearing that, whatever happens, bill or FCC order, it will be challenged in court.

The bill's stripping the FCC of broad Sec. 706 authority was a main sticking point with Democrats on the panel, as well as with some witnesses.

They are concerned that the move would prevent the FCC from taking steps to promote rural broadband and other deployment efforts.

Another issue is that the bill's allowance for specialized services is a back door to the paid prioritization that the bill would otherwise prohibit.

Subcommittee Chairman Greg Walden (R-Ore.) said the committee was not in the business of preventing something and at the same time creating a loophole to get around it, and added he would be willing to clarify that when it came to specialized services.

Powell came to the defense of those services, saying the Congress and FCC has recognized that some portion of the infrastructure ISPs built with private money could be reserved for such services, and that trying to take over that entirely for the public Internet would be a confiscation of property. He did say that if the FCC found that specialized services were being used to block or degrade or prioritize anticompetitively, the FCC had the authority to address that.

Joining most Democrats in taking aim at the bill, at least as drafted, were Etsy CEO Chad Dickerson, National Hispanic Media Coalition EVP Jessica Gonzalez, and, to a slightly lesser extent, VP Paul Misener. Aligned with the Draft were Powell, Baker and, to a slightly lesser degree, Dr. Nicol Turner-Lee of MMTC.

Misener had plenty of issues with the draft, but praised the principles behind it as "excellent" and suggested the problems were fixable.

Turner-Lee supported the draft, but only so long as it included strong enforcement and prevented digital "red-lining."

Eshoo joined with other Democrats and the draft-unfriendly witnesses to criticize the draft for not incorporating interconnection issues into the network neutrality regime. They argue that the consumer does not care whether the issue is in the last mile or at the intersection of networks and ISPs.

Rep. Peter Welch (D-Vt.) and Mike Doyle (D-Pa.) echoed those interconnection concerns, as did Amazon's Misener and Esty's Dickerson.

There was a scrum of sorts over what impact Title II would have on the marketplace. Eshoo said there was no evidence Title II would dry up investment. Powell countered that businesses, would, of course, keep investing, but that the scale and velocity of that investment would be impacted.

For several of the witnesses, their day had just begun. A second hearing on net neutrality was scheduled in the Senate Commerce Committee Wednesday afternoon--the bill is a co-production of Republican leaders in both committees.