Rep. Walden: FCC Independence a Fiction

Cites Warnings Title II Could Cause 20%-30% Investment Dip

House Communications Subcommittee chairman Greg Walden (R-Ore.) told small and medium-sized cable operators Wednesday (March 4) that he thought the Federal Communications Commission’s decision to reclassify Internet access under Title II common-carrier regulations was a “total overreach,” as well as illogical and illegal.

In a Q&A session hosted by the American Cable Association and moderated by president/CEO Matt Polka, Walden also said he had off-the-record conversations with companies that had told him Title II reclassification would translate into a 20%-30% cut in their broadband investments.

FCC chairman Tom Wheeler has downplayed warnings that investment cuts could be a byproduct of reclassification, pointing to statements by some execs that they would  continue to invest.

Walden, continuing his recent criticisms of the White House’s push for Title II, said it is a “fiction” that the FCC is an independent agency and that the White House directive was a “tragedy” for professionals at the agency.

The congressman said there had been no market failure and that Republicans had proposed legislation that could prevent blocking and throttling and paid prioritization. Polka said the ACA's members supported those bright-line rules. Walden said there were still no Democrats on the bill, but that he believed they had been “held in abeyance” until after the Title II vote.

Walden did not say it, but it is unlikely any Dems will join so long as the language foreclosing Title II and weakening Sec. 706 authority remain in the bill.

Walden signaled that Sen. John Thune (R-S.D.), chairman of the Senate Commerce Committee, would take the lead on video issues in the planned overhaul of the Communications Act, while the House would focus more on FCC reauthorization and reform — he said he thinks there needs to be a lot of the latter — though the House also would look at video.

Asked how he would define a successful new session of Congress, Walden said that would include "getting the FCC back in its box to do the things it is supposed to do.”

Walden said he appreciated ACA’s input on the Communication Act update effort — the Energy & Commerce Committee has issued a half dozen white papers seeking industry comments — saying ACA’s comment had been very helpful.

Walden also associated himself with ACA’s issues with a general lack of understanding of the unique challenges of the small and medium-sized businesses ACA represents. Walden was himself once a small radio station group owner and recounted a story he has cited more often recently about the 10 years it took him to get the FCC to approve his translator request, an approval that came after he had already sold the stations.

Polka pointed out that ACA has been fighting for two decades against a one-size-fits-all regulatory model, and Title II was again an issue where the FCC has not taken into account the specific needs of smaller operators. He asked if that is a structural problem that needed to be addressed.

Walden said he thought it was a lack of understanding of how the marketplace works.

Walden said he did not think regulators had a clue about small business issues with capital on the line and compliance and reporting requirements, and that that was something  “we always have to push back on.”

Polka asked whether Walden might consider taking up the Local Choice proposal circulated in the Senate as part of the satellite reauthorization legislation, but Walden was noncommittal.

Polka took a bit of umbrage at ACA members being labeled gatekeepers by the FCC and told that unless they were providing 25 Mbps service, they were not good enough.

“This is a really frustrating issue for our members,” Polka said. “Nobody asked them to build broadband in rural areas, and in most cases they did not ask for help. In many ways it is an offense to what they have already accomplished.”

Walden said wait until the app providers find out they have to ask for permission to innovate. He signaled that Google might wind up under the microscope as well.

“It is more than the fiber and the wire in today’s information age," Walden said. "I look at that as the carrier of the signal. The modulator of the signal really is, in some cases, are the services that ride on the Internet, like Google. If they can throttle and do blocking and paid prioritization and all of that, how is that any better. And so ,I think in the information age you really need to step back and say, who is really affecting where you go and how you get there?”

He said he is not saying Google was engaging in those bad  behaviors, but that "it is a changed world and it is more than just fiber and copper.”