Upton, Walden to FCC: Show Us the Economic Analysis

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House Energy & Commerce Committee Chairman Fred Upton (R-Mich.) and Communications Subcommittee Chairman Greg Walden (R-Ore.) have given the FCC until Monday (March 7) to show their economic analysis behind imposing new network neutrality regs.

In a March 3 letter to FCC chairman Julius Genachowski, a copy of which was supplied to Multichannel News, the legislators ask the chairman to "demonstrate the FCC's actions will not harm our economy or ability to innovate." In addition to that analysis, the congressmen are looking for an answer on whether the FCC will close its open proceeding on classifying broadband as a Title II telecommunications service.

The letter is a follow-up to the FCC chairman's appearance at a network neutrality hearing in the Subcommittee, and comes in advance of a second hearing on the issue March 9, this one on the substance of a resolution of disapproval that would invalidate the rules.

The FCC had not responded at press time, but generally does not comment on correspondence until it has responded to the correspondent. An FCC spokesman said the FCC had received the letter "and we are reviewing it."

A copy of the letter, which is also signed by Lee Terry (R-Neb.), vice chair of the subcommittee, is reprinted below.

Dear Chairman Genachowski:

Thank you for testifying at our Feb. 16, 2011, subcommittee hearing on your rules regulating the Internet. We wish to follow up on some of the issues discussed. Please provide written answers to the following questions by close of business Mon., March 7:

1. You said at the hearing that you would find for us the market analysis the FCC conducted justifying government intervention. Please point us to the specific paragraphs and language in the order providing that analysis.

2. President Obama said in a Jan. 18, 2011, Executive Order that agencies should base regulations on a reasoned determination that their benefits justify their costs. While the executive order does not apply to independent agencies, the President urged such agencies to follow it, and you have indicated that you plan to do so. Please point us to the specific paragraphs and language in the order containing the FCC's cost-benefit analysis justifying your intervention.

3. President Obama has said that it is important in the current fiscal environment to focus on promoting the economy and creating jobs. Please point us to the specific paragraphs and language in the order analyzing the impact of your rules on the economy and the creation or loss of jobs.

4. The order concludes that its rules will have "minimal" burden on small businesses. Please point us to the specific paragraphs and language in the order providing the analysis to back up that conclusion.

5. The FCC cites section 706 of the Telecommunications Act of 1996 as legal justification for its action in the net neutrality order. While we dispute the Commission's prior finding that broadband is not being deployed in a "reasonable and timely manner," section 706 states that in the event the Commission finds such a shortcoming, it is empowered to take action "to accelerate deployment of such capability by removing barriers to infrastructure investment." Please point us to the specific paragraphs and language in the order providing the analysis of how the rules remove barriers to infrastructure investment.

6. The FCC has regulatory docket GN 10-127 open that presents alternative approaches to the net neutrality rules adopted last December. Now that the Commission has adopted an order, will you terminate the open proceeding on Title II regulation of the Internet and your "Third Way" proposal? If not, what purpose does retaining an open docket in those proceedings serve?

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