USTelecom's McCormick: Title II is "Bad, Bad, Bad"

Says End of Open Net Doesn't Justify Reclassification

Walter McCormick Wednesday planned to tell a Media Institute luncheon that the FCC's vote to reclassify Internet access service as a Title II telecom service subject to common carrier regulation was "bad policy – bad for consumers, bad for innovation, bad for investment, [and] bad for American competitiveness in the world economy."

That is according to his prepared text for an April 22 luncheon speech to the group.

He also says the FCC is making a "breathtaking" assertion of authority in trying to call "one thing a different thing" in order to exercise Internet regulatory powers Congress did not give it.

USTelecom has filed suit against the Feb. 26 decision, which was along party lines and strongly opposed by the Republicans on the panel, who shared McCormick's criticisms.

McCormick reiterated that his association is okay with the Open Internet standards the FCC is espousing, and would support them if enshrined by Congress. What USTelecom, and the cable associations that have also sued, oppose strongly is reclassification under Title II. "The end does not justify the means," he said bluntly.

He told the crowd that, in the 1996 Telecom Act, Congress had recognized that Title II economic regulation was from a "bygone" era, had contributed to the financial collapse of the railroads, and pointed out that by 1996, Congress had repealed it for air and motor and rail carriers under Democratic leadership.

"So, our position is not partisan, or political. It is rooted in economics, the law and the lessons of history," he said.

"So, after having tried repeatedly to regulate with regard to the Internet, and having it overturned by the courts, the FCC has decided to simply call one 'thing,' a different 'thing,' over which it has very broad power," he said.

A D.C. federal appeals court has twice rejected FCC efforts to regulate Internet access, the first time concluding the FCC was trying to enforce guidelines as though they were regulations, the second time because it appeared to be enforcing non-common carrier regulations as though they were common carrier regs. The same court is likely to hear the court challenges to the FCC's third try via Title II reclassification.

McCormick says that by reclassifying, the FCC is violating "the express terms of the 1996 Act and the Administrative Procedure Act’s standards for 'reasoned decision making,' which require a showing of 'changed circumstances.' There has been no change in the technology of broadband Internet access. The only change in circumstances has been that the Commission has decided it would like to expand its authority."

While USTelecom's legal argument is that the FCC has exceeded its authority, it is not against the FCC expanding its authority over Internet regulation, so long as it is under Congress' direction.

"We are asking [Congress] to expand the FCC’s authority to enable it to adopt the Open Internet standards advanced by the President," he said.

Back in November, the President publicly urged the FCC to adopt a Title II approach, saying it was the best way to legally justify strong new rules against blocking or degrading content or paid prioritization.

Given its choice of the courts or Congress, said McCormick, it would prefer Congress.

"The question of the agency’s jurisdiction can be resolved by either branch. However, we would prefer that it be resolved by the legislative branch, as it is the source of the agency’s authority, and is the only branch that can grant new powers. Therefore, having this resolved by the legislative branch offers the best prospect for settling the issue once and for all," he said.

McCormick suggested the Congress might want to rethink the FCC's mission as part of an overdue review of communications law.

"It seems the debate today is, in many cases, over how to divide authorities between existing agencies, such as the FTC and the FCC, or whether they should be given joint jurisdiction," he said. "I would suggest this is myopic. The FTC was established 100 years ago, the FCC 81 years ago, by Congresses of the past that creatively approached the challenges of their time. As such, today’s Congress can decide whether new structures might work better."