FCC Chairman Wheeler Takes Another Stab at Controlling the Internet

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By Deb Collier, Special for USDR

In December 2013, House Committee on Energy and Commerce Chairman Fred Upton (R-Mich.), and Subcommittee on Communications and Technology Chairman Greg Walden (R-Ore.) announced that they would begin a review of the Communications Act of 1934 and its subsequent amendments, including the Cable Act of 1992 and the Telecommunications Act of 1996. The committee has issued three white papers on various topics that Congress plans to address in the modernization of the Communications Act, and it is expected that future publications will include the role that the Federal Communications Commission (FCC) will play in Internet governance, among other items.

However, FCC Chairman Tom Wheeler has no plans to wait and see what Congress will do regarding several of the issues that will be considered by the committee, including net neutrality, section 706 of the Communications Act, and Title II reclassification of broadband service. During his April 30, 2014 keynote addressto the 2014 Cable Show attendees, Wheeler made it very clear that he firmly believes the FCC needs to act immediately to take charge of and regulate the Internet. Wheeler declared that it was time to establish rules over Internet service providers that would be “tough, enforceable, and in effect with dispatch.”

The Internet has created a vibrant, dynamic space for electronic commerce as well as other uses, including research, email, social media, online video streaming, and music generation. The light regulatory touch with which the Internet has been governed has allowed innovators to explore and incubate new ideas, created new business models, and enhanced information sharing.

This is not the first time the FCC has attempted to impose increased government regulations over the Internet. In 2010, the FCC tried to sanction Comcast for its Internet traffic management processes. This effort was overturned by the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit Court), which ruled in the first instance that the FCC had no authority to require broadband providers to give equal treatment to all Internet content flowing through their networks. In 2010, the agency tried to impose the Open Internet Order on the Internet. On January 14, 2014, the D.C. Circuit Court ruled that the FCC has some authority to regulate broadband services under Section 706 of the Communications Act but overstepped its bounds when it subjected Internet providers to treatment as Title II common carriers through its anti-discrimination and anti-blocking rules.

On May 15, 2014, Chairman Wheeler followed through with his announcement to impose new restrictions over the Internet by bringing up for a vote a notice of proposed rulemaking (NPRM) in the matter of Protecting and Promoting the Open Internet (GN Docket No. 14-28). The FCC adopted the NPRM in a 3-2 vote along party lines, even though Democratic Commissioner Jessica Rosenworcel expressedher reservations over acting so quickly on the proposed rulemaking and called the process “flawed.” Commissioner Ajit Pai questioned why the FCC, an organization made up of five unelected officials, was taking up such a controversial issue instead of allowing Congress to determine the best path for the future of the Internet. Commissioner Michael O’Rielly suggested that Congress never intended for the FCC to use the Section 706 as an affirmative grant of authority over the Internet, and that the proposed rulemaking requests comments on how to interpret additional Section 706 language to broaden the FCC’s authority over the Internet.

The inclusion of Title II in the NPRM is the most direct challenge to the current governance of the Internet. Based on laws intended to regulate the railroads in 1887, Title II was enacted as part of the Communications Act of 1934 to regulate pricing for telephone services when one major national telephone service held monopoly power. Companies that are still burdened with the regulatory mandates of Title II are required to ask permission from the FCC for any changes they wish to make to their systems, which can frequently take several years to obtain. Burdening the Internet with antiquated rules would decrease innovation and increase the cost of compliance. Perhaps the real question about Title II is whether it should continue to constrict innovations in communications today and in the future, or be eliminated altogether in favor of a light regulatory structure that allows for the rapid innovation that the Internet brings. However, this particular question is best left for Congress to decide, and not the FCC.

In fact, efforts are underway on Capitol Hill to place restrictions on the FCC’s ability to create new rules on net neutrality until after Congress has had an opportunity to weigh in. On February 21, 2014, Rep. Marsha Blackburn (R-Tenn.) introduced H.R. 4070, the Internet Freedom Act, which prohibits the FCC from reissuing any regulations that are substantially similar to the net neutrality rules previously ruled upon by the D.C. Circuit Court, unless specifically authorized by a law enacted after the Internet Freedom Act’s enactment.

In addition, on May 28, 2014, in response to the FCC’s proposal to reclassify broadband Internet access under Title II as a telecommunications service instead of an information service, Rep. Bob Latta (R-Ohio) introduced H.R. 4752, which would limit the FCC’s regulation of broadband under Title II of the Communications Act. As Rep. Latta stated when introducing H.R. 4752, “At a time when the Internet economy is thriving and driving robust productivity and economic growth, it is reckless to suggest, let alone adopt, policies that threaten its success. Reclassification would heap 80 ears of regulatory baggage on broadband providers, restricting their flexibility to innovate and placing them at the mercy of a government agencies.”

The NPRM includes a framework that retains the definitions and scope of the most recent Open Internet Order; enhances the transparency rules upheld by the D.C. Circuit Court; adopts no-blocking rules and added protections for edge providers; requires the creation of enforceable standards of reasonable practices; and creates a multi-faceted dispute resolution procedures. The FCC will be collecting public comments on the proposed rule over the next four months, with initial comments due on July 15, 2014, and reply comments due by September 10, 2014.

The FCC is seeking to solve what Chairman Wheeler perceives as market failures when none exist. It is far better for the FCC to delay any further action until Congress has had an opportunity to modernize telecommunications law.