House Panel Approves Net Neutrality Disapproval Resolution

The House Communications Subcommittee approved a bill to overturn the FCC net neutrality rule from December, over protests by Democrats. Dividing by party Wednesday afternoon, the committee voted 15-8 in favor of a joint resolution of disapproval under the Congressional Review Act authored by Subcommittee Chairman Greg Walden, R-Ore. Democrats held up the vote by flooding the markup with seven amendments. Walden rejected them because he said resolutions under the CRA statute are not subject to amendment. In a new development, GOP-sought witness RapidDSL admitted to slowing Netflix on its network. A Netflix spokesman said, “Consumers should be able to receive what they want over the Internet."

Among banned Democratic amendments: (1) To kill the resolution if it’s determined that public safety or homeland security would be harmed; (2) To clarify the resolution wouldn’t take away FCC authority to protect consumers; (3) To stop providers from blocking consumer access to lawful websites; (4) To keep the FCC order’s transparency requirement; (5) To extend the order’s rules for wireline to wireless providers; (6) To direct the commission to continue investigating privacy violations; (7) To prohibit blocking, degrading or discriminating against religious Internet communications.

RapidDSL CEO Tom DeReggi said his company slowed Netflix when the Internet video service congested RapidDSL’s network. DeReggi supported the GOP joint resolution and was invited to testify by Republicans. “Broadband provides jobs, not HD video,” said DeReggi. “When Netflix started streaming across that network, it compromised the business … I had no choice but to slow Netflix.” Blocking companies like Netflix may be “appropriate” in some cases because ISPs have to address the “source of a problem.” Subcommittee Ranking Member Anna Eshoo, D-Calif., replied that the statement was “offensive to consumers across the country."

Democratic and Republican tempers flared as they considered the joint resolution. “A vote against the resolution is nothing more than a vote to allow the FCC to reclassify broadband under Title II once the agency loses the appeal of this order in court,” Walden said. Unless the resolution is passed, the FCC could “regulate any interstate communication service on barely more than a whim and without any additional input from Congress,” he said. “I do not want to cede such authority to the FCC.” The FCC keeps changing its “story” for where it gets authority, said full committee Chairman Fred Upton, R-Mich. “Each time it teeters from one weak explanation to another based on the most recent legal or political impediment it is facing.” The net neutrality order didn’t contain a market analysis, despite FCC Chairman Julius Genachowski’s claims to the contrary, he said. “If the FCC was truly weighing the costs and benefits of its actions, the agency would not be attempting to regulate the Internet."

"We're wasting time arguing about a destructive resolution that would threaten openness and innovation on the Internet,” said Commerce Committee Ranking Member Henry Waxman, D-Calif. Tech companies, consumers and economists oppose the resolution, he said. “Even broadband providers do not support the resolution,” said Waxman, citing a letter from NCTA and AT&T’s written testimony for the hearing. Passing the resolution could make the FCC’s authority to work on other issues uncertain, including building a national broadband network for public safety, said Eshoo.

Considering the resolution “is an exercise in the most exquisite frustration,” said Rep. John Dingell, D-Mich. The Senate is working on spectrum legislation, and by taking up net neutrality, the House is ceding its authority on that subject, Dingell said. And the resolution won’t make it through the Senate or past the president, he said. The committee historically has allowed both sides to fully participate, he added.

Turning a popular maxim by net neutrality opponents on its head, Rep. Ed Markey, D-Mass., said “this is a resolution in search of a problem.” Turning another, Rep. Doris Matsui, D-Calif., said the resolution likely would have “unintended consequences."

Net neutrality “is not a partisan issue,” Walden said before the political fireworks began. He cited a 2006 vote in which 58 Democrats voted against a net neutrality amendment to video legislation. “Some of those Democrats are still on the full committee. Some are still on this subcommittee. And that was not a vote against a Title II versus a Title I approach. That was a vote against imposing network neutrality rules.” More telecom companies have not supported the GOP effort because they are afraid to cross their regulator, Walden said in a side conversation with reporters.

While amendments weren’t allowed during the markup following the hearing, Walden said the process has been fair. Over two hearings, Democrats have actually had more witnesses than Republicans, he noted. Walden told reporters that the joint resolution would be voted on by the full Commerce Committee soon but he didn’t know when. House Majority Leader Eric Cantor, R-Va., said Tuesday that the resolution would be on the floor within weeks (CD March 9 p1).

Living with Net Neutrality

The only executive from a large ISP at the witness table, AT&T Senior Executive Vice President Jim Cicconi, as expected, said the rules aren’t perfect, but they are “fair” and will allow AT&T to invest provided that the FCC narrowly interprets the “plain language” of the order. He estimated that the company will invest between $17 billion and $19 billion this year, which is flat with last year’s $19 billion investment. The FCC rules are consistent with AT&T’s existing policies and won’t require any burdensome business changes, Cicconi said. The AT&T executive emphasized that the company would have preferred no regulations, but ultimately compromised because pressure was increasing for regulations and the company wanted to stop the FCC from choosing a Title II approach.

If the GOP resolution becomes law, market reaction would depend on how the FCC reacts, said Cicconi. If the FCC decides not to move forward with regulations, there would be certainty and the market would be pleased. But if the FCC decided to move toward Title II reclassification, there would result a “great deal of uncertainty,” he said.

"All of us could probably live with” the FCC rules, said DeReggi. But RapidDSL, a regional provider of fixed wireless, supports the GOP resolution because it believes the FCC’s rules are neither “neutral” nor written precisely enough to bring certainty to his company, he said.

Free Press thinks the GOP resolution is an “unnecessary and dangerous” reaction to the FCC’s order that will increase uncertainty and harm economic growth, said the group’s Research Director Derek Turner. The FCC order is not “excessive regulation” and the resolution will “greatly harm our country’s ability to innovate,” said car-share company GoLoco CEO Robin Chase, who was the founding CEO of ZipCar.