Action on Biden's FCC Agenda Seen Needing Democratic Majority

No broadband-related actions President Joe Biden asked the FCC to take in his Friday executive order on competition can easily proceed until there are additional commissioners to secure a Democratic majority, EO supporters and opponents told us. The directive encourages the FCC to at least bring back rescinded 2015 net neutrality rules and act against some other communications sector practices. Congressional Democrats have become increasingly frustrated by Biden’s slow nominations process (see 2106160056). (For the EO's tech provisions, see 2107090060.)

Americans “pay too much for broadband, cable television, and other communications services, in part because of a lack of adequate competition,” Biden said in the order. He said in a speech that "there are more than 65 million Americans who live in a place with only one" ISP. "Research shows, when you have unlimited Internet operation, you pay up to five times more on average than families in places with more choices," he said. "That's what a lack of competition does: it raises the prices you pay." Acting FCC Chairwoman Jessica Rosenworcel was among agency heads attending the ceremony.

The order urges the FCC to adopt “’Net Neutrality’ rules similar to” the ones the commission rescinded during Ajit Pai’s chairmanship (see 1712140039) and reclassify broadband as a Communications Act Title II service. A fact sheet said the rescinded rules required ISPs to “treat all internet services equally,” but once that order was “undone,” providers have been able to “use their power to discriminatorily block or slow down online services.” FCC action to bring back those rules is expected to be a top priority when there's a Democratic majority (see 2101060055).

The directive encourages the FCC to require ISPs “to display a broadband consumer label” similar to those designed to look like nutrition labels, “so as to give consumers clear, concise, and accurate information regarding provider prices and fees, performance, and network practices.” The FCC released such labels in 2016 under then-Chairman Tom Wheeler (see 1604040046) but jettisoned them during the Pai chairmanship. The administration wants the commission to require providers to “regularly report broadband price and subscription rates … for the purpose of disseminating that information to the public in a useful manner, to improve price transparency and market functioning.”

Biden wants the FCC to bar “unjust or unreasonable early termination fees for end-user communications contracts, enabling consumers to more easily switch providers.” He urges the FCC to “prevent landlords and cable and Internet service providers from inhibiting tenants' choices among providers.” Those exclusivity deals affect “low-income and marginalized neighborhoods, because landlord-ISP arrangements can effectively block out broadband infrastructure expansion by new providers,” the White House said.

The EO said the FCC should do “future spectrum auctions under rules that are designed to help avoid excessive concentration of spectrum license holdings,” preventing things like warehousing “or the creation of barriers to entry, and to improve the conditions of competition.” Biden wants the commission to support “the continued development and adoption of” open radio access network “protocols and software, continuing to attend meetings of voluntary and consensus-based standards development organizations … and undertaking any other measures that might promote increased openness, innovation, and competition in the markets for 5G equipment.”

Officials React

Rosenworcel welcomed Biden’s call “to enhance competition in the American economy and in the nation’s communications sector.” She didn’t detail how the FCC will pursue proposed actions. “Our economy thrives on competition,” she said.

“Every American should have high-quality, affordable broadband,” said Democratic Commissioner Geoffrey Starks. The order “spotlights the values that should drive our work toward that goal: affordability, fairness, competition, innovation, and consumer choice.”

Commissioner Brendan Carr criticized the order. Its “FCC provisions represent a big gift to Big Tech,” he said. “It embraces a backwards-looking, Obama-era approach to Internet regulation” that “would give the lobbyists at Google, Facebook, and Amazon the regulatory protections and price controls they’ve long sought while doing nothing to address Silicon Valley’s threats to free speech and an open Internet.”

Rosenworcel and FTC Chair Lina Khan were criticized by Pai and his former chief of staff, Matthew Berry, for attending the EO signing. Biden initially mistakenly referred to Khan as FCC chair before erroneously calling her “acting chair of the FTC.”

“When there is a Democratic White House, the media seems to care a whole lot less about the independence of independent agencies,” Berry tweeted. “Imagine the reaction” if Trump “signed an EO asking independent agencies to do certain things WITH FTC/FCC CHAIRS STANDING BEHIND HIM!” Pai tweeted a screenshot of the FCC’s “About” webpage and highlighted that the commission is stated to be “independent.”

Sen. Ed Markey, D-Mass., “strongly” supported Biden’s net neutrality call and said he believes the FCC “must act without delay” on Title II reclassification once a Democratic majority is in place. He plans to “soon introduce legislation to do the same by statute.” Markey plans to refile legislation similar to his Save the Internet Act (see 2103020057). Sen. Richard Blumenthal, D-Conn., also highlighted Biden’s net neutrality language.

House Communications Subcommittee ranking member Bob Latta, R-Ohio, said “imposing burdensome Title II rules on broadband providers will hurt consumers and chill the broadband investment needed to close the digital divide and maintain resilient networks.” He raised concerns in a statement that Biden is “manipulating” the FCC “into taking actions on his behalf” and urged Rosenworcel and other commissioners to “publicly commit to upholding” the agency’s independence.

Industry Upset

CTIA, USTelecom and other communications sector groups pushed back against administration claims.

More “Americans have less expensive, more reliable and better broadband service choices today than they did one year ago,” said USTelecom CEO Jonathan Spalter. “To look back on the last 15 months and the explosion of streaming, zooming, distance learning and digital transformation … and conclude that America has a net neutrality crisis is neither a credible nor productive policy debate 15 years on.”

The EO “rehashes misleading claims about the broadband marketplace, including the tired and disproven assertion that ISPs would block or throttle consumers from accessing the internet content of their choice,” NCTA said. “America’s broadband networks have been the nation’s most resilient and critical infrastructure during the pandemic.” The White House’s comments are “severely lacking in a strong foundation as to what wireless consumers actually experience,” CTIA said in a statement. “More than 99% of Americans can choose between three or more wireless providers and there are nearly 100 mobile providers including nationwide, regional and resale carriers.”

Incompas welcomes “additional scrutiny of the large ISPs’ practices,” CEO Chip Pickering said. "Broadband monopolies and limited competition have caused consumers frustration, slowed down internet speeds and driven up prices.”

Implementation Woes

The efficacy of FCC action in response to Biden’s EO will “really boil down to” whom the president nominates to the commission and how the confirmations process goes, said Electronic Frontier Foundation Senior Legislative Counsel Ernesto Falcon: “It would make sense to finish” nominations before the August recess.

The FCC actions Biden seeks are “necessary,” said Public Knowledge Director-Government Affairs Greg Guice. “You need a full FCC to achieve those goals. ... Until then those are hard goals to achieve.” Guice said that "it’s extremely helpful to know the administration’s position and that should help with calls for legislation or regulatory action.”

Without a Democratic majority at the commission, “it’s not clear how they actually expect to get that done,” said International Center for Law & Economics Innovation Policy Director Kristian Stout. That the administration hasn’t put a permanent chair “in yet suggests that they’re having some trouble figuring out how to get the right people into those positions.” Biden’s telecom policy language is “threatening to the welfare of networks in the U.S., but I don’t see it having an immediate effect,” Stout said. “A lot of this has to go through agency processes that will really shape the outcome.”

The order’s broadband section “veers into unreality by ignoring the data showing that prices for broadband services are continually declining and that American households with access to two or more providers is 93% and steadily growing,” emailed Free State Foundation Policy Studies Director Seth Cooper. Reimposing the Obama rules “charts a course that would likely backfire by undermining the high levels of private investment in broadband networks,” he said.

Nominations

TechFreedom General Counsel Jim Dunstan and others believe Biden’s signing of the order means the White House is close to naming a permanent FCC chair and third commission Democrat. The White House announced nominations of four ambassadors Friday but hadn’t announced its FCC picks by that afternoon.

The order's release likely isn’t tied to a decision on the FCC and demonstrates that with COVID-19 more under control, White House staff is focused on other issues, said Benton Institute for Broadband & Society Senior Counselor Andrew Schwartzman. “It is increasingly difficult to see how there can be any confirmations completed before the very end of the year.”

Recent communications sector attention has focused on Georgetown Law Institute for Technology Law & Policy’s Gigi Sohn as an emerging leading contender to join the FCC, either as chair or a commissioner. Sohn didn't comment. Other contenders continue to get attention, including DLA Piper’s Smitty Smith (see 2104280057) and Wiley’s Anna Gomez. Biden will also have to decide whether to renominate Rosenworcel to another FCC term, as she would have to leave the commission Jan. 3 absent Senate reconfirmation, lobbyists noted.

Mozilla Foundation Senior Adviser Alan Davidson, meanwhile, emerged as a potential contender to be Biden’s pick to lead NTIA, lobbyists told us. Davidson was previously Mozilla vice president-global policy, Commerce Department digital economy director from 2015-2017, and New America’s Open Technology Institute director. Davidson and Mozilla didn't comment. Scott Harris of Harris Wiltshire and Markey senior policy advisor Joseph Wender are also known to be in the running for the NTIA nomination (see 2105120065).

Stakeholders view Sohn as the current top rival to Rosenworcel for FCC chief, but it's also widely agreed that Sohn would have a difficult road to confirmation. “Everyone says they’re hearing more and more about Gigi Sohn,” Schwartzman said: She could face “a tough time in the Senate, especially if she is presented as the next chair.”

“My bet's on Gigi at this point, and for chair,” TechFreedom's Dunstan said: “Maybe Jessica gets one last chance to convince the president's handlers that she's the one to take that agenda forward, but my thinking all along has been that if she hasn't been deemed chair yet, that was a clear signal that the [White House] was holding out for someone with more gravitas, or more perfect alignment with still-fluid telecom stances.”

Given Sohn’s “very rather aggressive public opinions about applying this type of regulatory framework to ISPs and the administration appointing” Khan to lead the FTC “to handle big tech issues, it would make sense for the president to look to an advocate, like Gigi, to lead the charge at the FCC,” said Lincoln Network lawyer Joel Thayer.