Deal on Net Neutrality Could Still Blow Up
FCC approval of net neutrality rules at Tuesday’s meeting is not a done deal, commission officials acknowledged this week. There remains a “distinct possibility” that the order could “blow up,” a source said. Meanwhile, Rep. Mike Rogers, R-Mich., a member of the Commerce Committee, asked the FCC commissioners to cancel their scheduled vote and respond to his office by noon Friday. In an unusual step, Rogers had the letter hand-delivered to each commissioner’s office Thursday.
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Republican Commissioners Robert McDowell and Meredith Baker have made it clear that they plan to vote no. That means Chairman Julius Genachowski needs the support of Democrats Michael Copps and Mignon Clyburn for his proposal. But both have major concerns with the proposed order, especially its treatment of wireless (CD Dec 16 p1). Copps appears to have already won concessions on definitions, but there appears less room for compromise on how wireless is treated under the rules, said agency and industry officials.
In his letter, Rogers sharply criticized the Wireline Bureau for placing 2,000 pages of documents into the record late last week. “I urge Chairman Genachowski and the FCC to reject this misguided rule,” Rogers said. “Should the FCC approve these so-called net neutrality rules, I will immediately begin working with my colleagues to enact a disapproval resolution through the Congressional Review Act.” Rogers said the proposal “speaks of transparency and openness yet this vote comes just days before Christmas and after Congress adjourns for the year.”
Andrew Schwartzman, senior vice president at Media Access Project, said he could see Genachowski falling short of a majority next week. “So far, Copps is holding firm, and Commissioner Clyburn remains very firm on addressing wireless as well,” he said. “I know that everyone expects a deal in the end, but I wouldn’t bet real money either way."
"I think the chairman has more to lose here than Copps, which gives Copps freedom to drive a hard bargain,” said Public Knowledge Legal Director Harold Feld. “Copps is a complete free agent who is not looking to be renominated, whereas the chairman is looking at having network neutrality continue to overshadow the rest of his agenda. If it blows up, Copps is a hero to the left and to all the edge companies that have said they don’t support the proposed rules, while Genachowski is the FCC chairman who couldn’t do network neutrality despite support from the president and a Democratic Congress.”
But Free State Foundation President Randolph May questioned whether the Democratic commissioners would reject the order proposed by Genachowski even if they don’t get major concessions on wireless. “I think Copps is just posturing to try to negotiate a better deal from his perspective,” May said. “From my perspective, the proposal is already bad enough. Any further changes he extracts from Chairman Genachowski will just make it even worse in terms of potential harm to consumers and the economy. I guess we'll see whether Genachowski will or will not stand firm."
"It still feels like something that gets done, but it’s obviously a tough call for the Democratic commissioners,” said Paul Gallant, an analyst at MF Global, Thursday. “They feel strongly about the need for tougher wireless rules, but it’s not clear whether the chairman has much deal space left.”
"It really comes down to Michael Copps,” said Sanford Bernstein analyst Craig Moffett. “Michael is a very principled man, and it doesn’t surprise me at all that he is taking his public service obligation very seriously here. But at the end of the day, I suspect he will conclude that the perfect is the enemy of the good. It would be a very grave decision to reject the chairman’s order outright."
Commissioner Meredith Baker questioned in a speech Thursday to the Federalist Society whether imposing net neutrality under Title I would withstand judicial scrutiny. “As I read Comcast, I see no invitation to go back and think creatively about how to contort the statute to discover or discern new authority without an appropriate statutory hook,” Baker said. “And I see nothing that has changed so significantly in the past eight months with respect to that authority to suggest a different outcome if and when our action is challenged."
If the FCC approves rules it would also be over objections by Congress, “which has asked us bluntly not to act, and definitely not to act his month,” Baker said. “While that should be more than sufficient reason, net neutrality is also the wrong policy to drive investment, jobs, and opportunity into the Internet economy that this country so desperately needs."
In a call with reporters Thursday, Jerry Brito, an adjunct professor of law at George Mason University, called troubling several aspects of the FCC’s process in developing the net neutrality order. “The chairman promised that he would have a data-driven FCC and in this case there is a dearth of data to support the notion of a systematic discrimination problem,” he said. “I'm also concerned about due process here.” He also cited last week’s data release. “A last minute data dump can be pretty problematic, because it gives the public very little time to digest and respond. To the extent that any part of the final order relies on the data that is contained in the last-minute data dump, I would find it very suspect.”