Obama Wants Title II; Wheeler Says There Are Issues to Be Resolved

It’s also unclear when the agency will take up the issue. Wheeler said in a statement Monday that “more work needs to be done.” An agency spokeswoman told us the issue will not be on the commission’s December agenda, and some industry attorneys said the agency may seek even more comments.

That the agency won’t take up the issue in December disappointed some Title II advocates, who hailed Obama’s statement, and pressed the agency to move ahead with a straight reclassification of broadband as Title II. “It would be really dumb” to wait, said former FCC Commissioner Michael Copps, special adviser to Common Cause's Media and Democracy Reform Initiative, who argued the commission has enough information on the record to move ahead. Heartened by Obama’s statement, Title II advocates pressed the agency to quickly move ahead with approving net neutrality rules involving reclassification.

“Any attempt at further foot-dragging in issuing a rule in support of strong Net Neutrality and Title II reclassification will make it clear that Chairman Wheeler is more interested in delay tactics that favor the cable companies he once lobbied for than standing with the President and the public in support of an open Internet,” said David Segal, executive director of Demand Progress, in a statement.

“We’ve never been closer to net neutrality,” Todd O’Boyle, program director for Common Cause's Media and Democracy Reform Initiative, told us. “When the president speaks, the [FCC’s] eighth floor listens.”

Obama’s statement was condemned by Title II opponents. AT&T joined USTelecom in threatening a lawsuit. If the agency approves a Title II approach, “we would expect to participate in a legal challenge to such action,” said Jim Cicconi, AT&T senior executive vice president-external and legislative affairs, in a blog post.

Beyond pressure coming from both sides, plus from Obama, Wheeler also is dealing with an incoming Republican Congress. “Time is of the essence,” said a former top aide to an FCC official, saying the new Republican Congress not only could throw up obstacles to a Title II approach, but also could make Wheeler’s life difficult in other ways. Resigned that the FCC’s Democratic commissioners are moving toward a Title II approach in some fashion, TechFreedom President Berin Szoka told us that “the only way to stop” reclassification would be for the Republican Congress to take measures like barring the use of Title II and granting narrow authority to deal with concerns through Section 706.

Unprecedented?

A former senior FCC official said he had never seen the White House put the kind of pressure on the FCC that Obama applied Monday. “It’s an interesting chapter in FCC history, calling into question the independence of the agency,” said the former official who represents clients mostly concerned about reclassification. It's hard to believe “Wheeler and his team did not have a hand in the substance and timing of the president's statement,” said a former FCC legal adviser with ISP clients.

“The Federal Communications Commission was created to be an independent regulatory agency, above and beyond the reach of crass politics. The White House's decision to intervene in an ongoing rulemaking makes a mockery of any sense of independence or impartiality,” said Jeffrey Eisenach, director of the anti-Title II American Enterprise Institute’s Center for Internet, Communications and Technology Policy, and a former Office of Management and Budget and FTC official.

Industry and FCC officials said a recent Wall Street Journal story (see 1410310050) on the FCC’s embracing of a hybrid Title II approach on net neutrality was likely a White House rather than an FCC leak, designed as a trial balloon to weigh the reaction. An FCC spokeswoman declined comment.

“What all of today’s events make clear to me is that the fix is in,” said Geoffrey Manne, executive director of the International Center for Law and Economics. “There is no question in my mind that Wheeler intends to go the Title II route in some form. The quickness of Wheeler’s response and his plans to start lobbying Congress today strongly suggest this was coordinated between Wheeler’s office and the White House.” FCC Commissioner Jessica Rosenworcel in particular may have balked at Title II, Manne said. “Wheeler needs her vote,” he said. “Having the president weigh in to ask for it publicly seems like a good way to get it and to give her cover for casting it.”

“When the president weighs in on something this specifically and this personally, it is very hard for any Democrat to disregard,” said Public Knowledge Senior Vice President Harold Feld. “The president has lined up with millions of people to say Title II is the only way to keep the Internet open and free from gatekeeper control. Republicans who have denied that there is any gatekeeper control will continue to say that Obama is wrong and we don't need any net neutrality rules. But I don't see how any Democrat who has supported strong net neutrality rules can credibly oppose Title II at this point when the president himself says it is the only way to go.”

“The proposal is a radical departure from the longstanding bipartisan consensus that information technologies, such as broadband Internet access and peering, should be treated as information services and not telecommunications services,” said former Commissioner Robert McDowell, who voted against the 2010 rules as a member of the FCC. McDowell is now at Wiley Rein. Trying to forbear from Title II’s roughly 1,000 requirements will make any order risky on appeal, McDowell said. “The FCC is looking at a perfect hat trick of defeats in the appellate courts.”

The two FCC Democrats now have little choice but to support reclassification, said a former FCC legal adviser who doesn't have clients involved in the net neutrality debate. “Commissioner [Mignon] Clyburn is on record supporting it,” the former official said. “Rosenworcel is very loyal and politically savvy and is very unlikely to buck the president.”

More comments?

Some industry attorneys said the commission may open up a proceeding that’s already generated 3.9 million comments to another round of comments to bolster the record for classification. The current NPRM had focused on a 706 approach, while a Title II approach would involve some reclassification-specific issues, including what to forebear, said a former aide to a commission official. In one Monday meeting, Wheeler stressed his desire for whatever the commission approves to pass court muster, said the official, who was present at one of the meetings and said Wheeler appeared to be engaged in the plan's details. An FCC spokeswoman declined to say whether more comments would be sought.

During his meetings Monday, according to the sources, Wheeler cited the same issues with Title II he raised in a statement that day. “The more deeply we examined the issues around the various legal options, the more it has become plain that there is more work to do," he said. "The reclassification and hybrid approaches before us raise substantive legal questions. We found we would need more time to examine these to ensure that whatever approach is taken, it can withstand any legal challenges it may face.”

“For instance, whether in the context of a hybrid or reclassification approach, Title II brings with it policy issues that run the gamut from privacy to universal service to the ability of federal agencies to protect consumers, as well as legal issues ranging from the ability of Title II to cover mobile services to the concept of applying forbearance on services under Title II," said Wheeler.

The privacy and consumer protection issue appeared to refer to FTC jurisdiction over many of those issues, which it could lose under reclassification, said Fred Campbell, director of the Center for Boundless Innovation in Technology and a former FCC Wireless Bureau chief. The 10th U.S. Circuit Court of Appeals' USF/intercarrier compensation order was based on FCC Section 706 authority, and it’s unclear how it might be affected by reclassification, he said.

The hybrid approach that the Wall Street Journal reported Wheeler was considering “appears to be dead,” said Alan Davidson, New America Foundation vice president-technology policy and strategy and director of the Open Technology Institute, in an interview. He said the hybrid approach reportedly called for the back-end relationship between edge providers and ISPs to be classified under Title II, but would not reclassify the relationship between ISPs and consumers. Obama called for reclassification for consumers.

The Obama administration “expanded its leadership to promote an open internet by supporting the strongest tools to prevent blocking or throttling of internet traffic, and by also supporting the strongest tools to deter fast lanes and prioritized traffic on the public's most essential communications platform of the 21st century,” Public Knowledge President Gene Kimmelman said in a statement.

“A free and open Internet is our end goal. Reclassifying broadband Internet access as a telecommunications service is one way to ensure everyone has equal access and the opportunity to thrive in the digital economy,” said Nuala O’Connor, Center for Democracy and Technology president, in a statement.

“When broadband providers are operating in conformance with the very open Internet principles that the president supports, it is baffling why he would risk continued broadband investment, deployment, economic growth and job creation by asking the FCC to reverse course on the very successful bipartisan policy that has now been in place for more than a decade,“ USTelecom President Walter McCormick said in a statement.

“Public utility-type regulation may have been appropriate for Ma Bell last century and for the railroads in the 19th century, but it is wholly out of place for today's Internet providers operating in a dynamic marketplace,” Free State Foundation President Randolph May said in a statement.