Net Neutrality Order Expected to Be Approved 3-2 Largely as Proposed by Wheeler

Wheeler, in his clearest comments on reclassification of broadband yet, said Wednesday (see 1501070054) his proposal will likely largely follow the direction laid out by Obama. One possibility, sources said, is that Clyburn may push to make the order even tougher than was proposed by the chairman. Industry officials said they expect Wheeler to follow White House advice and propose the reclassification of both fixed and mobile broadband as Title II services, with forbearance, imposing largely the same rules on both.

“While you might see last-minute attempts to convince the chairman otherwise, there is really no way he will go a different direction than the president,” said an aide to a former FCC chairman. “The other two commissioners are sure to follow suit. At this point, it makes a lot of sense for the chairman to get it on the agenda, get it voted, and move on.”

Wheeler probably would prefer a light touch regulatory regime under Title I, but would have a tough time finding three votes for such an approach, said University of Pennsylvania Law professor Christopher Yoo. “If so, the chairman's safest course of action is to follow the president's lead and embrace Title II,” Yoo said. “That said, in his speech at CES, the chairman still framed the implementation of Title II in terms of the old Title I approach, that is, non-blocking, non-discrimination, and [no] paid prioritization.”

The order will probably be approved on a 3-2 vote "pretty much like Wheeler presents it,” said Randolph May, president of the Free State Foundation. “I don't have the sense that it would be materially different absent Commissioner Rosenworcel's pending renomination prospects. I do think there will be various reactions by the Republican majorities in both the House and the Senate if the commission relies, as expected, on Title II, and I think that one or more of these[bills] may possibly succeed.”

“Obviously there is a lot of pressure on Rosenworcel, since the president has had only one priority in this sector,” said a former top FCC official.

But Paul Gallant, analyst at Guggenheim Partners, said he expects the two Democrats to still play a role in getting the order ready for a vote. “Net neutrality has always been a partisan issue, so a 3-2 vote would seem likely,” he said. “The odds probably favor the chairman’s recommended policy cuts getting adopted, but there’s too much at stake to assume the other two Democrats will just sign off on everything.”

The one remaining wild card is whether the Hill will move, industry sources said. "If press reports are accurate, and a bona fide bipartisan and bicameral legislative compromise on net neutrality that satisfies the four policy objectives outlined by President Obama on November 10 is truly budding quickly, the FCC should hit the pause button,” said Robert McDowell, a former FCC commissioner now at Wiley Rein. “The commission should allow the directly elected representatives of the American people to create an effective bipartisan law. On its current trajectory, however, the FCC is likely to get overturned in court a third time -- all while creating tremendous uncertainty."

Larry Downes, project director at the Georgetown Center for Business and Public Policy, expects some “wheeling and dealing” on the order. But “the bigger question” is whether Congress will step in and “inject some adult supervision into what has become an embarrassment of mangled process and poor public relations at the FCC,” Downes said. “As you know, there are strong indications that the Senate Commerce Committee and its House counterparts are working in a bipartisan effort to draft legislation that would solve the real problem the FCC has danced around for over a decade -- that Congress never gave them jurisdiction over broadband Internet access in the first place. That’s what’s doomed every FCC open Internet effort so far, and will almost surely doom whatever comes out this time around.”

Berin Szoka, president of TechFreedom, said Wheeler may be bluffing at this point in saying the FCC will act in February. “If he fears losing in court or forbearance being a quagmire, his decision to announce the February vote a month earlier than he had to may simply be the only tool he had for publicly turning up the pressure on lawmakers to forge a compromise quickly,” Szoka suggested. Wheeler could always delay a vote if bipartisan support starts building on the Hill, he said. “In order words, if Wheeler thought he held a weak hand, legally, he would have every incentive to bluff in public -- while also privately encouraging Congressional Democrats to get a deal done.”

“Press reports that the Chairman might ‘go rogue’ and stick with a Title I-based hybrid proposal were never credible; it was always going to take a unanimous vote from the three Democratic Commissioners to pass an Open Internet Order, and getting even one of them to buck their own President would have been improbable,” said Craig Moffett of MoffettNathanson Thursday in a note to investors. “Getting all three was never going to happen. It was clear from the moment of the President’s statement that the FCC would reclassify.”

"The critics are right: Congress ought to write a law that applies to broadband,” said Matt Wood, policy director at Free Press. “Good thing they already did just that, back in 1996, on a bipartisan and bicameral basis.” The American public wants the Internet to be protected under Title II, he said. “Try telling a real person, instead of a hired gun, that ISPs cannot interfere unreasonably with their voice calls, but emails, apps, websites, and text messages are all fair game for cable and telecom blocking and discrimination,” Wood said. “They'll laugh at you.” Reclassifying broadband is the “legally sound way” to approve net neutrality rules, he said. “Talk of legislation in Congress now may or may not be a good faith effort to address the problem.”