Senators Punt Net Neutrality Legislative Negotiations Beyond Predicted Timelines

Initial proposed timelines for concluding negotiation collapsed. Negotiations picked up in intensity in June, with a draft that evolved from what Thune originally offered in January (see 1506040046). Thune’s initial draft, released in January with House Commerce Committee Chairman Fred Upton, R-Mich., would have codified net neutrality rules and limited FCC reliance on Communications Act Title II and Telecom Act Section 706. At the start of June, Thune told us he expected to reach a deal or declare impasse within two weeks and said there was “one in particular issue” stalling a deal. Nelson countered that he was in “no rush” but expected to know by July’s end. No deal emerged by the time Congress left for its recess of more than a month. Senators left Aug. 5 and return following Labor Day in September.

“Yeah, it was hopeful,” Thune said in a recent interview of his June prediction of two weeks. “I was trying to kind of hurry things along, but unfortunately that didn’t happen.”

Senate Communications Subcommittee ranking member Brian Schatz, D-Hawaii, told us he doesn’t think the window for negotiations closed. “Discussions are ongoing,” Schatz insisted, saying Thune and Nelson “have a good relationship and I know staff has been reporting that they’re in continued dialogue. But I don’t know any news to report. But I certainly wouldn’t say we’re done.” Schatz isn't directly involved with the Thune/Nelson negotiations but has stayed in touch with them about it for months. He’s broadly supportive of the compromise idea if a deal is possible and has warned against net neutrality litigation.

Nelson declined to comment on the latest staff negotiations on two occasions before the Senate recessed, and his spokespeople didn’t comment this week. The first time, Nelson said he would need to consult with staff first, and the second time he said there were no updates. “Stay tuned,” Nelson told us, repeating a line he first uttered about the compromise efforts during the first week of January (see 1501060051).

“It’s fair to say that we’re probably not going to get there” in the short term, Thune said. “Obviously, it’s going to be a fall play if we [make it happen].”

If Nelson and his staffers genuinely fear the FCC could lose in court in defending its net neutrality order, “he really is sitting on a ticking clock,” and Democrats have “incentive to bluff,” said TechFreedom President Berin Szoka, who backs a legislative compromise. “You have to take it with a grain of salt everything Democrats are telling you.” In March, Szoka worried that even June would be too late to advance stand-alone net neutrality legislation (see 1503200048), but now he acknowledges that a deal may still come together despite mounting difficulties. Net neutrality increasingly becomes a “political football” as the 2016 presidential election approaches, Szoka said.

“It seems as though rumblings about legislation never quite silence, though they have certainly subsided as of late,” said Free Press Action Fund Government Relations Manager Sandra Fulton. “If the previous Thune-Upton discussion draft is any indication, we know there are a lot of sticking points in the negotiation.” She slammed the lack of FCC oversight in the original draft, which “would allow for rampant abuse by the big ISPs,” she said. “Any new bill has to treat the protections that Internet users have in place right now as a floor, not a ceiling. A purported compromise bill that falls short of real safeguards would face swift public backlash. It’s hard to believe some legislators haven’t realized it yet, but messing with Internet freedom doesn’t win votes for members on either side of the aisle.”

Szoka suspects ardent net neutrality defenders such as Free Press are strategizing to get White House contenders, Hillary Clinton and Bernie Sanders in particular, to declare no legislation is necessary, making it “more difficult for congressional Democrats to get a deal done,” he said. Free Press "would certainly encourage all presidential candidates, regardless of party," to back the FCC net neutrality protections, Fulton countered. "We recently launched the Internet 2016 campaign where we encourage voters, and candidates, to consider open Internet issues as top priorities in the upcoming election."

Litigation is the next development that “could shake things up politically,” helping or hurting a deal’s prospects, Szoka said. He suggested Democrats have an advantage in negotiating now due to the “veil of ignorance” on the makeup of the three-judge panel for the U.S. Court of Appeals for the D.C. Circuit reviewing the USTelecom v. FCC net neutrality order challenge. If the panel of judges, likely to be revealed 30 days before the Dec. 4 oral argument, features one or even two strong conservatives, that would add incentive for Democrats but also could inspire Republicans to resist legislation -- for the sake of legislation, the ideal would be a panel that’s neither too liberal nor too conservative, Szoka said. There is a window of about six weeks through September and October for prime negotiation, with the issue likely “more politicized” by late October, he believes. Net neutrality could come up in presidential debates and be a bigger source of fundraising by then, he said. Szoka pointed to oral argument as the next potential turning point of influence.

Some Commerce Committee members, both Democrats and Republicans, have told us they’re supportive of legislative compromise on net neutrality (see 1506240037). Nelson and Schatz warned about the FY 2016 FCC funding package, which includes a policy rider prohibiting FCC broadband rate regulation, could threaten bipartisan negotiation on a net neutrality deal within Commerce (see 1507230061). There is no equivalent negotiation ongoing among House lawmakers, and top House Republicans have said legislation is stalled for now. Some House Democrats may be interested in legislation and are “just waiting for action on the Senate side,” said Szoka. “If the Senate moves something, they will be relieved.”