O'Rielly Targets All State Net Neutrality Actions, Says Procurement Duties 'Slightly Closer Call'
FCC Commissioner Mike O'Rielly objects to state net neutrality actions beyond California's new law, which DOJ challenged (see 1809210059). "All of them are problematic," he said Tuesday, acknowledging state net neutrality requirements for government procurement are a somewhat "harder case." Briefing reporters and answering questions, O'Rielly slammed as "crazy" the idea government must maintain four national wireless providers, called the FCC's administrative law judge review process "awful," and addressed a 3.5 GHz draft order (see 1810020050).
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O'Rielly said states and localities can't impose net neutrality laws or regulations inconsistent with the FCC's "light-touch" approach to broadband as a Communications Act Title I interstate information service. “While California is the one that DOJ has filed suit on, I’m just as troubled by the rest of the states that have entered this space," he said. It's "not true" the FCC abdicated its regulatory role, leaving states to fill the gap, he said: "We said it is a Title I service. That doesn’t mean it’s not regulated; it’s regulated lightly. ... We haven’t thrown our hands up. We haven’t said it’s free game for states to act. It’s just the opposite."
State net neutrality duties on government contractors "are a slightly closer call," but "incredibly problematic," O'Rielly said: "We’ll just have to see if a court treats it differently. I’m not sure that our reach goes as far as the procurement issue, so I think that’s a little bit tougher case to make." He's "open" to an FCC declaratory ruling to clarify the agency's procurement view: "I'm against states acting on this."
The FCC should declare texting, VoIP and other internet applications Title I services and pre-empt where necessary, O'Rielly said. He said localities shouldn't be able to impose franchise fees and duties on streaming services. Though it will be "hard" on franchising authorities to see their revenue "shrink," local internet regulation isn't viable under current law or practical in a global market, he said. He said it's up to Congress to decide on possible edge regulation. European regulators are "out to get" U.S. tech companies with taxes and regulation because of their size and success, he said.
O'Rielly opposed requiring an "artificial number" of national wireless providers. "It may be that four is right; it may be that three is right," he said, citing "incredibly bad policy" by the last administration: "I thought that [previous FCC Chairman] Tom Wheeler was off his rocker ... to argue that it has to be four. There are many segments of the U.S. economy that don’t have four that are quite competitive." Wheeler's FCC and the then-DOJ resisted a possible T-Mobile/Sprint combination. Wheeler emailed Tuesday, "Some things never change. There is no need to respond. The facts speak for themselves."
Behavioral conditions for mergers aren't necessarily bad, but they must be tied to a transaction's specifics not "to make people feel good," O'Rielly said. He suggested company commitments made to gain government approval, "wink, wink," could become unjustified requirements. He hailed U.S. antitrust policy generally and said he wouldn't change a "consumer welfare" standard flippantly.
O'Rielly expects the FCC to begin a media ownership quadrennial review this year, which he hopes can be concluded in early 2019. He also hopes the agency will act separately on its national broadcast TV cap. He said many broadcast ownership rules are outdated and doesn't believe there should be a national TV cap, though he's open to proposals for a limit.
The ALJ process for reviewing mergers and disputes is "completely broken," O'Rielly said. He didn't want to comment on any specific deal, but said every day there's no ALJ decision on Sinclair/Tribune despite its application withdrawal "proves he's right." He repeatedly called the situation "awful," subsequently clarifying he was referring to the ALJ process.
O'Rielly is hopeful both the FCC and executive branch will overhaul "Team Telecom" (DOJ, DOD and Department of Homeland Security) reviews of foreign takeovers of U.S. communications companies and assets.
O'Rielly said he's focused on developing kidvid rules that "protect" children reliant on over-the-air TV, give broadcasters flexibility and are "mindful" of giving new market players opportunities but not "rate of return" guarantees. He said it's "premature" to opine on an FCC proposal to ban resellers from the Lifeline program, despite near-universal opposition. He's willing to give staff some "leeway" on implementing a Ray Baum's Act mandate to consolidate reports. Amid the planned presidential alert test Wednesday (see 1810020039), he wishes issues that arose in a Washington, D.C., regional test were resolved before doing a national test.