Release of the FCC net neutrality order brought limited clarity to how the rules and the commission’s accompanying reclassification of broadband as a Communications Act Title II service will affect state telecom regulation, state telecom lawyers and observers said in interviews last week. That lack of clarity largely stems from continued uncertainty about whether the net neutrality rules -- and particularly Title II reclassification -- will survive legal scrutiny, lawyers said. Alamo Broadband and USTelecom filed lawsuits Monday seeking reviews of the net neutrality order at the 5th U.S. Circuit Court of Appeals and the U.S. Court of Appeals for the D.C. Circuit, respectively (see 1503230066). The order faces continued scrutiny on Capitol Hill (see 1503200048).
Comments are due April 24, replies May 11 on The Compliance Group’s Jan. 27 petition for a declaratory ruling to clarify the exemption for systems integrators from USF contribution obligations, said an FCC Wireline Bureau public notice Tuesday. It said Compliance wants a clarification on whether the exemption applies to the resale or provision of interconnected VoIP when resold or provisioned by a systems integrator.
The House Republican Study Committee (RSC) embraced the net neutrality vision of House Commerce Committee Vice Chairwoman Marsha Blackburn, R-Tenn. The committee, representing a conservative caucus within the GOP, released a 110-page Blueprint for a Balanced Budget document this week, saying “Congress should repeal the [FCC]’s February 26, 2015 rule reclassifying broadband Internet access as a telecommunication service under Title II of the Communications Act,” basing the idea explicitly on Blackburn’s Internet Freedom Act (HR-1212). House Republican Study Committee Chairman Bill Flores, R-Texas, is an original co-sponsor among HR-1212’s 43 GOP backers. The RSC budget proposal for FY 2016 also would repeal the USF, suggesting a Congressional Budget Office-predicted savings of $96 billion over the coming decade: “Unfortunately, the programs run by the fund -- including the LifeLine program that provides free government-subsidized cell phones -- are too often fraught with waste, fraud, and abuse.” The Lifeline program doesn't give away free cellphones. The RSC proposal also calls for passage of the Permanent Internet Tax Freedom Act and for a reduction of government competition with the private sector, slamming the Obama administration “encouraging local governments to offer broadband Internet service, overriding state laws through regulation and offering incentives in the tax code.” Flores and RSC Budget and Spending Task Force Chairman Marlin Stutzman, R-Ind., claimed credit for the proposal, which they say will balance the budget in six years. Republicans and Democrats on the House Budget Committee are considering warring proposals. Telecom issues also arose last week during a markup session that cleared the House Budget Committee’s GOP proposal. Rep. Donald Norcross, D-N.J., had offered an amendment backed by several other Democrats that would have supported infrastructure investment. It would have found that “the federal government has played a critical role in the development of America’s infrastructure,” including “telephone networks” and “the development of the Internet” and would have included the sense that Congress should “work to ensure that Americans enjoy increased access to high-speed broadband internet services.” It failed in a 14-21 party-line vote.
Net neutrality dominated FCC Chairman Tom Wheeler’s fourth hearing in under two weeks Tuesday, as he faced off against a House GOP appropriator expressing the desire to punish the agency financially for its focus on net neutrality. Wheeler said that the FCC FY 2016 budget request of $388 million largely developed from “unavoidable costs” such as the agency’s proposed move. Commissioner Ajit Pai, as expected (see 1503230067), opposed the budget request and asked Congress to defund the net neutrality order’s execution.
FCC Commissioner Ajit Pai intends to ask Congress to strip the agency of money to execute its net neutrality order, he said in written testimony for a House Appropriations subcommittee scheduled for Tuesday. “Congress should forbid the Commission from using any appropriated funds to implement or enforce the plan the FCC just adopted to regulate the Internet,” Pai plans to testify. “Not only is this plan bad policy; absent outside intervention, the Commission will expend substantial resources implementing and enforcing regulations that are wasteful, unnecessary, and affirmatively detrimental to the American public.” Pai, one of two GOP commissioners, is “unable to support” the FCC’s FY 2016 budget request, he will say.
Congress has “real interest to push back” on the FCC net neutrality order, said House Majority Whip Steve Scalise, R-La. He acknowledged the possibility of legislation substituting the order with one that doesn't reclassify broadband under Communications Act Title II is at “an early stage,” speaking Thursday at a Free State Foundation event. On a day the FCC also faced scrutiny before the House Communications Subcommittee (see 1503190048), the agency came under fire from congressional Republicans at the FSF forum.
Transparency within the House Commerce Committee and at the FCC emerged as the key divisive issue Thursday as FCC Chairman Tom Wheeler took on his third hearing this week. Democrats blasted Communications Subcommittee Chairman Greg Walden, R-Ore., for what they said was a partisan FCC reauthorization draft bill designed to freeze funding at the agency for four years. Republicans harangued the FCC for its process and transparency practices.
Senate Commerce Committee Chairman John Thune, R-S.D., probed FCC members on possible rate regulation under Communications Act Title II reclassification at a Wednesday oversight hearing. “Let’s just say hypothetically that someone files a complaint at the FCC alleging” rates aren’t just and reasonable under Title II Section 201, Thune said, suggesting it could mean possible rate regulation. “That is absolutely right,” Commissioner Ajit Pai said, saying it “opens the door” to “ex post rate regulation.” Commissioner Jessica Rosenworcel said there has been no such complaint.
A draft version of FCC reauthorization legislation would cap the USF at $9 billion a year and freeze FCC funding at its current level for the next four years. House Communications Subcommittee Chairman Greg Walden, R-Ore., circulated the draft Tuesday, including it in the GOP memo for an FCC oversight hearing Thursday with all five commissioners. The reauthorization bill would let the agency adjust its fee schedule and would remove the FCC chairman’s ability to hire or fire its inspector general. “With this reauthorization, we are charting the course to make the necessary reforms to an agency that is ill equipped for the innovation era,” Walden said in a statement. “This bill addresses the commission’s disproportionate FY 2016 budget request, the runaway growth in the Universal Service Fund, and ensures that the FCC’s Inspector General can conduct oversight of the commission without fear of reprisal from a chairman.” The FCC requested $388 million for FY 2016, more than $50 million more than current funding. The GOP memo pointed to net neutrality, customer proprietary network information enforcement action, pre-emption of state municipal broadband restrictions, unfinished dockets, use of delegated authority and transparency as core areas that GOP lawmakers worry about. The memo cited “concerns” with recent testimony from FCC Managing Director Jon Wilkins -- “Mr. Wilkins was unable to provide details on the planned closures and staff re-organization of the field offices. Recent reports from the field indicate that the Commission is planning significant structural changes to its Enforcement Bureau. The Committee is concerned that transparency problems extend further into the budget request.” Wilkins testified that the FCC needs more money for “unavoidable costs” in moving its headquarters and for IT upgrades (see 1503040032). The FCC would receive $339.8 million each year through FY 2020, the draft text said. Walden’s hearing will be Thursday at 11 a.m. in 2123 Rayburn. The FCC declined comment.
Sen. Kelly Ayotte, R-N.H., reintroduced legislation “to provide for the equitable distribution of Universal Service funds to rural States,” as its longer title said. Last Congress, Ayotte introduced the USF Equitable Distribution Act of 2013 (S-1766), which would have ensured that not less than 75 percent of the interstate telecom USF contributions in rural states stay within that state. It never advanced. Ayotte introduced S-734 Thursday. It has no co-sponsors and has been referred to the Commerce Committee, where Ayotte is a member. Its text is not yet online.