While NCTA and Republican Florida Gov. Rick Scott joined those arguing that a Title II Communications Act net neutrality approach could lead to billions of dollars in state and local tax and fee increases on consumers, telecom attorneys and other advocates differed whether that would actually happen. That is partly because broadband may be considered an interstate service not subject to state and local tax, they said in interviews.
Communications Act Title II opponents seized on a Progressive Policy Institute study’s estimate Monday that reclassifying broadband would create $15 billion nationally in new federal, state and local taxes and fees, and predicted it would dampen public enthusiasm for basing net neutrality rules on Title II. The “sleeping giant has been awakened, and once the size of the fee increases becomes more widely understood, I think consumers will react,” said Free State Foundation President Randolph May.
The Supreme Court should reverse the 10th U.S. Circuit Court of Appeals’ May decision upholding the FCC’s requirement that USF recipients provide broadband, U.S. Cellular said in a petition for writ of certiorari. Beyond dealing with the broadband obligations of USF recipients as the FCC is about to consider increasing minimum broadband speeds to receive CAF funding (see 1405270054), the petition filed last week asks the court to decide whether the agency has authority under Communications Act Section 706 to regulate broadband. That could affect the net neutrality debate, said Eckert Seamans attorney Earl Comstock, who as a Senate staffer helped draft the Telecom Act.
Broadband remains the “elephant in the room” as the FCC’s Federal-State Joint Board on Universal Service examines possible recommendations for changing the USF contributions methodology, said Universal Consulting consultant Billy Jack Gregg during a NARUC panel discussion Monday. Former FCC Commissioner Harold Furchtgott-Roth said that contribution changes should bring contribution rules in line with the statute, but said he’s unsure if requiring USF contributions on broadband services is a “survivable” approach. The issue could become moot if the FCC chooses to pursue Title II reclassification as part of its net neutrality NPRM, as that would automatically bring broadband under the USF umbrella, Furchtgott-Roth said. National Association of State Utility Consumer Advocates Counsel David Bergmann said he believes it would be “inequitable” for the FCC to continue to exclude broadband from the USF pool if it pursues Title II reclassification. Retiring Nebraska Public Service Commissioner Anne Boyle said she believes the FCC will be forced to add broadband to the USF pool because of shrinking contributions from other services, but noted that adding broadband would not be akin to taxing the Internet.
In what Communications Act Title II opponents say illustrates a split among progressives on net neutrality, Rev. Jesse Jackson urged FCC Chairman Tom Wheeler at a meeting Thursday not to base rules on Title II, according to an as yet still unposted ex parte notice. Jackson, echoing concerns by minority groups as well as by broadband providers like AT&T, told Wheeler and top agency aides he feared reclassification “would harm investment in broadband infrastructure, which would reduce broadband deployment … in minority communities,” said TechFreedom’s ex parte report on the meeting given to us. The meeting included what one of the participants, Minority Media and Telecommunications Council Vice President Nicol Turner-Lee, called a group of “strange bedfellows” that included net neutrality groups and free market advocates like the Free State Foundation.
The FCC should consider the interests of small broadband providers as it works on net neutrality rules, the Wireless Internet Service Providers Association said in a meeting with FCC Chairman Tom Wheeler last week, according to an ex parte filing posted in docket 14-28 Monday. Many WISPs have small staffs and cannot depend on USF funds for support, said the association. Additional disclosure and reporting requirements would create a substantial burden for WISPs under either Title II or Section 706 authority, WISPA said.
The $1.5 billion increase in E-rate’s funding cap that FCC Chairman Tom Wheeler will propose in an NPRM to be circulated in time to be voted on at the FCC's Dec. 11 meeting immediately ran into partisan opposition. Commissioner Ajit Pai said in a statement that a potential increase on phone bills by up to 16 cents a month, as Wheeler estimated his proposal could cost, would "burden" struggling families. Commissioner Mike O’Rielly said in a statement that he was “disheartened” by the proposal and predicted the commission will disastrously” impose USF fees on broadband. At a speech to the U.S. Chamber of Commerce, O’Reilly asked for ideas on how to “push back” against Wheeler’s proposal.
Top telecom issues set for discussion at NARUC’s annual meeting this week in San Francisco include states’ authority under Communications Act Section 706, 911 reliability, the USF contribution base and municipal broadband, NARUC members said in interviews.
Going into more detail about the issues he sees facing a Title II approach than he has said publicly, FCC Chairman Tom Wheeler told public interest advocates that the agency would have to grapple with its legal authority to impose net neutrality rules on wireless, given a section of the Communications Act that some say prohibits treating mobile as common carriers, said three people who attended the Nov. 10 meeting. Wheeler also raised questions about the impact reclassification would have on privacy, according to the attendees, as well as an issue commissioners Mike O'Rielly and Ajit Pai brought up Friday at a Free State Foundation panel discussion on net neutrality: Would broadband providers have to begin paying into the USF?
Sen. Mark Begich, D-Alaska, officially lost his re-election bid. Begich had held out hope for several days after last week’s midterm elections in the race against Republican challenger Dan Sullivan, but the race was called in Sullivan’s favor. Sullivan declared victory Wednesday. Begich is a member of the Communications Subcommittee and has actively pursued issues of broadband deployment and USF rules. His loss means the GOP has gained at least eight Senate seats, further strengthening the party’s majority in the next Congress.