FCC Reform

A Republican effort to reauthorize the Federal Communications Commission for the first time in 27 years has network neutrality advocates nervous as they worry that stronger congressional control over the agency would hamper its oversight of internet providers. In proposing a discussion draft at a hearing in July on the reauthorization of the agency, House Communications Subcommittee Chairman Marsha Blackburn (R-TN), said it was necessary “to restore a culture of humility that was lacking” at the commission under its previous leadership. There have been efforts to reauthorize the agency since 1990, including one in 2016, but none have passed. Now, the reauthorization of the FCC is “at the top of the list” after lawmakers return from the August recess, Senate Commerce Committee Chairman John Thune (R-SD) said.

The most recent move to reauthorize the FCC has net neutrality supporters suspicious. Gigi Sohn, who was counselor to then-FCC Chairman Tom Wheeler, said the draft bill appears to be punishing the FCC for implementing the 2015 Open Internet Order.

[Commentary] Commissioner Carr of the Federal Communications Commission should lead the drive to bring the FCC into the 21st century by adopting necessary and recognized reforms. Fortunately there is already a blueprint on the shelf created some 20 years ago by Democratic Chair Bill Kennard which proposed mirroring the Federal Trade Commission’s structure with greater focus on competition, consumer protection and economics. This common-sense plan is a natural part of the evolution of a telecom regulator, which by design should support the transition the market from monopoly to competition, not invent new things to regulate in an attempt to be relevant.

Over the years, the FCC has created tasks and functions for itself that are duplicative, if in not in conflict with many other government agencies.Reversing this trend won’t be easy, but reorienting the FCC’s mission around economics is a good first step that will help grow the economy, create jobs, and spur innovation. Carr should take the lead to modernize the agency.

[Roslyn Layton is a Visiting Fellow at the Center for Internet, Communications and Technology Policy at the American Enterprise Institute.]

On August 3, the passed the following technology and telecommunications bills:

1. S. 19, Making Opportunities for Broadband Investment and Limiting Excessive and Needless Obstacles to Wireless Act (MOBILE NOW Act), Legislation to increase spectrum availability for next-generation gigabit wireless services and foster broadband deployment. Sponsors: Sens. John Thune (R-SD), Bill Nelson (D-FL)
2. S. 96, Improving Rural Call Quality and Reliability Act of 2017, Legislation to require the FCC to establish quality and reliability standards for rural phone networks. Sponsors: Sens. Amy Klobuchar (D-Minn.), John Thune (R-SD), Jon Tester (D-MT)
3. S. 123, Kari’s Law Act of 2017, Legislation initiated after the murder of Kari Hunt in a hotel in Marshall, Texas, when Hunt’s daughter tried to call 911 but was unsuccessful due to a required “9” prefix on the hotel phone. This legislation bans the requirement of a prefix when dialing 911 for assistance. Sponsors: Sens. Amy Klobuchar (D-MN), Deb Fischer (R-NE), Brian Schatz (D-Hawaii), John Cornyn (R-Texas), John Thune (R-SD), Ted Cruz (R-Texas)
4. S. 134, Spoofing Prevention Act of 2017, Legislation to stop the transmission of misleading or inaccurate caller ID information, including such calls and text messages originating overseas. Sponsors: Sens. Bill Nelson (D-Fla.), Deb Fischer (R-Neb.), Amy Klobuchar (D-MN), Roy Blunt (R-MO)
5. S. 174, Federal Communications Commission Consolidated Reporting Act of 2017, Legislation to require the FCC to condense duplicative reports on competition in the telecommunications market into one comprehensive report released every two years. Sponsors: Sens. Dean Heller (R-NV), Brian Schatz (D-Hawaii)
6. S. 88, Developing Innovation and Growing the Internet of Things Act (DIGIT Act), Legislation to bring together private sector and government entities to assess the needs of the Internet of Things (IoT) and study the readiness of government to support the IoT. Sponsors: Sens. Deb Fischer (R-NE), Cory Booker (D-NJ), Cory Gardner (R-CO), Brian Schatz (D-Hawaii)

The House Commerce Committee’s Communications and Technology Subcommittee held a hearing on July 25, 2017. Lawmakers came to talk Federal Communications Commission oversight; they came to talk FCC oversight; but as with most telecommunications policy discussions these days, network neutrality grabbed the headlines.

Full Committee Chairman Greg Walden (R-OR) announced that he will hold a hearing on September 7 entitled “Ground Rules for the Internet Ecosystem.” He sent invitations to CEOs of leading tech companies -- including Facebook, Alphabet, Amazon, and Netflix -- and broadband providers -- including Comcast, Verizon, AT&T, and Charter Communications -- requesting they testify.

“A strong consensus is forming across party lines and across industries that it’s time for Congress to call a halt on the back-and-forth and set clear net neutrality ground rules for the internet,” said Chairman Walden. “In some form or another, we have been working for at least 20 years on the intertwined goals of incentivizing the huge investments needed to connect Americans, while keeping the internet open and protecting consumer privacy. With almost everyone in agreement about fundamental principles to prevent anti-competitive behavior such as throttling and blocking, I think we are closer than ever to achieving a lasting resolution. The time has come to get everyone to the table and get this figured out.”

In a letter requesting their appearance, Chairman Walden said the open internet rules put in place during the Obama administration — which subject broadband providers to utility-like regulation — “disrupted the longstanding regulatory balance that for years allowed the internet to grow and thrive.” He added, “With your help, I know we can craft a fair, predictable and sustainable solution that not only benefits edge providers and internet service providers, but also the billions of consumers worldwide that deserve a free and open internet.”

Chairman Walden is joined by his counterpart in the Senate, Commerce Committee Chairman John Thune, in a desire to adopt legislation that will end the net neutrality debate.

But these lawmakers so far have offered few specifics, and for the moment, they don’t have much Democratic support. Many in that party have rallied to save the FCC’s existing rules, preferring the Obama administration’s approach. Sen Cory Booker (D-NJ), for example, fears that any attempt to tackle net neutrality with Republicans in charge of the White House and Congress will result in rules that are too weak — and give broadband internet access service providers too much power to tamper with internet traffic.

In her opening remarks at the hearing, Subcommittee Chairman Marsha Blackburn (R-TN) bristled at the suggestion that Republicans are opposed to network neutrality. "Let me be clear. Republicans have always supported a free and open internet." We are trying to "restore the culture of humility lacking under the regulatory cloud left” by former-FCC Chairman Tom Wheeler. She said it was time to move past partisan rhetoric and pass legislation clarifying net neutrality oversight. Subcommittee Vice Chairman Rep. Leonard Lance (R-NJ) agreed and said there was common ground on the need for net neutrality and added that a light-touch approach has strong support.

Subcommittee Ranking Member Mike Doyle (D-PA) pointed to the over 12 million net neutrality comments in the FCC's public file as evidence that there was nothing wrong with the FCC's current net neutrality rules. He said the rules are working and to roll them back would hurt small business and "regular people." Rep Anna Eshoo (D-CA) agreed and said the FCC is barreling down the road toward eliminating critical protections and making it clear that start-ups and small business input is not as valued as special interests. “If the FCC moves ahead with its net neutrality plan the consequences will be severe,” said Rep. Frank Pallone (D-NJ), the ranking member of the full House Commerce Committee. “Their plan will have a chilling influence on our democracy, cut away at our connections with each other, and limit economic opportunities for the future.”

Morning Consult reports that the key takeaway from the hearing is that Democratic and Republican members of Congress both support net neutrality — they just have different definitions for the term.

Chairman Walden asked all the FCC commissioners if they support net neutrality. Chairman Pai said he favors “a free and open internet.” But Rep. Anna Eshoo (D-CA) took issue, telling him that his chairmanship “rests on the altar of dismantling net neutrality as we know it.”

“With all due respect to you, I don’t think it’s a credible statement to say that you support it,” she added.

FCC Commissioner Mignon Clyburn said that maintaining classification of broadband services under Title II of the Communications Act will ensure competition and drive greater service availability. “Taking away Title II for broadband undercuts our ability to ensure universal service for broadband by taking away our clearest source of authority to make sure all Americans are connected,” Commissioner Clyburn said. “Undoing our classification of broadband as a Title II service also harms the FCC’s ability to enable competition. There is specific authority in sections 224 and 253 of the Communications Act that allows the FCC to enable competitive access to monopoly infrastructure, and to remove other barriers to competition. Without Title II, it will be far more difficult for the Commission to enact policies to enable competition.” Commissioner Clyburn also pointed to how Title II helps to ensure privacy.

“We adopted rules of the road for broadband privacy last October and they were stripped away earlier this year with the passage of the Congressional Review Act (CRA) resolution of disapproval which means today, there are no comprehensive rules on the books protecting broadband consumer privacy for Americans,” Commissioner Clyburn said.

But FCC Commissioner Michael O'Rielly said “the term net neutrality means so many different things these days than it once did.”

GOP lawmakers presented themselves as advocates of the concept of net neutrality, while simultaneously targeting the 2015 Open Internet Order which reclassified broadband Internet access service as a Title II service. Chairman Blackburn, for example was drawing a distinction between supporting a rollback of the net neutrality protections and the idea that such a move would limit internet access for users, saying that “Republicans have always supported a free and open internet.” Republicans say net neutrality limits investment and growth of internet service providers, while advocates say a rollback of the Obama-era regulation would allow ISPs to throttle, block or slow connectivity. Their argument echoed one that has been used by ISPs like Comcast and Verizon.

“Everybody says they’re for an open internet,” said Rep. Peter Welch (D-VT). “The question I have is: Why change the existing regime where everyone agrees that there is an open internet?”

Past network neutrality, the hearing considered a discussion draft reflecting, among other things, the Commerce Committee’s ongoing efforts to improve the FCC’s process and transparency. Here’s some quick notes:

1. Chairman Pallone questioned Chairman Pai about decisions that have favored Sinclair Broadcast Group. He asked if the Trump Administration has tried to influence these actions. Chairman Pai answered that the White House has not contacted him about the proposed merger of Sinclair and Tribune or the FCC's decision to restore the UHF discount, which helped pave the way for that deal.
2. Commissioner Clyburn criticized FCC Chairman Ajit’s Pai decision to allow Sinclair to purchase of Bonten's seven stations. She told the subcommittee that she was kept in the dark about the bureau-level decision, which, she suggested, was hardly in keeping with Chairman Pai's promise for more transparency.
3. Chairman Pai warned the subcommittee that unless Congress authorizes more money, broadcasters will have to pay some portion of their post-incentive auction repack expenses. FCC Commissioner Michael O’Rielly testified that it may be a little early to declare the $1.75 billion post-auction repack fund insufficient.
4. Chairman Pai said that if the facts warrant and the law allows it, the FCC will be aggressive about freeing up TV band white spaces for rural broadband.

In what is being billed as a bicameral effort, a group of Republican Sens and Reps—including Senate Judiciary Committee Chairman Chuck Grassley (R-IA), have introduced a bill, the Separation of Powers Restoration Act, that takes aim at the Chevron deference accorded federal agency expertise. “For too long, unelected bureaucrats have relied on Chevron to expand their own authority beyond what Congress ever intended. This has weakened our system of checks and balances and created a recipe for regulatory overreach," said Chairman Grassley of the bill. "The Constitution’s separation of powers makes clear that it is the responsibility of Congress, as the People’s representative, to make the law. And it’s the job of the courts—not the bureaucracy—to interpret the law. This bill helps to reassert those clear lines between the branches. By doing so, it makes the government more accountable to the People and takes a strong step toward reining in the regulators.”

The bill would only tweak the language in the US code on judicial review of agency actions, but it makes a big difference. The issue of Chevron has often come up regarding how the Federal Communications Commission exercises its regulatory authority. Chevron is the deference that has been accorded agencies—per Supreme Court precedent—to interpret vague statutes.

Congressional Democrats are calling on the Federal Communications Commission to review its cybersecurity protocols following a May cyberattack that knocked the agency’s commenting system offline, and ahead of online activism in support of net neutrality.

Ranking House Democrats on two committees —Commerce and Oversight, as well as their relevant subcommittees — first sent a letter to the three FCC commissioners on June 26, expressing their concerns about the agency’s cyber preparedness and the attack’s impact on net neutrality comments. “Recent events have raised questions about the security of the FCC’s network, and we have serious concerns that the FCC’s website failures deprive the public of opportunities to comment on net neutrality — an issue that affects everyone who uses the internet,” the six Democrats wrote. The same six Democrats followed up with a letter to the Government Accountability Office on July 7 that asked the office to examine the FCC’s “information technology and information security practices.”

The House Appropriations Committee June 28 released a draft measure that would cut the Federal Communications Commission’s budget to the level sought by the White House. The committee proposed in its draft fiscal 2018 Financial Services and General Government Appropriations bill to make $322 million available to the FCC for fiscal 2018. That’s the funding level President Donald Trump requested in May, down 5.2 percent from fiscal 2017. Under the stripped-down budget, the FCC envisions cutting over 100 agency jobs.

FCC Chairman Ajit Pai said in a June 20 Senate Appropriations subcommittee hearing that the cuts will drive greater efficiency and reduce regulatory costs for the industries the agency oversees. The FCC raises the money for its congressionally set budget by collecting fees. Democratic Commissioner Mignon Clyburn said in the hearing that the staffing and resource cuts could compromise the FCC’s “core mission of protecting consumers, advancing competition, and ensuring the reliability and resiliency of public safety communications.”

Federal Communications Chairman Ajit Pai told members of the Senate that the Commission is moving ahead with cost-cutting initiatives that are already on track to save $1.1 million annually. But while Chairman Pai touted efforts to slash costs, Commissioner Mignon Clyburn said the FCC is operating with a skeleton crew of employees, noting staffing levels are at their lowest point in 30 years.

While efficiencies have been created in some departments, the reduced staffing has forced other employees to double their workloads, often with little or no change in compensation, she said. Commissioner Clyburn noted a recent Federal Employee Viewpoint Survey showed nearly 40 percent of FCC employees feel they don’t have enough resources to get their jobs done. Further budget cuts will exacerbate this crunch, she said, which will be a big problem in terms of allowing the FCC to carry out its function.

[Commentary] In order for us to expand prosperity and extend economic opportunity to more Americans, we must remain on the cutting edge. This means that government at all levels must focus on removing barriers to innovation and ensuring that technological advances aren’t strangled by bureaucratic red tape.

For starters, we’re taking aggressive action to speed the roll-out of next-generation wireless networks. But to get to the 5G future that will make the Internet of Things fully possible, we’ll need much more infrastructure than what today’s networks demand. If America is to lead the world in 5G, we need to modernize our regulations so that infrastructure can be deployed promptly and at scale. Another Federal Communications Commission priority has been making the agency more agile and responsive.

Federal Communications Commission Chairman Ajit Pai said the commission can do more with less—102 fewer full-time employees, for example—and his budget reflected that philosophy while still being able to serve the FCC's core mission of protecting the public interest and closing the digital divide. Chairman Pai, joined by Commissioners Mignon Clyburn and Michael O'Rielly, testified on the FCC's budget before the Senate Appropriations Committee's Subcommittee on Financial Services and General Government.

The FCC has asked for about $322 million, 5.2% less than the previous year, even though the FCC's budget has been flat since 2009. Chairman Pai conceded it was a challenge to do more with less but that the FCC had rolled up its sleeves. And while he said past chairmen had pointed out that the FCC is fully funded by fees charged to licensees, he also remembered—and more than one legislator reminded him—that someone was paying that fee, including businesses big and small and the consumers to whom those fees were passed along. Chairman Pai said that even with fewer people, the FCC had more than doubled the number of items it was dealing with at its public meetings—saying the average was not 5.83 items vs. 2.58 under his predecessor. He cited a number of cost savings as well, from closing an off-site warehouse to cutting down on the number of printers and copying machines.