The rancor in Washington over network neutrality is about to enter a new phase: all-out political and judicial warfare. Federal Communications Commission approval today of ambitious new regulations for Internet service has triggered a heated debate over the government’s role in regulating cyberspace—providing ample fodder for an empowered Republican Party as it prepares to take control of the House next month.
The rules were adopted on a 3-2 partisan vote, with the agency's three Democrats backing passage and the two Republican commissioners strongly opposed. The regulations are designed to ensure that the Internet is not dominated by major telecommunications and cable companies. They prohibit anti-competitive blocking and degrading of competing online services and are enforceable by the agency.
Dismissing the regulations as an unnecessary government intrusion in the marketplace, Republicans in both chambers vowed to try to block them, while industry and watchdog critics sharpened their legal daggers as they made plans to challenge the rules in court.
President Obama touted net neutrality during his presidential bid and is a friend of FCC Chairman Julius Genachowski. He said the decision “will help preserve the free and open nature of the Internet while encouraging innovation, protecting consumer choice, and defending free speech.” Genachowski proclaimed that the vote signals “a very good day” for innovators, consumers, and the Internet’s future. “It is essential that the FCC fulfill its historic role as a cop on the beat to ensure the vitality of our communications networks and to empower and protect consumers of those networks.”
But in an effort to halt the regulations, Senate Commerce Committee ranking member Kay Bailey Hutchison, R-Texas, announced that she will introduce a “resolution of disapproval” under the Congressional Review Act, which gives Congress a limited amount of time after a federal agency issues a rule to review it and pass a resolution to block it. “We have an Internet that is working. It does not need the heavy hand of government,” she said during a floor speech. Asserting that Congress must take a stand, she added: “We have not delegated this authority to the FCC.”
"Today is a sad day for innovation in this country," echoed Sen. John Ensign of Nevada, the ranking Republican on the Senate Commerce Communications Subcommittee. "As the rest of the world forges ahead, the United States will face a technological 'Lost Decade.'” Mocking the agency’s action, Sen. Jim DeMint, R-S.C., said the FCC really stands for “Fabricating a Crisis Commission.”
Also critical was Senate Minority Leader Mitch McConnell, R-Ky., who called net neutrality “a first step in controlling how Americans use the Internet by establishing federal regulations on its use.” He added: “This would harm investment, stifle innovation, and lead to job losses.”
On the House side, presumptive Speaker John Boehner, R-Ohio, said that bureaucrats should not be regulating the Internet. “The new House majority will work to reverse this unnecessary and harmful federal government power grab next year,” he vowed.
Prominent GOP members pledged to pursue a similar resolution to Hutchison’s and use other avenues to block the rules. In a conference call, incoming Energy and Commerce Chairman Fred Upton, R-Mich., said his panel’s first hearing next year will be on this topic, with more sessions to follow. Upton spoke along with incoming Energy and Commerce Communications Subcommittee Chairman Greg Walden, R-Ore. “We are going to be exploring every option to try to reverse this order,” Upton said. The lawmakers noted that there is bipartisan opposition to the FCC’s rules.
National Journal reported earlier today that Verizon, the nation’s second-largest telecommunications carrier, may sue the FCC in an effort to overturn the rules. In a statement, the company said it was “deeply concerned” by the new framework, which it said would “yield continued uncertainty for industry, innovators, and investors.”
“Lawsuits could come from both sides: companies that feel the FCC has gone too far and entities that don’t think the FCC went far enough,” Jeff Silva, a telecom analyst with Medley Global Advisors, said in an interview. During a press conference, Genachowski said he’s confident that legal challenges would fail. “We have a legal basis for the rules we adopted today that is very strong, that gives us the authority we need, and I’m confident we’ll win in court,” he said.
The commission’s action received some qualified praise from powerful Democrats, including Senate Commerce Chairman Jay Rockefeller of West Virginia. “While many champions of the open Internet would have preferred a stricter decision—and I myself have real reservations about treating wireless broadband differently from wired broadband—I think today's decision is a meaningful step forward,” he wrote. Critics have complained that the rules are weak for wireless carriers even though Americans are fast gravitating to mobile broadband service.
House Energy and Commerce Chairman Henry Waxman, D-Calif., said the FCC’s action represents a floor, not a ceiling. “If the rule’s protections prove insufficient and consumers and innovation suffer, they will need to be strengthened, and I will vigorously support that effort,” he said in a statement.
But there also was criticism from the left. Sen. Al Franken, D-Minn., dismissed the safeguards as “inadequate” to protect consumers or preserve the free and open Internet. He’s particularly disappointed that the rules permit Internet toll lanes for companies willing to pay for faster transmissions—under limited circumstances—and decried what he sees as insufficient protections for mobile service.
Rep. Edward Markey, D-Mass.., former chairman of a powerful House subcommittee that shapes telecom policy, had a mixed reaction, saying the new rules don’t contain everything he wanted. “Still, it does represent a step forward in the process of preserving the Internet as a vibrant marketplace.”
Several prominent watchdogs, including Free Press and Public Knowledge, complained that the agency missed its opportunity to fully preserve the Internet’s much-heralded openness. In an interview, Andrew Schwartzman, senior vice president and policy director for the Media Access Project, said the public-interest law firm is “very displeased” with the rules and might sue the FCC “over its failure to adequately cover wireless services” under the restrictions. He thinks there’s a “good chance” the entire plan will be overturned in court because the FCC “has used the wrong legal authority on which to base this.”
Addressing the concerns about mobile carriers, Genachowski emphasized to reporters that wireline and wireless services are different, with the latter facing unique congestion challenges that require more flexibility in managing traffic on networks.
Industry reaction, meanwhile, was mixed, with some key supporters of an earlier version of Genachowski’s plan—including AT&T and CTIA, the main wireless industry association—reserving final judgment until they’ve seen the fine print about the newly adopted rules.
“Though a final view must await a careful reading of the FCC’s order, we believe the Chairman’s compromise can provide . . . certainty while taking steps to preserve flexibility for investment and innovation,” AT&T Senior Executive Vice President Jim Cicconi said in a blog post. The U.S. Telecommunications Association said it opposes the expansion of regulatory powers while Comcast and Sprint offered tepid support.
The satellite television provider DISH Network and the Computer and Communications Industry Association said they wish the FCC had gone further, while the Information Technology Industry Council, whose members include Apple, Hewlett-Packard, IBM and Intel, said the regulations would spur investment and innovation.
The FCC's two Democratic commissioners, Michael Copps and Mignon Clyburn, made clear that they’re unhappy with several provisions, including the less stringent rules for wireless carriers.
“To be clear, we do not anchor ourselves on what I believe to be the best legal framework,” Copps told the packed audience in the FCC meeting room. “Nor have we crafted rules as strong as I would have liked. But with today’s action, we do nonetheless appear to steer ourselves back toward a better course.” In his vote, Copps concurred, which is the weakest form of approval. Clyburn approved in part and concurred in part, while Genachowski cast a yes vote.
The FCC met amid heavy police security both inside and outside the agency, as the debate over the future of the Internet drew national attention on the Drudge Report and elsewhere in the media during the run-up to the vote.
The agency’s two Republicans were blunt in their negative assessments of the effects of the new regulations, warning that the rules amount to government overreach, could dissuade investment and could encourage other countries to tighten their control over the Web. “Not only is today the winter solstice, the darkest day of the year, but it marks one of the darkest days in recent FCC history,” Commissioner Robert McDowell, the agency’s senior GOP member, said in a lengthy denunciation. “The FCC is capable of better—today is not its finest hour.”
Echoing the sentiment, Meredith Attwell Baker said she fears that the government will now play “too big a role” in shaping tomorrow’s Internet. “The FCC literally has no power to act until and unless Congress gives it power.”