Republicans and Telecom CEOs Threaten Legal War If FCC Makes the Internet a Utility

The FCC chairman is under pressure from liberal advocacy groups to apply stronger regulations to the Internet.

Computer users are pictured in an internet cafe in Istanbul on September 3, 2009 where governmental censorship has banned websites including the video sharing site YouTube. Prohibited since 2007 YouTube remains in the top five most visited internet sites in Turkey. AFP PHOTO / UGUR CAN (Photo credit should read UGUR CAN/AFP/Getty Images)
National Journal
Brendan Sasso
May 14, 2014, 9:31 a.m.

Lib­er­al ad­vocacy groups are beg­ging the Fed­er­al Com­mu­nic­a­tions Com­mis­sion to turn broad­band In­ter­net in­to a heav­ily reg­u­lated pub­lic util­ity. And FCC Chair­man Tom Wheel­er is start­ing to in­dic­ate that he will hes­it­antly, cau­tiously con­sider the op­tion.

The move would give the agency broad­er au­thor­ity to en­act net-neut­ral­ity rules that re­quire In­ter­net pro­viders to treat all traffic equally.

But Re­pub­lic­ans and the broad­band in­dustry have a mes­sage for Wheel­er: Don’t even think about it.

In re­cent days, top con­gres­sion­al Re­pub­lic­ans and the CEOs of every ma­jor broad­band pro­vider have sent let­ters mak­ing it clear that they would make Wheel­er’s life hell if he re­clas­si­fies how the gov­ern­ment reg­u­lates the In­ter­net.

House Speak­er John Boehner, Ma­jor­ity Lead­er Eric Can­tor, Whip Kev­in Mc­Carthy, and GOP Con­fer­ence Chair­wo­man Cathy Mc­Mor­ris Rodgers warned Wheel­er on Wed­nes­day that ap­ply­ing “an­ti­quated reg­u­la­tion on the In­ter­net” would “need­lessly in­hib­it the cre­ation of Amer­ic­an private-sec­tor jobs, lim­it eco­nom­ic free­dom and in­nov­a­tion, and threaten to de­rail one of our eco­nomy’s most vi­brant sec­tors.”   

In a sep­ar­ate let­ter Tues­day, Sen­ate Minor­ity Lead­er Mitch Mc­Con­nell, Sen. John Thune, Sen. John Cornyn, and oth­er Sen­ate Re­pub­lic­ans told Wheel­er that util­ity-style reg­u­la­tions “would cre­ate tre­mend­ous leg­al and mar­ket­place un­cer­tainty and would un­der­mine your abil­ity to ef­fect­ively lead the FCC.”

In­dustry groups are fir­ing sim­il­ar warn­ing shots at the agency.

In a Tues­day let­ter, the CEOs of Com­cast, Ve­r­i­zon, Time Warner Cable, AT&T, and all of the oth­er ma­jor broad­band pro­viders ar­gued that turn­ing their busi­nesses in­to util­it­ies would “im­pose great costs, al­low­ing un­pre­ced­en­ted gov­ern­ment mi­cro­man­age­ment of all as­pects of the In­ter­net eco­nomy.” The new rules would stifle in­vest­ment, “hold­ing back In­ter­net speeds and ul­ti­mately deep­en­ing the di­git­al di­vide,” they claimed.

{{ BIZOBJ (video: 4950) }}

The ex­ec­ut­ives hin­ted that they are ready for an all-out leg­al war over the is­sue. They said it’s “ques­tion­able” that the FCC could de­fend re­clas­si­fic­a­tion in court and warned that the agency would face “years — if not dec­ades — of end­less lit­ig­a­tion and de­bate.” The Na­tion­al Cable and Tele­com­mu­nic­a­tions As­so­ci­ation and U.S. Tele­com, two in­dustry lob­by­ing groups, made sim­il­ar threats of lit­ig­a­tion in their own let­ters Wed­nes­day.

Lib­er­al groups are ur­ging the FCC to clas­si­fy broad­band as a “com­mon car­ri­er” util­ity un­der Title II of the Com­mu­nic­a­tions Act be­cause it would give the agency more reg­u­lat­ory power. Earli­er this year, the D.C. Cir­cuit Court of Ap­peals struck down the FCC’s net-neut­ral­ity rules be­cause the agency re­lied on weak­er au­thor­ity un­der Title I.

Wheel­er is now try­ing to re­work the rules un­der their ex­ist­ing au­thor­ity without re­clas­si­fy­ing the In­ter­net. But to have any hope of sur­viv­ing fu­ture court chal­lenges, he has had to wa­ter down the old rules.

His net-neut­ral­ity pro­pos­al, set for a pre­lim­in­ary vote Thursday, would bar In­ter­net pro­viders from block­ing any web­sites. But the pro­viders could charge web­sites for spe­cial “fast lanes” as long as the agree­ments are “com­mer­cially reas­on­able.”

The pro­pos­al, which first leaked out last month, has promp­ted an out­pour­ing of pub­lic an­ger. El­ev­en Sen­ate Demo­crats, led by Ron Wyden of Ore­gon, sent a let­ter last week, warn­ing that the pro­pos­al would “al­low dis­crim­in­a­tion and ir­re­voc­ably change the In­ter­net as we know it.”

“Small busi­nesses, con­tent cre­at­ors and In­ter­net users must not be held host­age by an in­creas­ingly con­sol­id­ated broad­band in­dustry,” the Demo­crats wrote.

More than 100 tech com­pan­ies, in­clud­ing Google, Face­book, Amazon, Mi­crosoft, and Net­flix, also urged Wheel­er to ban paid-pri­or­it­iz­a­tion of In­ter­net traffic.

Mem­bers of the Con­gres­sion­al Pro­gress­ive Caucus have their own let­ter ex­pli­citly call­ing for Title II reg­u­la­tion, say­ing it’s “com­mon sense.”

In re­sponse to the pub­lic out­cry, Wheel­er tweaked his net-neut­ral­ity pro­pos­al to ex­pand a sec­tion ask­ing for com­ment on wheth­er the FCC should use its Title II powers on the In­ter­net. Ad­voc­ates of Title II reg­u­la­tion, such as con­sumer groups Free Press and Pub­lic Know­ledge, ar­gue that the In­ter­net has be­come an es­sen­tial part of mod­ern life — much like oth­er util­it­ies such as wa­ter, elec­tri­city, or the tele­phone. The gov­ern­ment should use its full au­thor­ity to pro­tect the main com­mu­nic­a­tions tool of the 21st cen­tury from ma­nip­u­la­tion by broad­band pro­viders, the groups ar­gue.

A Title II clas­si­fic­a­tion would trig­ger a slew of new rules, in­clud­ing price con­trols and ob­lig­a­tions to provide uni­ver­sal ser­vice. But the FCC can choose to ex­empt In­ter­net pro­viders from some of those re­quire­ments. 

Wheel­er would clearly prefer not to pick a fight with Re­pub­lic­ans and the broad­band in­dustry over the is­sue. But he has re­peatedly said the op­tion is still on the table.

“If someone acts to di­vide the In­ter­net between ‘haves’ and ‘have-nots,’ we will use every power at our dis­pos­al to stop it,” Wheel­er said re­cently be­fore a con­fer­ence of cable ex­ec­ut­ives.

“I con­sider that to in­clude Title II. Just be­cause it is my strong be­lief that fol­low­ing the court’s road map will pro­duce sim­il­ar pro­tec­tions more quickly, does not mean I will hes­it­ate to use Title II if war­ran­ted.”

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