Communications Act Rewrite Called Titanic, Necessary Challenge, With Past Attempts Creating Lessons

"You can do telco in a bipartisan way, which is a good thing,” said Rep. Joe Barton, R-Texas, who led the charge as House Commerce Committee chairman with a Communications Act overhaul in 2006 that passed the House but stumbled in the Senate. “Telecommunications policy is doable even in this political environment, if you do it bipartisan.”

"It sure isn’t all going to happen in 2014,” said Democrat Rick Boucher, a former House Communications Subcommittee chairman from Virginia. He said it took stakeholders eight years to update the Communications Act of 1996. Now honorary chairman of the Internet Innovation Alliance, which has members including the American Conservative Union and AT&T, and a partner at Sidley Austin, Boucher said the timing is right for revisiting the act. “Just because it is difficult to legislate does not mean you should avoid trying,” he said.

"It’s such a critical effort, you've got to start sometime,” said Internet and privacy lawyer Howard Waltzman of Mayer Brown, who was House Commerce chief telecom counsel during Barton’s rewrite attempt. “I wouldn’t view it as a failure or frustration if it doesn’t come to fruition in a year or even two years.” Paul Nagle, who in 2006 was Senate Commerce Committee Republican telecom counsel, emphasized the hard work involved. During 2006, “we didn’t have a day where we didn’t work [on it] for a month and a half,” said Nagle, later chief committee counsel and eventually Van Scoyoc Associates lobbyist for several years. “I take it back -- we took Easter off. We ate a lot of pizza, a lot of Chinese."

Republicans Eye 2014

Nagle suspects there will be a ramp-up in committee activity similar to 2006. Boucher commended House Republicans. “This is the classically responsible way to legislate,” Boucher said of the proposed timetable. “It is a step-by-step approach.”

"It’s a lot harder to legislate than it was in 2006,” Barton said, considering a need for Republicans to reach out to House Commerce ranking member Henry Waxman, D-Calif., and Communications Subcommittee ranking member Anna Eshoo, D-Calif. His advice to Walden and Upton: “Work with Henry and Anna because you're going to have a much better product.” He called both Democrats “bright,” reflecting along with former committee Chairman and current member John Dingell, D-Mich., “some real horsepower” on House Commerce, and said they know the issues. “Henry, he’s probably a little more dogmatic,” Barton said, adding that “when Henry is inclined, he can be a great guy to work with.” Waxman recently said he won’t run for re-election this year after 40 years in the House (WID Jan 31 p2).

When Barton attempted a rewrite, Republicans controlled both the Senate and the presidency, unlike now, he observed. In 2014, “there’s less reason for [Democrats] to be flexible,” Barton said.

The Senate is “effectively shut down” these days and action “ground to a halt,” due to the limits Majority Leader Harry Reid, D-Nev., has placed on debate (WID Nov 25 p1) to limit filibusters, said John Sununu, a former Republican senator from New Hampshire who was a Senate Commerce member in 2006. “The challenges in getting leadership to do the bill are greater than ever before.” A rewrite will take commitment in both chambers, and importantly, calendar time on the floor, said Sununu, now honorary co-chairman of Broadband for America, which has members including the American Legislative Exchange Council, Cisco and NCTA, and an adjunct senior policy adviser at Akin Gump. Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., doesn’t seem to have much appetite for a rewrite, understandably given the legislative difficulties, and that political calculus can affect how House leadership will respond, Sununu said. “It’s not something that can be done in half-measures.”

In 2014, there will likely be more white papers and hearings on the House side and a corresponding uptick on the Senate side, “so they maintain their presence in the process,” eventually with draft legislation, Nagle predicted. “As you continue along the arc of that process, the interest of the outside world starts to grow.” More parties will weigh in, “just ratcheting it up,” he said.

"Do some relationship-building between the House and the Senate staffs and among the members,” recommended Lisa Sutherland, who was Senate Commerce’s Republican staff director during the rewrite attempt. She said offices want relationship-building, so even if there’s a contentious issue like net neutrality, “you have some trust built up among the members so they can maybe come up with a compromise to bridge that divide.” Different offices should “have some skin in the game,” with a bill as “inclusive” as possible, added Sutherland, who has lobbied independently on telecom and broadcast issues in the years since working on the Hill.

Lawmakers must also reauthorize the Satellite Television Extension and Localism Act by 2014’s end, and some stakeholders see STELA as a vehicle for updates, such as retransmission consent changes. But “STELA’s very specific” and “time sensitive,” in contrast to a Communications Act update likely requiring years, Boucher said. “I see them moving on different tracks.”

Net Neutrality’s Role

Several issues are ripe for a rewrite, with FCC structure a “leading candidate for reform,” Boucher said. Structurally, the FCC represents “a bygone era,” with “these various bureaus” regulating different services in different ways: “That’s not the way the world is today,” he said. Nagle agreed and pointed to the question of whether the FCC has the legislative direction required for an era of the Internet and big data. Only Congress can truly transform the agency’s structure, Boucher said.

Some “very hard” policy questions will involve net neutrality and whether there should be different rules for wireless and wireline, Nagle said. With net neutrality issues, “you can choose that hornets’ nest or not, as you see fit,” he said. The concerns were recently on display with AT&T’s sponsored data program, where content providers pay for their service data in order to exempt it from inclusion on a user’s data usage tally (WID Jan 9 p4), he said. Nagle predicted the Jan. 14 Verizon v. FCC U.S. Court of Appeals for the D.C. Circuit decision (WID Jan 15 p1) that struck down FCC net neutrality rules will provide a huge boost of momentum for a Communications Act rewrite on the front end, with members and industry more eager to get involved, but the issue has potential to stall a rewrite long term. Boucher called net neutrality a “dominant issue” in 2006 but doubts it would rear its head in any new update. “It’s yesterday’s issue,” he said of the Hill attention to net neutrality. “By and large, it’s been resolved.”

If the House wants to pass a more deregulatory overhaul down the road, without addressing net neutrality, it probably can, but it would be a toss-up if that gets through the Senate, said Sam Whitehorn, Senate Commerce deputy staff director and general counsel for the Democrats in 2006. Congressional statements on net neutrality in 2014 show there “clearly was a divide in how to address” the issue, he said. Broadly speaking, among Republicans and Democrats “there are some philosophical differences” on communications issues, with some favoring more regulation and some less, said Whitehorn, now a McBee Strategic Consulting executive vice president. Congress now is probably more deregulatory in spirit than in 2006, he said.

No single challenge exists, and even simple changes to law can cause established industry interests to “rear their head at any telecom rewrite,” requiring significant political capital to address, Sununu reflected. The top issue, in his mind, is “whether to keep an archaic Title II regulatory infrastructure” as the world shifts to IP, he said. “There’s a lot of people at the FCC who really don’t want to have that conversation.”

In 2014, “technology is a much bigger player in a telecom rewrite,” Nagle said, describing “the beginning of some of the tensions” in the 2006 rewrite attempt and now a “maturation of the tech sector.” He said terminology itself poses a challenge, with definition problems in the Telecom Act. “You've got to be careful in using that same vocabulary,” Nagle said, pointing to Title I information services and Title II common-carrier classification debates and the challenge of members and staffers to “break free of what’s been done before.” There’s been more debate in Congress on some underlying Internet issues, particularly with the controversial Stop Online Privacy Act and the Protect IP Act. “Members will have learned from that,” said Nagle.

Congress may want to “codify” the light-touch regulatory approach to IP-enabled services, Boucher said. The FCC’s two big 2014 focuses will be IP transition trials and broadcast incentive auction preparation, which Congress should watch, he said. Congress may want to address USF updates on the contribution side, potentially adding broadband providers to that mix, he said. Data breaches, high profile due to the recent breach of retailer Target’s records, could prove key territory, Boucher said. “It probably is time to have a national law on this subject.” He criticized the lack of federal law amid many conflicting state laws. Nagle said the business case for these industries affects what drives a bill forward. In the near future, retrans is the first big item to stir the pot, he said. A part of the challenge depends on what Congress wants to take on, with privacy and data security likely issues on the table, Nagle said. Waltzman predicted privacy, data security and cybersecurity will play large roles in a rewrite. He suspects a big debate following the National Institute of Standards and Technology cybersecurity framework release and “vigorous debate over what authority the FCC has over cybersecurity.”

Barton, recalling an a la carte cable amendment that received little attention during his 2006 rewrite process, said such a measure “would get more support” if introduced in 2014, he predicted.

GOP’s 2006 Attempt

"We really want to get a comprehensive telecommunication reform bill to the president’s desk this year,” Barton told State of the Net conference attendees Feb. 8, 2006. “Let’s put the most comprehensive bill out there.”

Waltzman said there was a year and a half of hard work, particularly challenging when it came to making what he called the hard policy cuts. The House had studied the act starting in 2005, going “provision by provision” and passed what was ultimately a “narrower” overhaul than originally imagined, Waltzman said, “because members just weren’t ready to make those policy cuts.”

Then Senate Commerce Chairman Ted Stevens, R-Alaska, introduced a comprehensive update bill with top committee Democrat Daniel Inouye of Hawaii on May 1, 2006, after more than a dozen hearings. “This will be the Communications Act of 2006,” Stevens declared in a floor statement (http://1.usa.gov/1esJiyR). He said an “overarching theme” is encouraging nationwide broadband deployment and provisions allowing municipalities to run networks within limits. He also said the bill had interoperability sections and updates to video franchising law.

Before the 2006 attempt, there were high-level meetings among the “big eight” members from both chambers and parties -- a group that included the late Stevens and Inouye as well as Dingell, Barton, Upton, then-Rep. Ed Markey, D-Mass., then-Sens. John Kerry, D-Mass., and Conrad Burns, R-Mont., and even once Vice President Dick Cheney -- as far back as 2003 and 2004, Sutherland said. They would meet with CEOs from major industry stakeholders such as AT&T, Disney and the MPAA, often over dinner and wine. “People are more likely to come to the same conclusions if they have a common base of knowledge,” she said.

Once the rewrite process began, Whitehorn remembers weekly meetings with Democratic legislative staff and the “unique” Stevens and Inouye relationship: “You had two guys who were best friends.” He recalled a process involving “hundreds and hundreds” of amendments and “long and excruciating and detailed” markups in what was ultimately a “constituent-driven, philosophy-driven” bill. “We really did come close.” Members’ offices “were trying to figure out how to put together a puzzle,” he said. “It’s a very tough puzzle.” A bill that size requires members and staffers “to be intensely organized,” Whitehorn said.

"Every night we'd stay and we'd go through the whole bill, top to bottom,” Sutherland said. She described coming in on weekends and submitting drafts to members and other stakeholders “to get an idea of whether we were on the right track."

Barton’s Communications Opportunity, Promotion and Enhancement (COPE) Act passed the House June 8, 2006, by 321-101. It faced net neutrality battles as an amendment protecting net neutrality sponsored by Markey failed in a 269-152 vote. Markey was especially “hot” on net neutrality, Barton recalled. Boucher voted for both the bill and Markey’s amendment. The House’s top Republicans and Democrats of today were divided then on that issue, with current House Speaker John Boehner, R-Ohio, voting no on the net neutrality amendment, along with Upton and Walden; among Democrats, Minority Leader Nancy Pelosi, D-Calif., voted yes, along with Waxman and Eshoo. This year, Waxman, Eshoo and Markey introduced legislation to restore FCC net neutrality rules, the ones the D.C. Circuit vacated in January (WID Feb 4 p1).

"I was blessed that I had the ability, just institutionally, to have things considered -- and not rubber stamped,” Barton said. “We had an environment where you could legislate.” Republicans and Democrats worked together a lot on the effort, he added. Even though Democrats Dingell and Markey didn’t “ultimately” support his bill, they provided a lot of substantial input and criticism, Barton said: “It wasn’t like a holy jihad against it.”

But net neutrality proved fatal in the Senate, staffers largely agreed. Nagle called the issue 2006’s “real wild card.” Stevens cleared his own bill from committee but, as Stevens said in a September 2006 speech (http://1.usa.gov/1aboJrh), despite enduring hope for the overhaul’s prospects, “some of our members have tried to hold up our bill over one issue” -- net neutrality. It’s “a little overblown” to say net neutrality ended 2006 efforts, Sununu countered, pointing instead to major industry tensions between content providers and video distributors, wireless and wireline and tensions involving franchising -- all of which still exist now, he said. Whitehorn said a close committee vote made it harder to gain traction on the Senate floor. There was also tension over last-minute talk of including a wireless title in the Senate bill, creating some concern among Democrats. If the bill made it to the floor, “we could have got the bill passed,” Sutherland said, citing the “tight” relationship between Stevens and Inouye as well as their negotiating skills.

In the House, net neutrality defenders “failed pretty decisively,” Waltzman said. “The Senate debate on net neutrality, on a much broader bill, was much closer.” He described close contact with his Senate counterparts throughout the process. If the Senate bill had passed, Waltzman said the two chambers would have been able to successfully conference and advance an overhauled Communications Act into law. Barton quipped that “the Senate, they operate to a different drummer.” Sununu said he’s “disappointed” in the lack of Senate leadership commitment in giving the Senate bill floor time as well as in the House for not doing a more comprehensive overhaul.

In mid-January, Barton mentioned his dead bill during the first Communications Act overhaul hearing. “This is a good thing to be doing,” Barton said of the rewrite, expressing a desire to vote for a new update. The 1996 act crucially favored the free market, Barton said, citing lingering sentiments among his liberal colleagues to the contrary as they again debated net neutrality and the authorities the FCC should or shouldn’t have: “Some of my friends on the Democrat side just don’t like a market approach.”

Barton sees the Verizon v. FCC D.C. Circuit decision as vindication. “We were right back in 2006, and we were right today,” he told us.

2010 Rewrite Stirring

Democrats were the last to announce an attempt, before the current efforts. In 2010, four top Democrats in both chambers said they would “start a process to develop proposals to update the Communications Act,” according to a May 24, 2010, news release from Senate Commerce Chairman Rockefeller and lawmakers who were then Senate Communications Subcommittee Chairman Kerry, House Commerce Chairman Waxman and House Communications Subcommittee Chairman Boucher (http://1.usa.gov/Jwq4yL). These lawmakers said they would “invite stakeholders to participate in a series of bipartisan, issue-focused meetings” starting the following month.

"This never arose as a legislative reform,” Boucher said now. “It never got much beyond people giving speeches.” There was “no clear consensus on what the elements of it ought to be” among stakeholders following the issues, he said. Senate Commerce Democratic Senior Counsel John Branscome mentioned those 2010 hearings at a December Practising Law Institute event and described a distinct lack of consensus (WID Dec 6 p3).

Even without a rewrite, congressional focus on issues can prompt agency action, Boucher said. The year 2010 yielded no broad Communications Act rewrite, but Congress tackled how individuals with disabilities could access communications devices in the 21st Century Communications and Video Accessibility Act as well as passed STELA. Boucher also pointed to an unsuccessful bill updating USF he worked on that year, “endorsed by the general stakeholders,” he said. Due to debate over whether the bill would save enough money, it never received a House floor vote, Boucher recalled. Then-FCC Chairman Julius Genachowski took on USF updates in a November 2011 order that “borrows generously” from that bill, Boucher said. “We check that as an item accomplished.”

Boucher suspected a Communications Act update would have been on the agenda for 2011 if not for a changed Congress. Republicans won the House in the 2010 midterm elections, and Boucher lost his seat to a Republican after 13 terms in office.

'Time Has Come'

Everyone interviewed emphasized how a Communications Act overhaul can and should transcend partisan lines. Trust relationships count for a lot, Nagle said: “I was fortunate to work with senators who had been around for a while, who had strong bipartisan ties.” Congress has “natural cycles” and a lot of younger members now -- but they will be maturing and perhaps growing more bipartisan by the time Communications Act legislation is on the table in a year or two, Nagle said, positing potential for a stable set of players by then in both chambers.

"I would anticipate the next telecom reform to be a bipartisan measure,” Boucher said. “These issues are not really partisan at their root, or shouldn’t be.” Waltzman cited how, in a bipartisan fashion, House Commerce cleared in December the FCC Process Reform Act and the Federal Spectrum Incentive Act.

"The biggest lesson,” according to Waltzman, is to “have a very, very open process.” He lauded Walden and Upton for conducting such a process so far, with greater need than in 2006: “The impetus to revise the rules is even greater.”

"It’s got to be open,” Sununu said. For Upton and Walden, “the biggest challenge would be getting their own elected leadership to commit to the calendar time and the resources to move the bill forward.”

Barton dismissed competing pressures to address items such as STELA or the Cable Act. “The most important thing would be to do a 2014 version of the COPE Act,” Barton said, referring to his 2006 legislation. That “blueprint” would likely still work, despite market changes such as more wireless and higher broadband adoption rates, he said.

"There’s a lot to be said for Congress to be engaging in these issues,” Nagle said. Even if a Communications Act overhaul doesn’t advance, just putting together a big package of this sort “has huge downstream impacts,” with ripple effects from those policy discussions in what industry and the FCC do, Nagle said. Although an overhaul can hold the promise of good things, it can also pose legislative and regulatory uncertainty for many industries unsure of what form it will take and if it will happen at all, Sutherland cautioned.

The 1996 Telecom Act, signed into law 18 years ago by President Bill Clinton, was “good for its time” and initiated “significant advances” in making markets more competitive, but the law was written in an era of switched access, Boucher said. “Now it’s been almost 20 years, and the time really has come for a modernization,” Boucher said. “This is an area where Congress really does need to launch a conversation.” (jhendel@warren-news.com)