Divided FCC Approves Net Neutrality NPRM

Thursday’s vote attracted more members of the public and interest groups -- including representatives of Public Knowledge, the Benton Institute, Free Press and the Foundation for American Innovation -- than usual monthly meetings. The agency took tighter control on the attendees, not letting the public into the L Street Northeast headquarters for the meeting until 30 minutes before the start. At the start of the meeting, FCC Secretary Marlene Dortch read an admonition about observing but not interrupting the meeting and warning violations would result in ejection.

Rosenworcel said Title II reclassification is "not a stalking horse for rate regulation" and will "make it easier for competitive providers to access pole attachments and apartment buildings." The proposed rules are "legally sustainable," she said, because they "track those that were upheld in court in 2016." The FCC "must prioritize consumers," said Commissioner Anna Gomez in her first meeting. "We must pay attention to communities who have been historically left on the wrong side of the digital divide," Gomez said, and the item will "seek public comment about how best to safeguard and secure broadband infrastructure."

"We need to remember that, as we adopt this notice, we are not reinventing the wheel," said Commissioner Geoffrey Starks. The 2015 order "adopted rules designed to protect an open internet by prohibiting conduct that we should agree [is] harmful," Starks said. Title II reclassification would give the commission a "firm footing to protect Americans and partner even more effectively with our sister national security agencies on the same goal," he added.

"We should not spend our time staring into the regulatory rear-view mirror or relitigating disputes that have long since passed from relevancy," Carr said in an animated plea against the item. "We have a free and open internet today without Title II," he said, saying the "new justifications for Title II that have been conjured up this time around are just as farfetched as the ones activists made up in 2017." Simington called the proposed rules "unnecessary, dangerously broad, and unlikely to survive review," saying he had "no choice but to dissent."

Congressional Democrats and Republicans divided sharply on the FCC’s approval of the NPRM, reflecting long-entrenched positions on Capitol Hill about net neutrality (see 2310170071). “The COVID-19 pandemic clearly demonstrated that broadband … isn’t a luxury, it’s essential infrastructure,” said Sens. Ed Markey, D-Mass., and Ron Wyden, D-Ore. The FCC “recognized that by advancing” the rewrite proceeding, which will institute rules that “will protect the free and open internet, create a level playing field for all businesses, and help ensure a just broadband future.” The Democratic senators led filing in 2022 of the Net Neutrality and Broadband Justice Act, which would codify Title II reclassification (see 2207280063).

“We strongly urge the FCC to reverse course on this proposed rulemaking, which will weaken services, stifle innovation, and jeopardize American communications leadership,” said Republicans House Commerce Committee Chair Cathy McMorris Rodgers of Washington and Communications Subcommittee Chairman Bob Latta of Ohio. “Now is not the time to impose utility-style controls” given the U.S. is now “closer than ever before to closing the digital divide and solidifying our leadership in next-generation technologies.”

“The Biden FCC has made it clear that they intend to use every avenue possible to increase the federal government’s power over the internet and how Americans are able to access it,” a Senate Commerce Committee GOP spokesperson emailed. “Today’s votes” on the net neutrality proceeding and adoption of a declaratory ruling allowing E-rate funding for Wi-Fi on school buses (see 2310190056) show the commission’s “main priority is mission creep resulting in increased costs on consumers. It strains credulity that some want to expand the FCC’s taxing power over the internet when it is engaged in such blatant overreach.”

Multiple ISP industry sectors criticized the NPRM vote. “Broadband providers have and always will support an open internet,” USTelecom CEO Jonathan Spalter said. “Title II is not the answer [but] is, at its heart, a regulatory power grab. Mandating crushing regulatory hurdles will only delay rather than deliver the promise of universal connectivity.” The FCC “placed politics over sound policy and fiction over facts, and we are now embarking on yet another unnecessary and distracting net neutrality proceeding,” NCTA CEO Michael Powell said. He called it “the most sweeping command and control framework ever imposed on broadband networks,” and said the proposal “is a monumental change in how the internet will be regulated and will dramatically affect how it will work going forward.”

“The FCC would have the power to determine if rates are ‘just and reasonable’ and to require companies to alter prices,” Powell said: “There can be no clearer description of rate regulation. Congress is the only authority that can grant the FCC power to make such major changes in how the internet is regulated, not unelected agency officials.”

“The 1930s style-regulatory framework contained in Title II is the wrong approach for the dynamic and competitive wireless industry,” CTIA CEO Meredith Baker said. “Reintroducing regulations intended for utilities risks chilling the innovation and investment in mobile broadband we all want to foster in the United States. The FCC should instead focus on closing the digital divide, facilitating competition, and advancing access to the spectrum we need to invest and innovate.” ACA Connects CEO Grant Spellmeyer said Title II regulation “is particularly inapt for smaller broadband providers, who lack any semblance of upstream or downstream market power and who would face extraordinary burdens under a common carrier regime.”

There also was criticism from conservative groups. “In a moment of regulatory whiplash, all Americans should be gravely concerned that the FCC has voted to pursue a wasteful, fruitless, and likely unconstitutional effort to re-establish and expand government control over a vibrant sector of the economy,” Citizens Against Government Waste President Tom Schatz said. The NPRM is worse than the 2015 order “because it would impose rate regulation, despite promises by various administration officials that they have no intent to do so,” he said. “The NPRM is not only a waste of time and money but also jeopardizes America’s leading position in global telecommunications.”

The reintroduction of Title II regulation “stands on even shakier ground now than it did in 2015,” said Kristian Stout, International Center for Law & Economics director-innovation policy: “The wisdom behind the commission’s 2018 Restoring Internet Freedom Order is more evident with each passing year, as the broadband market continues to demonstrate no need for utility-style regulations.” He said the rulemaking presents a major questions doctrine issue “that will leave the FCC in an uphill battle before the U.S. Supreme Court in the face of inevitable legal challenges.” The FCC "correctly acknowledges" how the COVID-19 pandemic "highlighted broadband's importance, but draws the wrong conclusion from history and recent experience,” said Tech Policy Institute President Scott Wallsten: “Without Title II oversight we've seen improvements in availability, competition, and adoption, including among low-income households and people with disabilities, with prices rising more slowly than inflation. These positive developments don't prove the absence of Title II is the cause, but they indicate its absence isn't hindering progress."

"The COVID epidemic and the changing national security environment, among other things, demonstrate how essential it is for the FCC to restore the protections afforded under Title II of the Communications Act to broadband,” said Benton Institute for Broadband & Society Senior Counselor Andrew Schwartzman. “Restoring Title II oversight enables the FCC to monitor and remedy service outages, and to accept consumer complaints about shortcomings in broadband services.” Said Public Knowledge CEO Chris Lewis: "Broadband is too important in the daily lives of every household, business, and community to leave oversight to the providers themselves, especially when they have virtual monopolies in most local communities." Barbara van Schewick, director of Stanford Law School’s Center for Internet and Society, said, “It’s common sense that such a critical infrastructure needs an expert agency that has authority to set ground rules, ensure fairness, and act swiftly when there are abuses. That’s why the FAA oversees airlines, the FDA has responsibility for prescription drug safety, and why the FCC was created in the first place.”

"We believe Congress should establish a permanent and predictable Internet policy framework,” said Incompas CEO Chip Pickering in a statement. “However, in light of Congressional inaction, we welcome the Commission’s vote this morning to reinstate its limited authority over broadband.” Rules “prohibiting broadband internet access providers from interfering with subscriber traffic will ensure that America’s digital economy is inclusive, open, and stable,” said CCIA Senior Vice President Stephanie Joyce.

The FCC’s authority “to reclassify broadband internet access services under Title II and to exercise meaningful oversight with enforceable rules has been extensively litigated and is well-settled under the law,” said Raza Panjwani, senior policy counsel at New America’s Open Technology Institute. Net neutrality is “very different” from other cases where the U.S. Supreme Court invoked the major questions doctrine, said HWG attorney Christopher Wright, a former FCC general counsel, in a Bloomberg Law opinion piece. The 1996 Communications Act “plainly defined” telecommunications and thus broadband as a transmission service, and SCOTUS justices have said the major questions doctrine shouldn’t be used to avoid the most natural interpretation of a statute, Wright said. “This isn’t a case where an agency has discovered a new power in the vague text of a statute adopted decades ago.