Legislative Activity

House and Senate Hold Hearings on Internet Issues

On February 25, the House Committee on Energy and Commerce’s Subcommittee on Communications and Technology and the Senate Committee on Commerce, Science, & Transportation held companion hearings concerning the Internet and Internet governance. The hearings occurred one day in advance of the Federal Communications Commission’s (FCC’s) scheduled vote on Open Internet rules. The House hearing examined the legal, economic, and policy issues created by the FCC’s proposed reclassification of broadband Internet access as telecommunications services. Representatives from the Information Technology and Innovation Foundation, the Internet Innovation Alliance, and Public Knowledge testified at the House hearing. The Senate hearing included testimony on concerns relating to the loss of U.S. involvement over the Internet Assigned Numbers Authority (IANA) and the preparedness of non-governmental actors to protect Internet governance functions from interference by foreign governments. Representatives from the National Telecommunications and Information Administration (NTIA) and the Internet Corporation for Assigned Name and Numbers (ICANN) testified at the Senate hearing.

House Passes FCC Consolidated Reporting Act        

On February 24, the House of Representatives passed the Federal Communications Commission Consolidated Reporting Act of 2015 (H.R.734) by a vote of 411-0. First introduced on February 4, the bill consolidates the reporting obligations of the FCC to improve congressional oversight and reduce reporting burdens. Specifically, the bill requires the FCC to publish a comprehensive communications marketplace report assessing competition, deployment of communications capabilities, and whether laws or regulatory practices pose barriers to competitive entry into the communications market. The bill now goes to the Senate for consideration.

This Week’s Hearings:

  • Wednesday, March 4:  The House Committee on Energy and Commerce’s Subcommittee on Communications and Technology will hold a hearing titled “Reauthorization of the Federal Communications Commission: The FCC’s FY 2016 Budget Request.” FCC Managing Director Jon Wilkins will be the sole witness at this hearing.

Regulatory Activity

FCC Adopts New Open Internet Rules

At its February 26 Open Meeting, the FCC adopted by a 3-2 vote a Report and Order on Remand, Declaratory Ruling, and Order (Order) containing new Open Internet rules. The rules come more than a year after the U.S. Court of Appeals for the D.C. Circuit struck down the FCC’s prior Open Internet rules in Verizon v. FCC. The FCC’s new rules are also expected to be challenged in court. Although the text of the Order has not yet been released, the FCC has issued a News Release detailing the main provisions of the Order:

  • No Blocking. Broadband providers may not block access to legal content, applications, services or non-harmful devices.
  • No Throttling. Broadband providers may not impair or degrade lawful Internet traffic on the basis of content, applications, services or devices.
  • No Paid Prioritization. Broadband providers may not favor some lawful Internet traffic over other traffic in exchange for consideration (i.e., no fast lanes). This also bans Internet Service Providers (ISPs) from prioritizing content and services of their affiliates.
  • Standard for Future Conduct. The Order establishes that ISPs cannot “unreasonably interfere with or unreasonably disadvantage” the ability of consumers to select, access and use the lawful content, applications, services or devices of their choosing, or of edge providers to make lawful content, applications, services or devices available to consumers. It further provides authority for the FCC to address questionable ISP practices on a case-by-case basis.
  • Greater Transparency. The Order requires that broadband providers disclose, in a consistent format, promotional rates, fees, and surcharges and data caps, and provide notice of network management practices that can affect service.
  • Reasonable Network Management. An ISP may take reasonable measures to manage the technical and engineering aspects of their networks (other than engaging in paid prioritization) as long as those measures are primarily used for and tailored to achieving a legitimate network management – and not business – purpose. The FCC’s standard for “reasonable” management takes account of the particular engineering attributes of the technology involved.
  • Broad Protection. The Order adopts protections to ensure that services that do not go over the public Internet (and, therefore, would not be subject to Title II) do not undermine the Open Internet rules.
  • The Order grants the FCC the authority to hear complaints and take enforcement action if it determines that the interconnection activities of ISPs are not just and reasonable.

The FCC relied on both Title II of the Communications Act and Section 706 of the Telecommunications Act of 1996 as sources of legal authority for the new Open Internet rules. The Order reclassified “broadband Internet access service” (i.e., the retail broadband service Americans buy from cable, phone, and wireless providers) as a telecommunications service under Title II. Certain provisions of Title II will apply, while the Order forbears from, or refrains from enforcing, 27 provisions of Title II and over 700 associated regulations.

The following major provisions of Title II will apply: (1) no “unjust and unreasonable practices” under Sections 201 and 202; (2) consumer complaint investigations under Section 208 and related enforcement provisions under Sections 206, 207, 209, 216, and 217; (3) consumer privacy protections of Section 222; (4) fair access to poles and conduits under Section 224; (5) protections for persons with disabilities under Sections 225 and 255; and (6) universal service fund support through partial application of Section 254.

The following major provisions will be subject to forbearance:

  • Rate Regulation. Broadband providers will not be subject to tariffs or other forms of rate approval, last-mile unbundling, or utility-style regulation.
  • Universal Service Contributions. The Order does not require broadband providers to contribute to the Universal Service Fund under Section 254.

In addition, broadband service will remain exempt from state and local taxation under the Internet Freedom Act, which bans state and local taxation of Internet access.

The FCC will enforce the Open Internet rules through investigation and processing of formal and informal complaints. The Enforcement Bureau may request objective written opinions on technical matters from outside technical organizations, industry standards-setting bodies, and other organizations.

The News Release states that Title II broadband regulation can be accomplished while encouraging investment in broadband networks by “tailoring the application of Title II for the 21st century.” It notes that mobile voice services have been regulated under a similar light-touch Title II approach and investment and usage have boomed. It also states that investment analysts have concluded that Title II with forbearance is unlikely to have any negative on the value or future profitability of broadband providers, and that certain providers have stated that a light-touch Title II classification of broadband will not depress investment.

FCC Preempts State Laws Restricting Community Broadband

At its February 26 Open Meeting, the FCC adopted a Memorandum Opinion and Order (Order) to grant two petitions to preempt portions of state laws in North Carolina and Tennessee that limited the service areas of municipal broadband providers. The FCC determined that the states’ laws improperly prevented municipal broadband providers from expanding service “outside their current footprints despite numerous requests from neighboring unserved and underserved communities,” according to a News Release. Tennessee’s law limited the provision of Internet and cable services to the electrical system footprint (the community broadband provider there was also a provider of municipal electric services). North Carolina’s law, according to the FCC, imposed “numerous conditions” that precluded the community broadband provider there from expanding service, such as restricting expansion into areas where the private sector delivers service at speeds of 768 kbps, which the FCC called an “archaic” standard that is a “fraction” of the FCC’s benchmark broadband speed. The Order found that the restrictions at issue were barriers to broadband deployment, investment, and competition, and therefore clearly conflicted with the FCC’s directive under Section 706 of the Telecommunications Act to remove barriers to broadband investment and competition. The News Release noted that a federal agency may preempt state laws that conflict with its regulations or policies so long as the agency is acting within the scope of its authority. The FCC’s rules are expected to be challenged in court.

FCC Sets Comment Deadlines for Proposals to Improve Data Collection Efforts on Minority and Female Media Ownership

On February 12, the FCC issued a Second Further Notice of Proposed Rulemaking and Seventh Further Notice of Proposed Rulemaking (FNPRM) seeking comment on proposals to improve the FCC’s data collection efforts on minority and female media ownership. Primarily, the FNPRM seeks to address privacy and data security concerns raised by commenters in prior proceedings while still providing the FCC with comprehensive, reliable data reflecting the race, gender, and ethnicity of the owners and interest holders in broadcast stations. Accordingly, the FNPRM seeks comment on a proposal to create a new “restricted use” FCC Registration Number (RUFRN) that would be supported by identifying information for attributable individuals but would not include full Social Security Numbers and would be housed securely on the FCC’s servers and not distributed to the public. Comments are due March 30, and reply comments are due April 13.