[House Report 114-444]
[From the U.S. Government Publishing Office]
114th Congress } { Rept. 114-444
HOUSE OF REPRESENTATIVES
2d Session } { Part 2
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SMALL BUSINESS BROADBAND DEPLOYMENT ACT
_______
March 10, 2016.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Upton, from the Committee on Energy and Commerce,
submitted the following
SUPPLEMENTAL REPORT
[To accompany H.R. 4596]
MINORITY VIEWS
Democratic members provide these supplemental and minority
views to the Committee Report on H.R. 4596, the Small Business
Broadband Deployment Act, for additional background and context
surrounding those issues and matters being presented in and
purportedly addressed by the legislation. While Democratic
members do not oppose the end result of the reported version of
H.R. 4596, the record is not sufficient at present to determine
what the size of a small business is in this context, whether
the underlying Federal Communications Commission (FCC) enhanced
transparency rules are unduly burdensome on small Internet
Service Providers (ISPs), or the effect of an exemption on
consumers. Moreover, the FCC is currently evaluating whether
such rules are needed.
The question underlying H.R. 4596 is narrow: is there a way
to relieve truly small service providers from some burdens of
the FCC's enhanced transparency rules while minimizing the
impact on consumers? To answer this question, Congress and the
FCC must collect adequate data to analyze the benefits of the
enhanced transparency rules to consumers and the real burdens
on ISPs. The FCC's data analysis is on-going and this bill
provides certainty to smaller ISPs in the interim.
H.R. 4596, as reported, ensures that consumers will
continue to receive essential disclosures under the 2010 FCC
transparency rules, while temporarily exempting smaller ISPs
from the 2015 enhanced transparency rules. The bill also
directs the FCC to report to Congress so that future decisions
about this rule are data-driven.
I. BACKGROUND
As part of the FCC's Protecting and Promoting the Open
Internet Order, the FCC enhanced its preexisting broadband
transparency rule. In doing so, the Commission noted that
``consumers continue to express concern that the speed of their
service falls short of advertised speeds, that billed amounts
are greater than advertised rates, and that consumers are
unable to determine the source of slow or congested
service.''\1\
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\1\Federal Communications Commission, Protecting and Promoting the
Open Internet, GN Docket No. 14-28, Report and Order on Remand,
Declaratory Ruling, and Order, 30 FCC Rcd. 5601, at para.164 (2015).
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At that time, the FCC chose to exempt temporarily smaller
ISPs from the transparency rule enhancements, citing an
abundance of caution regarding concerns that the requirements
might be burdensome for small providers.\2\ For the purposes of
the temporary exemption, the FCC adopted the proposal from the
American Cable Association (ACA) that smaller ISPs be defined
as those with 100,000 or fewer subscribers.\3\
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\2\Id. at para.172-175.
\3\Id. at para.174 (``One metric to which ACA points is the
approach that the Commission used in its 2013 Rural Call Completion
Order, which excepted providers with 100,000 or fewer subscriber lines,
aggregated across all affiliates, from certain recordkeeping,
retention, and reporting rules. We adopt this definition for purposes
of the temporary exemption that we adopt today.'').
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The FCC further directed its Consumer and Governmental
Affairs Bureau to adopt an order by December 15, 2015, on
whether to make the exemption permanent and whether to modify
the Commission's definition of a smaller broadband provider.
The Bureau issued an order on December 15, 2015, extending the
smaller broadband provider exemption for another year so it
could complete the process of estimating the burden the
enhancements will place on providers of all sizes, and to
obtain approval from the Office of Management and Budget, as is
required under the Paperwork Reduction Act of 1995 (PRA).\4\
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\4\Protection and Promoting the Open Internet, Report and Order, GN
Docket No. 14-28 (Feb. 26, 2015) (online at transition.fcc.gov/
Daily_Releases/Daily_Business/2015/db1215/DA-15-1425A1.pdf).
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II. ANALYSIS OF THE SMALL BUSINESS BROADBAND DEPLOYMENT ACT
A. The effects of H.R. 4596
The original text of H.R. 4596 would have increased the
definition of a smaller provider five-fold and made the
exemption from the enhanced transparency rule permanent.
Specifically, the draft would have applied to any ISP with
500,000 or fewer subscribers or with fewer than 1,500
employees. At the legislative hearing on January 12, 2016,
where the discussion draft of H.R. 4596 was considered,
Democrats raised concerns that these thresholds for small
business were too high and that the permanent exemption may not
be warranted without additional data to reveal burdens imposed
on small ISPs and their magnitude. Democrats argued that to
make this type of determination, Congress must have robust data
about the impact on consumers as well as the true costs to
service providers.
If the bill were enacted as introduced, tens of millions of
consumers would permanently lose the benefit of the FCC's
enhanced transparency rules. This would be an undesirable
outcome as the record that the FCC has compiled on these
matters clearly show tangible and calculable consumer-related
benefits associated with these rules. Testimony provided at the
Subcommittee on Communications and Technology's legislative
hearing on January 12, 2016, estimated that 21 million
consumers are currently served by smaller ISPs.\5\ The FCC has
collected data on FCC Form 477 that shows 1,913 companies
currently serve 500,000 or fewer subscribers. These providers
have a total of approximately 11.4 million connections that
would qualify for the exemption outlined in the discussion
draft (and later incorporated into the introduced version of
H.R. 4596).\6\ At a minimum, the introduced version of H.R.
4596 represents a nearly 45 percent increase over those
approximately 6.6 million connections that are now subject to
the FCC's exemption.
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\5\See Written Statement of L. Elizabeth Bowles, Legislative
Committee Chair, Wireless Internet Service Providers Association
President, Aristotle, Inc. (January 12, 2016) (online at
docs.house.gov/meetings/IF/IF16/20160112/104317/HHRG-114-IF16-Wstate-
BowlesE-20160112-U1.pdf).
\6\The FCC does not collect data on employees, so it is impossible
to estimate the impact on consumers of the proposed language that would
exempt companies with 1,500 or fewer employees.
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Further, the proposed thresholds have no basis in the
legislative record. One witness at the January 12 hearing
indicated that for her association, the largest member was a
wireless ISP with approximately 200,000 subscribers, with the
average member providing service to 1,500 subscribers.\7\ No
record evidence in Congress or at the FCC supports extending
the exemption to cover entities with 500,000 subscribers or
with 1,500 employees.
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\7\See archived webcast of A Legislative Hearing on Four
Communications Bills, U.S. House of Representatives, Subcommittee on
Communications and Technology, Committee on Energy and Commerce
(January 12, 2016) (online at energycommerce.house.gov/hearings-and-
votes/hearings/legislative-hearing-four-communications-bills).
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B. Modifications made during markup to H.R. 4596, as introduced
At the subcommittee markup, Republican members offered to
work with Democrats to improve the bill. Ultimately,
Congressman Loebsack (D-IA) and Chairman Walden (R-OR) offered
an amendment at the full Committee markup to address many of
the concerns raised by Democrats. The amendment would
significantly modify the bill to create a five-year sunset for
the exemption and lowers the exemption threshold to companies
with 250,000 or fewer subscribers. Additionally, the amendment
would direct the FCC to report to Congress to provide data to
help determine an appropriate threshold going forward. The
amendment was adopted by voice vote, and H.R. 4596 was reported
favorably by voice vote from the full Committee on February 25,
2016.
The changes made by the Loebsack-Walden amendment could
significantly mitigate potentially negative impacts on
consumers while still providing certainty for smaller ISPs.
Because Congress will rely on data reported by the expert
agency, the FCC should include in its report: data specific to
how the exemption affects consumers; information on how many
consumers would be exempted at different thresholds; and a
recommendation on whether any definitions should be modified
based on the data collected. Additionally, although the
language requires the FCC to send its report within 180-days
after enactment, the FCC should consider updating the report to
Congress in the interim before the sunset expires.
Again, the compromise struck in this specific instance
helps to keep a fair balance between providing certainty for
smaller ISPs while ensuring that consumers are not forgotten,
as the FCC continues its process to collect the relevant data
for Congress. We appreciate the opportunity to supplement the
Committee Report to ensure our views are noted on this
important discussion.
Frank Pallone, Jr.,
Ranking Member, Committee on
Energy and Commerce.
Anna G. Eshoo,
Ranking Member, Subcommittee
on Communications and
Technology.
Dave Loebsack,
Member, Subcommittee on
Communications and
Technology.
[all]