[House Report 114-444]
[From the U.S. Government Publishing Office]


114th Congress   }                                     {        Report
                        HOUSE OF REPRESENTATIVES
 2d Session      }                                     {       114-444

======================================================================



 
                SMALL BUSINESS BROADBAND DEPLOYMENT ACT

                                _______
                                

 March 7, 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

                              R E P O R T

                        [To accompany H.R. 4596]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 4596) to ensure that small business providers of 
broadband Internet access service can devote resources to broad 
band deployment rather than compliance with cumbersome 
regulatory requirements, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Hearings.........................................................     3
Committee Consideration..........................................     3
Committee Votes..................................................     3
Committee Oversight Findings.....................................     4
Statement of General Performance Goals and Objectives............     4
New Budget Authority, Entitlement Authority, and Tax Expenditures     4
Earmark, Limited Tax Benefits, and Limited Tariff Benefits.......     4
Committee Cost Estimate..........................................     4
Congressional Budget Office Estimate.............................     4
Federal Mandates Statement.......................................     5
Duplication of Federal Programs..................................     5
Disclosure of Directed Rule Makings..............................     5
Advisory Committee Statement.....................................     5
Applicability to Legislative Branch..............................     6
Section-by-Section Analysis of the Legislation...................     6
Changes in Existing Law Made by the Bill, as Reported............     7

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Small Business Broadband Deployment 
Act''.

SEC. 2. EXCEPTION TO ENHANCEMENT TO TRANSPARENCY REQUIREMENTS FOR SMALL 
                    BUSINESSES.

  (a) In General.--The enhancements to the transparency rule of the 
Federal Communications Commission under section 8.3 of title 47, Code 
of Federal Regulations, as described in paragraphs 162 through 184 of 
the Report and Order on Remand, Declaratory Ruling, and Order of the 
Federal Communications Commission with regard to protecting and 
promoting the open Internet (adopted February 26, 2015) (FCC 15-24), 
shall not apply to any small business.
  (b) Sunset.--Subsection (a) shall not have any force or effect after 
the date that is 5 years after the date of the enactment of this Act.
  (c) Report by FCC.--Not later than 180 days after the date of the 
enactment of this Act, the Federal Communications Commission shall 
submit to the Committee on Energy and Commerce of the House of 
Representatives and the Committee on Commerce, Science, and 
Transportation of the Senate a report that contains the recommendations 
of the Commission (and data supporting such recommendations) 
regarding--
          (1) whether the exception provided by subsection (a) should 
        be made permanent; and
          (2) whether the definition of the term ``small business'' for 
        purposes of such exception should be modified from the 
        definition in subsection (d)(2).
  (d) Definitions.--In this section:
          (1) Broadband internet access service.--The term ``broadband 
        Internet access service'' has the meaning given such term in 
        section 8.2 of title 47, Code of Federal Regulations.
          (2) Small business.--The term ``small business'' means any 
        provider of broadband Internet access service that has not more 
        than 250,000 subscribers.

                          PURPOSE AND SUMMARY

    H.R. 4596, the Small Business Broadband Deployment Act, 
extends by five years the temporary exemption granted to small 
businesses by the Federal Communications Commission (FCC) from 
the enhanced disclosure requirements of the Open Internet 
Order.
    The legislation also defines a small business, for purposes 
of the bill, as a provider of broadband Internet access service 
with not more than 250,000 subscribers. In addition, the 
legislation requires the FCC to submit a report to Congress 
within 180 days detailing whether the exemption should be made 
permanent and whether the definition of small business adopted 
in this bill should be modified.

                  BACKGROUND AND NEED FOR LEGISLATION

    As part of the Federal Communications Commission's Open 
Internet Order, the Commission adopted enhancements to the 2010 
disclosure requirements for Internet service providers (ISP), 
including in the required disclosures information such as 
promotional rates, pricing, and performance characteristics 
such as packet loss. Recognizing the burden that these enhanced 
disclosures could place on small businesses, the FCC 
temporarily exempted small ISPs with 100,000 or fewer 
subscribers from these disclosures. This exemption covered only 
the enhanced disclosure requirements from the 2015 Order, 
leaving in place the transparency requirements adopted as part 
of the 2010 Open Internet Order, which subsequently survived 
the court challenge to the rules.
    In November 2015, Republican members of the Subcommittee on 
Communications and Technology and Republican members of the 
Small Business Committee wrote a letter to Chairman Wheeler, 
urging him to make the exemption permanent and to expand the 
definition of small business to better reflect the definitions 
adopted by the Small Business Administration (SBA) and those 
used by the FCC and approved by the SBA in the past. 
Specifically, the members urged the FCC to set the threshold at 
telecommunications carriers with fewer than 1,500 employees or 
500,000 subscribers.
    Shortly before the December 2015 expiration of the 
temporary exemption, the FCC extended it until December 2016. 
The original draft of this legislation would have made the 
exemption permanent, seeking to provide certainty and 
regulatory relief to small ISPs who lack the resources to 
comply with the enhanced disclosure requirements. During the 
Subcommittee markup, members agreed to continue to work toward 
a bipartisan amendment that would provide certainty to small 
businesses while protecting consumers. While members agreed 
that small businesses needed protection, there was some 
disagreement as to the appropriate threshold for defining a 
small business. The final legislation reflects the bipartisan 
compromise that relieves regulatory burdens for small ISPs, 
encourages greater deployment and investment by these 
providers, and still protects consumers.

                                HEARINGS

    The Subcommittee on Communications and Technology held a 
hearing on a discussion draft of the Small Business Broadband 
Deployment Act, on January 12, 2016. Former FCC Commissioner 
Robert McDowell, Elizabeth Bowles of the Wireless Internet 
Service Providers Association, and Harold Feld of Public 
Knowledge provided testimony.

                        COMMITTEE CONSIDERATION

    On February 10 and 11, 2016, the Subcommittee on 
Communications and Technology met in open markup session and 
forwarded a discussion draft entitled ``Small Business 
Broadband Deployment Act'' without amendment, to the full 
Committee by a voice vote.
    Chairman Walden introduced H.R. 4596 on February 24, 2016. 
H.R. 4596 was identical to the discussion draft forwarded by 
the Subcommittee.
    On February 24 and 25, 2016, the full Committee on Energy 
and Commerce met in open markup session, where Chairman Walden 
and Congressman Loebsack offered an amendment to the bill to 
include a five-year extension of the exemption, an FCC report 
requirement, and a revised definition of small business. The 
amendment was adopted and the Committee ordered H.R. 4596 
reported to the House, as amended, by a voice vote.

                            COMMITTEE VOTES

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. A 
motion by Mr. Upton to order H.R. 4596 reported to the House, 
as amended, was agreed to by a voice vote. No recorded votes 
were taken on this legislation.

                      COMMITTEE OVERSIGHT FINDINGS

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee held a hearing and made 
findings that are reflected in this report.

         STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

    The goal and objective of H.R. 4596 is to provide relief 
from regulatory burdens and greater certainty to small 
businesses providing broadband Internet access service.

   NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
4596 would result in no new or increased budget authority, 
entitlement authority, or tax expenditures or revenues.

       EARMARK, LIMITED TAX BENEFITS, AND LIMITED TARIFF BENEFITS

    In compliance with clause 9(e), 9(f), and 9(g) of rule XXI 
of the Rules of the House of Representatives, the Committee 
finds that H.R. 4596 contains no earmarks, limited tax 
benefits, or limited tariff benefits.

                        COMMITTEE COST ESTIMATE

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  CONGRESSIONAL BUDGET OFFICE ESTIMATE

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, March 4, 2016.
Hon. Fred Upton,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4596, the Small 
Business Broadband Deployment Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Kathleen 
Gramp.
            Sincerely,
                                                        Keith Hall.
    Enclosure.

H.R. 4596--Small Business Broadband Deployment Act

    H.R. 4596 would modify certain regulatory policies adopted 
by the Federal Communications Commission (FCC) regarding the 
obligation of small broadband providers to give consumers 
information about the performance and cost of their services. 
Under the FCC's current rules, broadband providers with 100,000 
or fewer subscribers are exempt from certain reporting 
requirements until December 16, 2016, at which time the 
Commission plans to adopt final regulations on those 
requirements. H.R. 4596 would apply the exemption to providers 
with 250,000 or fewer subscribers and would keep the exemption 
in place for five years after the date of enactment. Finally, 
the bill would direct the FCC to submit recommendations to the 
Congress on those policies within six months of enactment.
    Based on information from the FCC, CBO estimates that the 
rulemaking activities needed to implement the provisions of 
H.R. 4596 would not have a significant effect on the agency's 
costs relative to current policies. Moreover, under current 
law, the FCC is authorized to collect fees sufficient to offset 
the cost of its regulatory activities each year. Therefore, CBO 
estimates that the net cost to implement H.R. 4596 would be 
negligible, assuming annual appropriation actions consistent 
with the agency's authorities. Because enacting H.R. 4596 would 
not affect direct spending or revenues, pay-as-you-go 
procedures do not apply.
    CBO estimates that enacting H.R. 4596 would not increase 
net direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2027.
    H.R. 4596 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Kathleen Gramp. 
The estimate was approved by H. Samuel Papenfuss, Deputy 
Assistant Director for Budget Analysis.

                       FEDERAL MANDATES STATEMENT

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                    DUPLICATION OF FEDERAL PROGRAMS

    No provision of H.R. 4596 establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

                  DISCLOSURE OF DIRECTED RULE MAKINGS

    The Committee estimates that enacting H.R. 4596 does not 
direct any rule making within the meaning of 5 U.S.C. 551, as 
specified in Section 2(a).

                      ADVISORY COMMITTEE STATEMENT

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  APPLICABILITY TO LEGISLATIVE BRANCH

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title

    Section 1 provides that the Act may be cited as the ``Small 
Business Broadband Deployment Act.''

Section 2. Exception to enhancement to transparency requirements for 
        small businesses

    Section 2(a). Section 2(a) exempts small businesses from 
the enhancements to the transparency rules described in the 
FCC's Order protecting and promoting the open Internet, adopted 
February 26, 2015.
    Section 2(b). Section 2(b) creates a sunset for the 
exemption, five years after the date of enactment of this Act. 
The sunset is intended to create a trigger for a 
reconsideration of the exemption by Congress in five years, 
when more data regarding the exemption is available. This 
includes the findings of the FCC's report to Congress, required 
by this legislation, as well as data provided by broadband 
Internet access service providers. By creating a sunset, 
Congress is able to determine the appropriate extension of the 
exemption as well as the appropriate threshold for defining a 
small business. As this bill was drafted with the goal of 
creating certainty for small businesses seeking to make long 
term operational decisions, as well as to relieve regulatory 
burdens and encourage deployment and innovation by small 
businesses, the Congress should keep all of the above factors 
in mind when considering the appropriate action at the time of 
the five year sunset. While some members preferred to make the 
exemption permanent, a five year extension allows for extensive 
data collection, addressing the concerns of members who had 
reservations about the availability of data for defining a 
small business.
    Section 2(c). This section requires that the FCC submit a 
report to the relevant Committees of Congress within 180 days 
of enactment of this Act that contains their recommendations, 
and any supporting data for those recommendations, regarding 
whether this exemption should be made permanent, and whether 
the definition adopted is appropriate. As noted, this data is 
intended to aid Congress in future determinations of extending 
this exemption. The FCC's existing proceeding and resulting 
record on the exemption for small businesses should be a 
resource for the Commission in drafting this report. This 
legislation also does not preclude the FCC from making the 
exemption permanent through its own proceeding.
    Section 2(d). Section 2(d) defines ``broadband Internet 
access service'' and ``small business.'' The bill adopts the 
meaning given to the term broadband Internet access service in 
section 8.2 of title 47 of the Code of Federal Regulations, 
which is the codification of the definitions adopted in the 
FCC's Open Internet Order. The bill defines small business as 
any provider of broadband Internet access service that has not 
more than 250,000 subscribers.

         CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    This legislation does not amend any existing Federal 
statute.

                                  [all]