[House Report 114-478]
[From the U.S. Government Publishing Office]
114th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 114-478
======================================================================
NO RATE REGULATION OF BROADBAND INTERNET ACCESS ACT
_______
March 30, 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
together with
DISSENTING VIEWS
[To accompany H.R. 2666]
[Including cost estimate of the Congressional Budget Office]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 2666) to prohibit the Federal Communications
Commission from regulating the rates charged for broadband
Internet access service, 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......................................................... 5
Committee Consideration.......................................... 6
Committee Votes.................................................. 6
Committee Oversight Findings..................................... 11
Statement of General Performance Goals and Objectives............ 11
New Budget Authority, Entitlement Authority, and Tax Expenditures 11
Earmark, Limited Tax Benefits, and Limited Tariff Benefits....... 11
Committee Cost Estimate.......................................... 11
Congressional Budget Office Estimate............................. 11
Federal Mandates Statement....................................... 12
Duplication of Federal Programs.................................. 12
Disclosure of Directed Rule Makings.............................. 12
Advisory Committee Statement..................................... 12
Applicability to Legislative Branch.............................. 12
Section-by-Section Analysis of the Legislation................... 13
Changes in Existing Law Made by the Bill, as Reported............ 14
Minority, Additional, or Dissenting Views........................ 15
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 ``No Rate Regulation of Broadband
Internet Access Act''.
SEC. 2. REGULATION OF BROADBAND RATES PROHIBITED.
Notwithstanding any other provision of law, the Federal
Communications Commission may not regulate the rates charged for
broadband Internet access service.
SEC. 3. EXCEPTIONS.
Nothing in this Act shall be construed to affect the authority of the
Commission to--
(1) condition receipt of universal service support under
section 254 of the Communications Act of 1934 (47 U.S.C. 254)
by a provider of broadband Internet access service on the
regulation of the rates charged by such provider for the
supported service;
(2) enforce subpart Y of part 64 of title 47, Code of Federal
Regulations (relating to truth-in-billing requirements); or
(3) enforce section 8.9 of title 47, Code of Federal
Regulations (relating to paid prioritization).
SEC. 4. ADDITIONAL RULE OF CONSTRUCTION.
For purposes of this Act, broadband Internet access service shall not
be construed to include data roaming or interconnection.
SEC. 5. DEFINITIONS.
In this Act:
(1) Broadband internet access service.--The term ``broadband
Internet access service'' has the meaning given such term in
the rules adopted in the Report and Order on Remand,
Declaratory Ruling, and Order that was adopted by the
Commission on February 26, 2015 (FCC 15-24).
(2) Commission.--The term ``Commission'' means the Federal
Communications Commission.
(3) Rate.--The term ``rate'' means the amount charged by a
provider of broadband Internet access service for the delivery
of broadband Internet traffic.
(4) Regulation.--The term ``regulation'' or ``regulate''
means, with respect to a rate, the use by the Commission of
rulemaking or enforcement authority to establish, declare, or
review the reasonableness of such rate.
PURPOSE AND SUMMARY
H.R. 2666, No Rate Regulation of Broadband Internet Access
Act, prohibits the Federal Communications Commission (FCC) from
regulating the rates charged for broadband Internet access
service (BIAS). The bill is intended to prevent the Commission
from using the reclassification of BIAS under Title II of the
Communications Act of 1934 to engage in rate regulation,
whether directly through tariffing or indirectly through
enforcement actions.
The legislation defines rates, regulation of rates, and
broadband Internet access service. In addition, the legislation
carves out specific exceptions from the prohibition on rate
regulation, including the Commission's existing authority to
enforce its truth in billing rules, enforcement of the paid
prioritization rule from the Open Internet order, and
administration of the Universal Service Fund. The bill also
clarifies that it does not address roaming or interconnection.
BACKGROUND AND NEED FOR LEGISLATION
The regulation of the relationship between Internet service
providers (ISPs) and end users has a long and complex history.
Decades of legislative and regulatory decisions have shaped the
way in which that relationship is governed, beginning with
early decisions about how to differentiate the various layers
of the service. The FCC's 1970s rules differentiated data
services that processed information from those that simply
transmitted information, setting the stage for a regulatory
regime that acknowledged the difference in the delivery of
transmissions from the infrastructure that facilitated the
delivery.
The more recent debate over the regulatory classification
of Internet services forms the basis of the divide over net
neutrality rules and where the FCC derives the authority to
adopt and enforce such regulations. The history of this debate
informs a great deal of current discussions on how to govern
this innovative service.
As the Internet first entered the commercial sector and
access became a mainstream commercial product, the U.S.
government faced a fundamental question: should this new
network of networks be regulated under the same laws governing
legacy telephone networks--laws first articulated in 1934 and
used to regulate a government-sanctioned monopoly--or should
the government take a hands-off approach, letting the Internet
grow free from the common carrier regulatory regime used to
regulate telephony? Through the concerted efforts of the FCC
and the administration of President Bill Clinton, policies were
put into place to ensure that the Internet would not be subject
to common carrier regulations under Title II of the
Communications Act of 1934.
There was bipartisan agreement that this light touch
regulatory regime was the appropriate approach for this new
service, particularly as the passage of the Telecommunications
Act of 1996 reacted in many ways to the failures of burdensome
legacy regulations. This did not mean that the Internet was
entirely free from government oversight; in 2004, former FCC
chairman Michael Powell articulated four basic principles of
Internet consumer protection. Chairman Powell set forth four
``Internet Freedoms'' that consumers were entitled to: (1)
access the lawful Internet content of their choice, (2) access
legal service and applications, (3) connect lawful devices, and
(4) have competition among providers of service and content. In
the same speech, he asserted that while Internet openness was a
vital goal, government regulations were not necessary, and
could potentially harm innovation.
In 2005, under then-Chairman Kevin Martin, the FCC adopted
a set of principles based on Powell's freedoms. These
principles were intended as policy guidelines to promote
adoption and use of Internet services. At the time of their
adoption, Chairman Martin stated that the principles were not
enforceable and that the competitive marketplace would preclude
the need for any regulation. However, in 2008, the
enforceability of these principles was tested when the FCC
attempted to order a broadband provider to cease certain
network management practices and adhere to the principles. In
Comcast Corp. v. FCC (2010), the U.S. Circuit Court for the
D.C. Circuit (``D.C. Circuit'') ruled that the FCC did not
demonstrate the statutory authority necessary to issue the
order enforcing the principles.
As the Court was deliberating the Comcast case, the FCC,
under the direction of then-Chairman Julius Genachowski, was
working to promulgate new net neutrality rules codifying the
principles under a new theory of statutory authority. Following
the Court's decision, the FCC initially proposed reclassifying
broadband Internet access service as a telecommunications
service, subject to the common carrier rules of Title II.
Ultimately, the FCC instead relied on Section 706 of the
Telecommunications Act of 1996, claiming it as a statutory
grant of authority. The 2010 Order imposed requirements for
disclosure and transparency on providers, and banned blocking
and discrimination of network traffic, subject to reasonable
network management. The rules differentiated between fixed
broadband providers--typically those providing service to the
home--and mobile broadband providers, based on the
technological differences in the two platforms.
The rules were again challenged in court on the grounds
that the FCC lacked statutory authority, the decision to
implement the rules was arbitrary and capricious, and that the
rules were in violation of laws prohibiting the FCC from
treating broadband providers as common carriers. In January of
2014, the D.C. Circuit upheld the Commission's rule requiring
broadband providers to disclose network management practices,
but struck down the rules banning blocking and unreasonable
discrimination. Unlike in previous challenges, the court ruled
that the FCC had demonstrated that it has the authority under
Section 706 to regulate broadband network management practices,
but that the rules adopted were essentially common carrier
regulations, which conflicted with prior Commission decisions
classifying broadband as a non-common carriage ``information
service.''
Following the Court's decision to partially overturn the
Open Internet rules, the FCC, under Chairman Tom Wheeler,
launched a proceeding to seek public comment on how to
implement net neutrality rules. A May 2014 Notice of Proposed
Rulemaking sought comment on the various options for legal
authority for implementing rules. In November 2014, President
Barack Obama weighed in on the net neutrality debate, calling
on the FCC to enact strong rules under Title II of the
Communication's Act, including no blocking, no throttling,
increased transparency, and no paid prioritization. The
President also called for mobile broadband services to be
included, and acknowledged that there should be some exceptions
for reasonable network management and specialized services.
While calling for reclassification of broadband consumer access
as Title II services, the President urged the FCC to forbear
from rate regulation of broadband.
In February 2015, the FCC voted to adopt rules that
reclassified broadband Internet access service as a Title II
telecommunications service, consistent with President Obama's
preferred approach. The Commission adopted rules to prevent
blocking, throttling, and paid prioritization. Additionally,
the FCC chose to forbear from select provisions of Title II.
Despite the Commission's forbearance, the reclassification
of broadband Internet access service as a Title II service
poses a serious risk for the regulation of rates charged by
providers for the delivery of Internet traffic, which would be
an unprecedented move in the market. Though Chairman Wheeler
has repeatedly stated that the Commission does not intend to
regulate rates, including during a hearing before the
Subcommittee on Communications and Technology, it is not clear
that this is an assurance the Chairman can make, particularly
given the fact that this Commission expressly overturned the
decisions of prior Commissions.
There are two ways the Commission regulates rates under
Title II: through its tariffing authority and through its
authority to prohibit unjust and unreasonable rates. Whereas
tariffing is before-the-fact regulation of rates, the
Commission's authority to regulate through the adjudication of
complaints provides for after-the-fact regulation of rates. The
FCC chose to forbear from the provisions of Title II that deal
with pre-existing tarrifing requirements, which addresses much
of the concern surrounding ex ante rate regulation. However,
two major problems remain. First, FCC forbearance is an agency
decision that can be reversed by a future Commission decision,
creating an atmosphere of uncertainty. Additionally, the Order
still applies Sections 201 and 202 of the Communications Act to
broadband Internet access service, which grant the Commission
authority over unjust and unreasonable rates. These rules leave
open the possibility for future regulation of rates through the
FCC's enforcement authority, a potential that creates immense
uncertainty for providers seeking to implement innovative and
novel pricing or delivery plans for consumers.
HEARINGS
The Subcommittee on Communications and Technology held a
hearing on January 21, 2015, to examine less burdensome
alternatives to the Title II reclassification of the Internet.
The hearing, entitled ``Protecting the Internet and Consumers
Through Congressional Action,'' considered a discussion draft
authored by Chairman Upton and Chairman Walden, which would put
into law the bright line net neutrality rules without the
threat of rate regulation. The Subcommittee received testimony
from:
Meredith Atwell Baker, CTIA--The Wireless
Association;
Chad Dickerson, Etsy;
Jessica Gonzalez, National Hispanic Media
Coalition;
Paul Misener, Amazon.com;
Michael Powell, National Cable &
Telecommunications Association; and
Nicol Turner-Lee, Minority Media & Telecom
Council.
On February 25, 2015, just prior to the Commission's vote
on the proposed rules, the Subcommittee on Communications and
Technology held a hearing entitled ``The Uncertain Future of
the Internet'' to discuss the potential impacts of the
reclassification. The Subcommittee received testimony from:
Rob Atkinson, Information Technology and
Innovation Foundation;
Former Congressman Rick Boucher, Internet
Innovation Alliance;
Larry Downes, Georgetown Center for Business
and Public Policy; and,
Gene Kimmelman, Public Knowledge.
On October 27, 2015, the Subcommittee on Communications and
Technology held a hearing entitled ``Common Carrier Regulation
of the Internet: Investment Impacts'' to examine the economic
effects of the reclassification and the threat of rate
regulation. The Subcommittee received testimony from:
Nicholas Economides, professor, New York
University Stern School of Business;
Frank Louthan, Raymond James Financial;
Michael Mandel, the Progressive Policy
Institute; and,
Robert Shapiro of Sonecon LLC.
On January 12, 2016, the Subcommittee on Communications and
Technology held a hearing on H.R. 2666 and received testimony
from:
Elizabeth Bowles, WISPA;
Harold Feld, Public Knowledge; and,
Robert McDowell, Wiley Rein LLP, former FCC
Commissioner.
COMMITTEE CONSIDERATION
On June 4, 2015, Representative Adam Kinzinger introduced
H.R. 2666, the No Rate Regulation of Broadband Internet Access
Service.
On February 10 and 11, 2016, the Subcommittee on
Communications and Technology met in open markup session and
forwarded H.R. 2666 without amendment, to the full Committee by
a vote of 15 yeas and 11 nays. Two amendments to the
legislation, offered by Ranking Member Eshoo and Representative
Matsui, were defeated.
On March 24 and 25, 2016, the full Committee on Energy and
Commerce met in open markup session. Chairman Walden offered an
amendment to the bill to clarify the scope of the prohibition
and define terms used in the bill, which was adopted. Ranking
Member Eshoo, Representative Matsui, and Representative
McNerney offered amendments that were defeated. The Committee
ordered H.R. 2666 reported to the House, as amended, by a
record vote of 29 yeas and 19 nays.
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. The
following reflects the record votes taken during the Committee
consideration:
COMMITTEE OVERSIGHT FINDINGS
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee held hearings and made
findings that are reflected in this report.
STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES
The goal and objective of H.R. 2666 is to prohibit the FCC
from engaging in rate regulation of broadband Internet access
service through the reclassification of the service under Title
II of the Communications Act of 193.
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.
2666 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. 2666 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 29, 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. 2666, the No Rate
Regulation of Broadband Internet Access 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. 2666--No Rate Regulation of Broadband Internet Access Act
H.R. 2666 would amend existing law to prohibit federal
regulation of rates charged for services related to broadband
Internet access. The Federal Communications Commission (FCC)
currently regulates certain aspects of those services,
including activities related to blocking, degrading, or
charging fees to prioritize content. At this time, the agency
does not regulate the prices charged to consumers for broadband
services.
Based on information from the FCC, CBO estimates that
implementing the bill would have no significant effect on the
agency's workload and spending 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. 2666 would be negligible, assuming annual
appropriation actions consistent with the agency's authorities.
Because enacting H.R. 2666 would not affect direct spending or
revenues, pay-as-you-go procedures do not apply.
CBO estimates that enacting H.R. 2666 would not increase
net direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2027.
H.R. 2666 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 Theresa Gullo, 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. 2666 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. 2666 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 ``No
Rate Regulation of Broadband Internet Access Act.''
Section 2. Regulation of broadband rates prohibited
Section 2 prohibits the FCC from regulating the rates
charged for broadband Internet access service, as defined in
the rules adopted in the FCC's 2015 Open Internet Order.
Section 3. Exceptions
Section 3 details specific exceptions from the prohibition,
intended to prevent unintended effects, many of which were
identified by members and witnesses during Committee
consideration of the legislation. This section clarifies that
nothing in the legislation shall affect the authority of the
FCC to condition receipt of universal service support on the
regulation of rates charged by the provider for the supported
service. In addition, this section makes an exception for the
FCC's ability to enforce its truth-in-billing rules, an
important consumer protection. Finally, this section clarifies
that it does not affect the Commission's authority to enforce
its bright line rule on paid prioritization.
Section 4. Additional rule of construction
Section 4 clarifies the scope of the legislation,
instructing that for purposes of this Act, broadband Internet
access service shall not be construed to include data roaming
or interconnection. In the Open Internet Order, as well as this
bill, the FCC defines broadband Internet access service as ``a
mass-market retail service by wire or radio that provides the
capability to transmit data to and receive data from all or
substantially all Internet endpoints. . . .'' Though
interconnection and roaming are not mass-market retail services
and therefore not subject to the prohibition on rate regulation
for purposes of this bill, the rule of construction removes any
ambiguity that might exist.
Section 5. Definitions
Section 5 defines relevant terms for the purposes of this
bill. For the term ``broadband Internet access service,'' the
bill adopts the meaning given to the term in the FCC's Open
Internet Order. This section clarifies that the term
``Commission'' refers to the Federal Communications Commission.
This section also defines the term ``rate'' as the amount
charged by a provider of broadband Internet access service for
the delivery of broadband Internet traffic. It also defines
``regulation'' and ``regulate'' with respect to a rate as the
use by the Commission of its rulemaking or enforcement
authority to establish, declare, or review the reasonableness
of such rate. This definition is intended to reach one of the
motivating concerns behind the bill: after-the-fact rate
regulation through enforcement.
The Committee intends that the term ``rates'' be
interpreted broadly, extending beyond a simple price to any
provider-offered fee, rate level, rate structure, discount,
incentive, or similar customer-facing proposal. This approach
is consistent with the interpretation of that term by the
Commission itself and by Courts that have addressed the
question in the context of rates charged by providers of
communications services.
For instance, in the context of interpreting Section 332(c)
of the Communications Act governing commercial mobile radio
service (CMRS) providers, the Commission has found that
``regulation of rates includes regulation of `rate levels and
rate structures,' such as whether to charge for calls in whole-
minute increments and whether to charge for both incoming and
outgoing calls.''' In other contexts, the Commission has found
that a rate or price of zero is considered a ``rate.'' In the
context of broadband Internet access service, the Committee
likewise intends that the Commission interpret the term
``rates'' broadly, including by considering zero-rating (i.e.,
not charging for certain kinds of data) a ``rate'' because it
involves the pricing of certain data at zero.
Courts have agreed with the FCC's expansive definition of
the term ``rates'' in the context of communications services,
noting that a ``rate'' includes those practices that have a
relationship to the amount charged to or paid by the customer
for service. Similarly, in Aubrey v. Ameritech Mobile
Communications, Inc., a federal district court held that a
plaintiff's challenge to a wireless service provider's early
termination fee (ETF) was preempted by Section 332 of the Act
because the ETF itself was a ``rate charged.'' The Committee
intends that courts also interpret the term ``rates'' broadly
in the context of assessing any efforts by the Commission to
regulate how broadband Internet access service is offered.
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
This legislation does not amend any existing Federal
statute.
DISSENTING VIEWS
These Democratic dissenting views offer the minority's
explanation of its opposition to the passage of H.R. 2666--the
No Rate Regulation of Broadband Internet Access (No Rate
Regulation Act). Proponents claim this bill is merely an
attempt to prevent the Federal Communications Commission (FCC
or Commission) from using its 2015 reclassification of
broadband Internet access service under Title II of the
Communications Act to engage in rate regulation. Democratic
members of the Committee have publicly stated our agreement
with the intent behind the bill. We have noted, however, that
as drafted and reported out of Committee, H.R. 2666 goes far
beyond its stated goal.
Nonetheless, Democrats attempted to arrive at a compromise
with the Republican majority through negotiations and by
offering substantive amendments at both the subcommittee\1\ and
full committee markups.\2\ Such a compromise would have
significantly improved H.R. 2666. Unfortunately, the Republican
majority declined all of the Democratic amendments.
Additionally, the majority's eleventh hour changes to the bill
failed to sufficiently narrow the bill's expansive reach and
would continue to leave consumers unprotected.
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\1\At the subcommittee markup of the bill, Democrats offered
amendments to help address Democratic concerns with H.R. 2666. In
particular, Ranking Member Anna Eshoo (D-CA) offered an amendment to
codify the FCC's decision to not set broadband rates. Rep. Doris Matsui
(D-CA) also offered an amendment, retaining the existing language in
H.R. 2666, but reserving specific FCC authority in areas unrelated to
rate regulation.
\2\For example, an amendment offered by Rep. Jerry McNerney (D-CA)
at full committee was similarly voted down. Mr. McNerney's amendment
would have preserved the FCC's authority to act in the public interest,
convenience, and necessity in spite of H.R. 2666's sweeping
prohibition.
---------------------------------------------------------------------------
I. BACKGROUND
The FCC adopted net neutrality rules in February 2015 to
protect consumers, free expression, and innovation. The FCC
rooted its decision in multiple sections of the Communications
Act. Most significantly, the FCC's Order relied on a decision
by the D.C. Court of Appeals in Verizon v. FCC, to reclassify
broadband Internet access service as a telecommunications
service under Title II of the Communications Act.
Based on the Court's remand instructions, as well as its
own record, the FCC determined that many aspects of Title II
were not relevant to modern broadband service. Accordingly, for
broadband Internet access service, the FCC chose not to apply
over 700 provisions in Title II, including parts of Sections
201 and 202. In particular, the FCC chose not to apply its
regulations related to rate setting, tariffing, and last-mile
unbundling. Yet, despite the FCC's forbearance from regulating
broadband Internet access service rates, Internet service
providers have voiced fears that Title II reclassification
makes it easier for a future FCC to regulate rates.
II. FEARS OF FCC'S DESIRE TO REGULATE BROADBAND INTERNET ACCESS RATES
ARE EXAGGERATED
Fears that the current FCC, or a succeeding commission,
will regulate broadband rates are exaggerated based on the
current marketplace for broadband Internet access service and
the FCC's action in choosing not to apply the rate setting
provisions of Title II. Indeed, this Commission has acted
reasonably and prudently. There is no reason to believe, nor
has any good one been articulated, that future commissions will
ignore or depart from this precedent, absent good reason for
doing so.
The regulation prohibition, as contained in the bill
reported out of our full committee, takes a very static view of
the market for broadband Internet access service. It also
completely ignores the reasonableness and even-handedness of
the Commission's approach to date in defining and deciding to
what extent broadband Internet access service should be
regulated. Despite this, Democrats attempted to ameliorate the
Republican's concerns regarding the possible actions of a
future FCC.
Ranking Member Eshoo (D-CA) offered an amendment--at both
Subcommittee and full Committee markup--that would permanently
prevent the FCC from setting rates for broadband service. In
effect, Ms. Eshoo's amendment would prevent the FCC from ever
telling a broadband provider what it could charge consumers.
Despite the consistency between Ms. Eshoo's amendment and the
stated goal of H.R. 2666, Republicans defeated this amendment
in a party line vote.
Additionally, Representatives Matsui (D-CA) and McNerney
(D-CA) tried to curtail some of the bill's harms that the
Republicans claimed were unintended. They offered two
straightforward amendments that would have set out a non-
exhaustive list of issues that were supposedly beyond the scope
of the bill, such as the FCC's continued ability to act in the
public interest and to protect consumers from discriminatory
practices. These amendments were rejected on a party line vote.
III. H.R. 2666 COULD LEAD TO UNDESIRED EFFECTS
The No Rate Regulation Act has the potential to harm
consumers far more than it would benefit them. The central
issue raised by H.R. 2666, as introduced, was the bill's
failure to define what it was prohibiting. Without defining the
term ``rate regulation,'' experts asserted that the bill could
result in vast unrelated effects, impacting the FCC's authority
to act on wholly unrelated issues,\3\ including truth in
billing practices and discriminatory data caps; ensuring
broadband availability through the universal service fund
(USF); addressing rate-related issues in merger reviews; and
ensuring enforcement against paid prioritization, among others.
---------------------------------------------------------------------------
\3\House Committee on Energy and Commerce, Subcommittee on
Communications and Technology, Hearing on Four Communications Bills,
114th Cong. (Jan. 12, 2016) (Testimony of the Honorable Robert
McDowell).
---------------------------------------------------------------------------
Two hours before the Committee's markup of H.R. 2666,
Chairman of the Subcommittee on Communications and Technology
Greg Walden (R-OR) submitted, and the Committee adopted on a
party line vote, an amendment to specifically preserve the
FCC's authority over some issues and to add definitions for the
terms ``rate'' and ``regulate.'' The amended bill, however,
would do nothing to protect the FCC's authority under
significant parts of the FCC's open Internet rules, the FCC's
merger review mandate, the FCC's authority to act in the public
interest, or the FCC's authority to address unfair or
discriminatory practices.
Many Democratic members raised concerns that despite
decades of law and regulation on similar issues in a number of
contexts, the definitions of rate and regulate were not
tethered to any other source of law or authority. Moreover, the
definitions--first presented to the Democratic members of the
Committee two hours before the markup--seemed so broad as to
leave unaddressed many of the concerns raised about the
underlying bill. Without any time to review or negotiate these
novel and broad definitions, Democratic members were forced to
oppose the amendment.
IV. CONCLUSION
H.R. 2666 would have far reaching consequences that could
drastically affect the Commission's authority to continue its
work. For these reasons, we cannot support the passage of H.R.
2666, as it is currently drafted, and we strongly urge our
colleagues in the House to withhold their support for the
measure as well.
Frank Pallone, Jr.,
Ranking Member,
Committee on Energy and Commerce.
Anna G. Eshoo,
Ranking Member,
Subcommittee on Communications and Technology.