[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.
---------------------------------------------------------------------------
    \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.