[Senate Report 114-401]
[From the U.S. Government Publishing Office]
Calendar No. 698
114th Congress } { Report
SENATE
2d Session } { 114-401
_______________________________________________________________________
SMALL BUSINESS BROADBAND DEPLOYMENT ACT OF 2015
__________
R E P O R T
of the
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
on
S. 2283
together with
ADDITIONAL VIEWS
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
December 9, 2016.--Ordered to be printed
______
U.S. GOVERNMENT PUBLISHING OFFICE
69-010 WASHINGTON : 2016
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
one hundred fourteenth congress
second session
JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi BILL NELSON, Florida
ROY BLUNT, Missouri MARIA CANTWELL, Washington
MARCO RUBIO, Florida CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire AMY KLOBUCHAR, Minnesota
TED CRUZ, Texas RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas ED MARKEY, Massachusetts
DAN SULLIVAN, Alaska CORY BOOKER, New Jersey
RON JOHNSON, Wisconsin TOM UDALL, New Mexico
DEAN HELLER, Nevada JOE MANCHIN, West Virginia
CORY GARDNER, Colorado GARY PETERS, Michigan
STEVE DAINES, Montana
Nick Rossi, Staff Director
Adrian Arnakis, Deputy Staff Director
Jason Van Beek, General Counsel
Kim Lipsky, Democratic Staff Director
Christopher Day, Democratic Deputy Staff Director
Clint Odom, Democratic General Counsel
Calendar No. 698
114th Congress } { Report
SENATE
2d Session } { 114-401
======================================================================
SMALL BUSINESS BROADBAND DEPLOYMENT ACT OF 2015
_______
December 9, 2016.--Ordered to be printed
_______
Mr. Thune, from the Committee on Commerce, Science, and Transportation,
submitted the following
R E P O R T
[To accompany S. 2283]
The Committee on Commerce, Science, and Transportation, to
which was referred the bill (S. 2283) to ensure that small
business providers of broadband Internet access service can
devote resources to broadband deployment rather than compliance
with cumbersome regulatory requirements, having considered the
same, reports favorably thereon with an amendment (in the
nature of a substitute) and recommends that the bill (as
amended) do pass.
Purpose of the Bill
The purpose of S. 2283, as amended, is to extend by at
least 3 years the exemption for small businesses from the
enhanced transparency rules of the Federal Communications
Commission (FCC or Commission) under section 8.3 of title 47,
Code of Federal Regulations. For purposes of the bill, a small
business would be defined as any broadband Internet access
service provider that has 250,000 or fewer broadband
subscribers. The bill also would direct the FCC to submit a
report to Congress not later than 6 months after the date of
enactment that includes the Commission's recommendations
regarding whether the bill's small business exemption should be
made permanent and whether the definition of small business
should be modified for the purposes of a permanent exemption.
Background and Needs
As part of the FCC's Protecting and Promoting the Open
Internet Order (30 FCC Rcd 5601 (2015)), the Commission adopted
enhancements to its preexisting broadband transparency rule.
The enhanced requirements include disclosure of: commercial
terms for prices, other fees, and data cap allowances;
performance characteristics, including packet loss, performance
by geographic area, and average performance over a reasonable
time and during peak usage; and network practices, including
those applied to traffic associated with a particular user or
group (including any application-agnostic degradation of
service to a particular end user), the purpose of user-based or
application-based practices, which users or data plans may be
affected, the triggers that activate the use of the practice,
the types of traffic that are subject to the practice, and the
practice's likely effects on the end users' experience.
In response to concerns from smaller providers about the
burdens of complying with these enhanced transparency
requirements, the Commission has adopted and renewed a
temporary exemption from those requirements for providers with
100,000 or fewer broadband subscribers. On December 15, 2015,
the FCC's Consumer and Governmental Affairs Bureau adopted and
released an order to extend the smaller broadband provider
exemption until December 15, 2016.
The text of S. 2283 as introduced would have permanently
exempted from the FCC's enhanced transparency rules those
broadband Internet access service providers with 500,000 or
fewer subscribers or with 1,500 or fewer employees. At the
markup, the Committee considered a substitute amendment,
offered by Senators Daines and Manchin, to replace the
permanent exemption with a 5 year extension and to further
limit the exemption to those providers with 250,000 or fewer
subscribers. Additionally, the substitute amendment included a
provision to direct the FCC to report to Congress whether the
exception should be made permanent and whether the qualifying
subscriber threshold should be modified for purposes of a
permanent exception. The language in the substitute amendment
was substantially similar to H.R. 4596, the Small Business
Broadband Deployment Act, which was passed unanimously by the
House of Representatives on March 16, 2016, and referred to the
Committee on Commerce, Science, and Transportation of the
Senate on March 17, 2016.
Senator Cantwell offered an amendment to the substitute, as
further modified, to include a requirement that the FCC begin a
rulemaking to implement the recommendations in the report
required by the substitute amendment. The amendment also
included a provision to replace the substitute's 5-year
extension with a sunset that would extend the exception for the
later of 3 years following the bill's enactment or the date on
which the Commission adopts rules in the rulemaking required to
be commenced by the amendment.
Legislative History
On November 16, 2015, Senators Daines and Risch introduced
S. 2283. Senators Gardner, Roberts, Sullivan, and Crapo
subsequently cosponsored the bill.
On March 2, 2016, the Committee held a hearing on
``Oversight of the Federal Communications Commission'' at which
all five FCC commissioners testified. During this hearing,
Senator Daines asked whether a permanent small business
exemption was appropriate. Commissioners Pai and O'Rielly
agreed that the enhanced transparency rules disproportionately
impact small businesses and that a permanent exemption is
warranted. At the same hearing, Commissioner Rosenworcel
indicated her belief that the FCC should consider a longer, and
potentially permanent, exemption than the 1-year exemption
currently provided by the FCC.
On March 17, 2016, H.R. 4596, the House companion bill to
S. 2283, was referred to the Committee.
On June 15, 2016, the Committee held an Executive Session
during which S. 2283 was considered. The bill was reported
favorably, as amended by Senators Daines, Manchin, and
Cantwell, with an amendment (in the nature of a substitute).
Estimated Costs
In accordance with paragraph 11(a) of rule XXVI of the
Standing Rules of the Senate and section 403 of the
Congressional Budget Act of 1974, the Committee provides the
following cost estimate, prepared by the Congressional Budget
Office:
S. 2283--Small Business Broadband Deployment Act of 2016
S. 2283 would modify disclosure requirements enforced by
the Federal Communications Commission (FCC) to exempt certain
broadband providers from requirements to give consumers
information about the performance and cost of their services.
CBO estimates that implementing S. 2283 would have no
significant effect on the federal budget.
Under the FCC's current rules, broadband providers with
100,000 or fewer subscribers are exempt from those reporting
requirements until December 16, 2016, at which time the
Commission plans to adopt final regulations to implement those
requirements. S. 2283 would expand the exemption to include
broadband providers with 250,000 or fewer subscribers for up to
three years after the date of enactment. The bill also would
direct the FCC to submit a report with recommendations to the
Congress on this exemption policy within six months of
enactment and to conduct a rulemaking to implement the
recommendations of the report.
On the basis of information from the FCC, CBO estimates
that the rulemaking activities needed to implement the
provisions of S. 2283 would have no 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 S. 2283
would be negligible, assuming annual appropriation actions
consistent with the agency's authorities. Because enacting S.
2283 would not affect direct spending or revenues, pay-as-you-
go procedures do not apply.
CBO estimates that enacting S. 2283 would not increase net
direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2027.
S. 2283 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.
On March 4, 2016, CBO transmitted a cost estimated for H.R.
4596, the Small Business Broadband Deployment Act, as ordered
reported by the House Committee on Energy and Commerce on
February 25, 2016. The provisions in that act are similar to S.
2283 and CBO's estimates of the costs are the same.
The CBO staff contact for this estimate is Stephen Rabent.
The estimate was approved by H. Samuel Papenfuss, Deputy
Assistant Director for Budget Analysis.
Regulatory Impact
In accordance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee provides the
following evaluation of the regulatory impact of the
legislation, as reported:
number of persons covered
The number of persons covered by this legislation should be
consistent with current levels.
economic impact
S. 2283, as reported, would exempt for at least 3 years
broadband providers with 250,000 or fewer subscribers from the
FCC's enhanced transparency rules under section 8.3 of title
47, Code of Federal Regulations. Implementation of the
legislation would relieve small businesses of burdensome
regulation. S. 2283 is not expected to negatively impact on the
Nation's economy. To the contrary, economic benefits should
follow from implementation of the legislation. For at least 3
years, small broadband Internet access providers would be able
to avoid the costs associated with compliance with these
regulatory requirements.
privacy
The reported bill is not expected to have an adverse effect
on the personal privacy of any individuals.
paperwork
The Committee does not anticipate an increased paperwork
burden on regulated entities as a result of this legislation.
To the contrary, the Committee expects entities that qualify
for the bill's exemption to face fewer paperwork requirements
than they would in the absence of such exemption.
Congressionally Directed Spending
In compliance with paragraph 4(b) of rule XLIV of the
Standing Rules of the Senate, the Committee provides that no
provisions contained in the bill, as reported, meet the
definition of congressionally directed spending items under the
rule.
Section-by-Section Analysis
Section 1. Short title.
This section would provide that the Act may be cited as the
``Small Business Broadband Deployment Act of 2016''.
Section 2. Small business exemption.
Subsection (a) of this section would define ``appropriate
congressional committees'' to mean the Committee on Commerce,
Science, and Transportation of the Senate and the Committee on
Energy and Commerce of the House of Representatives;
``broadband Internet access service'' to have the meaning given
the term in section 8.2 of title 47, Code of Federal
Regulations; ``Commission'' to mean the Federal Communications
Commission; and, ``small business'' to mean any provider of
broadband Internet access service that has not more than
250,000 subscribers.
Subsection (b) of this section would provide that the
FCC's enhanced transparency rules under section 8.3 of title
47, Code of Federal Regulations, shall not apply to any small
business.
Subsection (c) of this section would require the FCC, not
later than 180 days after the bill's date of enactment, to
submit to Congress a report that contains recommendations
regarding whether the bill's exception should be made permanent
and whether the definition of small business should be modified
for such an exception.
Subsection (d) of this section would require the
Commission, not later than 180 days after submitting the report
required by subsection (c), to begin a rulemaking to implement
the recommendations in such report. Should the Commission adopt
rules as a result of the proceeding required to be commenced
under this subsection, the Committee expects that any such
adoption be by a vote of the Commission.
Subsection (e) of this section would provide that the
exception provided under subsection (b) shall end after the
later of the date that is three years after the date of the
bill's enactment or the date on which the FCC adopts rules in
the proceeding required to be commenced under subsection (d).
Because the bill does not require the Commission to adopt rules
under the proceeding required to be commenced under subsection
(d), the sunset provided in subsection (e) would permit the
exception under subsection (b) to continue indefinitely if the
Commission does not adopt rules under the proceeding required
to be commenced under subsection (d).S6602
Additional Views of Senator Nelson
I continue to have concerns about S. 2283, the Small
Business Broadband Deployment Act of 2016, even after the
amendments adopted by the Committee at markup. The legislation
would upset a carefully crafted balance in the Federal
Communications Commission's (FCC's) Open Internet Order. That
Order recognized that all subscribers, irrespective of the size
of their broadband providers, should know fundamental and
necessary information about the cost and quality of their
broadband service. At the same time, the FCC also decided, out
of an abundance of caution, to provide additional time for
small broadband providers--those with 100,000 or less
subscribers--to come into compliance with the enhanced consumer
transparency rules.
By expanding the definition of who is a small broadband
provider, this legislation would mean that approximately three
million consumers, who currently receive these enhanced
disclosures about their broadband service, will suddenly lose
access to important information about how their broadband
provider operates its network. This legislation also puts into
place a path to making this exemption permanent. While I
understand the desire by some to take that step, we do not know
what the future may hold. Rather, the current process whereby
the FCC reviews whether there is a continuing need for the
small broadband provider exemption on a periodic basis is a
better, more targeted approach. It allows the FCC to calibrate
application of the exemption, and makes sure that there is not
a permanent class of broadband subscribers created (more than 9
million, if the bill's expanded definition of small business is
adopted) whose members never benefit from the enhanced
disclosures required by the FCC. This legislation would serve
to keep those millions of consumers largely in the dark about
the fees associated with their service, along with how their
monthly broadband usage can affect their rates.
Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, the Committee states that the
bill as reported would make no change to existing law.
[all]