Comprehensive Telecom Rewrite Legislation Likely Off Planning Table This Congress

“It’s not going to be one bill, I don’t think,” House Communications Subcommittee Chairman Greg Walden, R-Ore., said in an interview. “Who knows if the Senate, House get together way off in the end of the Congress, but we’re taking it title by title.”

In December 2013, House GOP leaders said they wanted to kick off an update legislatively this year but now find themselves in the midst of a brewing 2016 White House race and politically explosive fights over net neutrality. Some stakeholders have grown anxious and many flag net neutrality as a powerful distracting factor, a point of agreement among the major GOP backers in the Senate and House. Walden had said earlier this year he wants to mark up legislation this Congress and suggested it “may be” in smaller pieces rather than comprehensive (see 1502270050).

A House GOP committee aide confirmed Wednesday that lawmakers decided over time not to advance via a larger rewrite bill but to tackle the Communications Act in smaller measures, with energy now focused on Title I of the act and a revamp of the FCC itself.

Net Neutrality's Distraction

“Net neutrality has clouded the issue in a negative way, but we’ll see,” House Commerce Committee Chairman Fred Upton, R-Mich., told us when asked whether the lawmakers would still begin the update as intended this year. “We’re going to look at FCC reform and do other things.” Walden also underscored the distraction: “And in the middle of this came this big explosion called net neutrality, so that kind of blew some things up too along the way.”

The Communications Act overhaul will “be a heavier lift, especially with the net neutrality issue sucking all the oxygen out of the air,” Senate Commerce Committee Chairman John Thune, R-S.D., told us, comparing the initiative with narrower FCC reauthorization legislation he plans to pursue later this year. “But we haven’t given up on an update. We’re interested in it.” Thune repeatedly has stressed his desire for a rewrite but, unlike House Republicans, Senate Republicans haven't engaged in a white paper process to solicit feedback or held any hearings specifically on the rewrite effort during the few months they have been in the majority. The Senate may use the House’s initial efforts to springboard into theirs, which Thune has said could be an omnibus package or smaller pieces, a Senate Commerce Committee Republican aide said.

Thune framed the overhaul and the FCC reauthorization push as two separate legislative efforts but Walden made no distinction. “That’s the same thing,” Walden said. “Because Title I is the FCC, the operations of the FCC, and so that’s what we’re starting with. We’ve focused on that first because that’s the first title, then we’ll work through the others.”

“A Telecom Act rewrite can certainly work even if it’s done in individual pieces,” said Grant Spellmeyer, U.S. Cellular vice president-federal affairs and public policy. “Certainly not the format that people were anticipating a year ago. It’s a bit of a shift but it makes some sense in light of the net neutrality debate this Congress.” U.S. Cellular has focused on rewrite issues on spectrum, competition and rural service. Spellmeyer had heard rumors of the piecemeal possibility before and said U.S. Cellular would support that direction if the committee chooses: “It increases the likelihood that individual bills pass.”

Smithville Communications Executive Vice President Cullen McCarty slammed Washington politics. “Gridlock seems to have hit the telecom industry,” McCarty told us. “Title II regulation on Internet access and the order on municipal broadband have become partisan issues. In the past, both sides of the aisle worked together on issues of rural telecom. Today bipartisanship is a dirty word.” Smithville, an Indiana-based telecom broadband provider, has supplied multiple white paper responses to House Republicans throughout the Communications Act update process last year.

“We’re waiting to see and we’re still working on net neutrality,” said Senate Commerce Committee ranking member Bill Nelson, D-Fla., in an interview, of any engagement with a broader overhaul of the act. “We are working as we speak and how that would fit into the overall Telecommunications Act, I can’t answer that at this point. I don’t know.” Transparency has factored into those discussions, Nelson said: ”Transparency is a part of net neutrality, so we’re discussing that as we go.”

Challenges Ahead

Some Hill Democrats say they're open to an overhaul, such as House Communications Subcommittee ranking member Anna Eshoo, D-Calif. (see 1410020036">1410020036). House lawmakers held bipartisan staffer sessions with various stakeholders last fall. One House Democratic staffer told us not much is happening with the overhaul effort these days within the committee and believes net neutrality will dominate through summer.

“There’s no prospect of something moving this Congress,” countered Eckert Seamans attorney Earl Comstock, former Comptel president and ex-Senate staffer who worked on the 1996 act. Even if the initiative isn't in one legislative package, Comstock envisioned the lawmakers devolving into a “food fight” as they push in different directions on a variety of issues, some politically controversial, from net neutrality to set-top boxes to municipal broadband. He saw no problem with advancing an update through smaller legislation and said the 1996 act was done by having “a series of bills on different issues” in the preceding years, melded into one. “If you can get consensus on concrete pieces, you might see that move,” Comstock said of this Congress.

“While the current acrimony in this space and the highly partisan nature of D.C. present challenges, Congress should continue to press forward in as bipartisan a manner as possible,” said Michael Santorelli, director of New York Law School’s Advanced Communications Law & Policy Institute. “Absent this, consumers, innovators, and the country itself will remain in the middle of a costly and counter-productive legal ping pong match between the FCC and the federal courts.” Santorelli judged such an overhaul “time intensive” but stressed that the 1996 Telecom Act took years and that there’s “general agreement” favoring an overhaul due to the vagueness of an aging statute. “This vagueness, and broad judicial deference to creative legal readings and approaches by agencies like the FCC, result in contorted interpretations of laws that do not reflect the modern market for advanced communications services,” he said.

Smithville wants focus on making USF rules for voice service apply to broadband, McCarty said. One major concern, he said, is lack of predictability. “Whatever cost model is implemented later this year for USF, that could likely change by the next administration,” McCarty said. But he encouraged lawmakers to keep updating the act and also praised the broadband provisions of the Grow America Act, an administration transportation funding proposal. McCarty wants Congress to bring accountability to the FCC, pointing to the February net neutrality order. “Lawsuits have been filed and Congress seems to lack the bipartisan courage to challenge the FCC's authority and keep them in check,” McCarty said. “None of Smithville's employees can cast a vote for FCC commissioner, but we can cast a vote for our local member of Congress. Even that seems somewhat futile in today's environment.”

Lawmakers may address various issues through smaller measures under the initiative's banner. The GOP Senate staffer said the 1996 act and unsuccessful GOP rewrite efforts in 2005 and 2006 didn't entirely revamp the Communications Act itself, emphasizing the intensity of that challenge.

“Remember, we’re breaking it up sort of title by title,” Walden said. “And the first title of the Comms Act is the FCC itself, and so our hearing this week will be on the transparency bills and kind of the process reform pieces.” FCC Chairman Tom Wheeler and Commissioner Mike O’Rielly will testify before Walden at a Thursday hearing. Oversight will remain a core focus, Walden said: “We have to walk and chew gum, which we can -- we’ve got to do our oversight and work on Comms Act update while we also continue our other work."

The GOP Senate staffer said the Communications Act overhaul could be seen as more of a recitation of broad overriding principles. FCC reauthorization could be considered one part, but he largely considered reauthorization a more stand-alone effort on FCC operations. The Senate aide emphasized Thune’s interests as including spectrum policy and a past unsuccessful Local Choice initiative but also noted it may be hard to do any bigger updates before settling the question of net neutrality. At a high level, the update process would likely try to address two big trends, that aide said -- what he judged to be the increased marketplace competition since the 1996 act and the IP transition. In some senses, the Communications Act update mentality may be an ongoing necessity, the staffer said.