Wheeler Favors Codifying Open Internet Order's Forbearance, Supplies Legislative Language

“During the omnibus negotiations, you and the administration lobbied hard to kill the rider,” Boozman told Wheeler of last year’s failed bicameral GOP policy rider that would have forbidden broadband rate regulation. “Why were you stating one position publicly, then working behind closed doors to push for the opposite?”

“We can find legislation that says, ‘No, you may not de-forbear,’ but that is different from the broader rate issue that it seems to have morphed into,” Wheeler told Boozman.

The FCC has provided language and technical assistance within the past two weeks, as expected, to House Appropriations Financial Services Subcommittee Chairman Ander Crenshaw, R-Fla., that would codify the net neutrality order's forbearance, an agency spokeswoman told us after the hearing. Wheeler had committed to providing assistance at a March 15 House hearing.

Wheeler previously told Boozman he was fine with Congress taking broadband rate regulation off the table for the FCC. But he told Boozman during an appropriations hearing Tuesday that he was referring to a process of codifying forbearance from elements of Communications Act Title II, not from a blanket rate regulation ban as was in last year’s rider language. “Then all of a sudden you’re gutting the open Internet order, you’re gutting the FCC’s ability to deal with other issues on an ex post basis,” Wheeler said. “Because at the heart of everything is rates. So paid prioritization is a rate issue. Throttling is a rate issue. Blocking is a rate issue. Interconnection is a rate issue.” Boozman insisted that Wheeler did know his intent earlier last year. These issues have re-emerged this year in the House Commerce Committee and among House appropriators, too. House Communications Subcommittee ranking member Anna Eshoo, D-Calif., proposed an amendment to codify forbearance (see 1602110050), similar to what Wheeler advocated, but House Republicans shot down that proposal at the subcommittee and full Commerce Committee levels.

“This legislation does nothing more than codify that promise” of Wheeler to avoid rate regulation, Commissioner Ajit Pai said during the Senate appropriations hearing, backing the revival of the rate regulation ban rider. “In my view the subcommittee should take another bite at this apple.” Pai also referred to last year’s lobbying against the rider: “Indeed, from my understanding, based on multiple sources, the FCC and the administration turned down a deal that would have provided millions of dollars in additional funding to the FCC in exchange for a provision prohibiting broadband rate regulation,” Pai said. “All of this raises serious concerns about the Commission’s real intentions.” The FCC isn't aware of such a deal, the agency spokeswoman said.

New JSA Rider?

One FCC-related rider that successfully became wrapped into last year’s FY 2016 omnibus funding law grandfathered broadcaster JSAs for a decade. But the FCC has cracked down on JSAs through its transaction review process this year, provoking outcry from some lawmakers. A key House Republican appropriator told us that policy riders on this JSA issue and on rate regulation are under discussion (see 1603280047).

Pai encouraged appropriators “to include very specific language” in the FY 2017 measures to prevent such crackdowns and force the FCC to “follow the law,” he told Boozman. Pai is “more than happy” to help Boozman come up with such language, he said. “It’s sad that we have to do that,” Boozman remarked. He hammered against what he saw as the FCC’s “obvious disregard” for the JSA provisions in last year’s funding law, which enjoyed what he called “significant bipartisan support.”

Wheeler assured Boozman he takes the JSA concern “very seriously” and defended FCC practice. “When a license transfers, is sold, it takes on a new owner and becomes a new license,” Wheeler said. “All of our precedents, in broadcast, in television, in radio, have always held that. … That has been the precedent of the agency across the board, and that was our interpretation of what this intent was here.”

“We’re the ones that crafted the bill, so I can tell you what the intent was, and it’s not what you perceive it,” Boozman said. “Why should we provide you more resources if you’re not going to follow the laws that we write and expect to be followed?”

'Down to the Bone'

Aside from policy riders, Boozman slammed the FCC budget proposal of $358.3 million, $16.86 million slated for the agency’s headquarters relocation or restacking, for intent to transfer additional funds from USF to augment the budget. Congress rejected similar ideas before. Wheeler hailed agency efforts to improve design flaws in USF enforcement and said those protected should help pay for enforcement.

If not for this provision, “then there’s a $10 million shortfall,” he said, worrying about the tradeoffs involved. He later told subcommittee ranking member Chris Coons, D-Del., that the agency is 50 percent of its way to goals on cybersecurity, another major part of the budget proposal. Wheeler invoked the agency’s flat budget -- frozen for the last several years, despite a separate allocation devoted to HQ changes last year -- and said the agency has dealt with such limits by tackling “low-hanging fruit,” such as consolidating field offices and changing office space to save money spent on IT. “The difficulty is we’re down to the bone now,” Wheeler said. “Yes, we can limp along. … I don’t think that’s anything that you want us to do.” Aging IT infrastructure can make the agency vulnerable to cyberattacks, Coons said.

Wheeler warned against Congress limiting necessary funds for the agency to hold the ongoing broadcast TV incentive auction. “We don’t have an assurance that things will end with one round,” Wheeler said. “The post-bidding activity is actually as challenging as what we saw with the DTV transition several years ago.”

Sen. James Lankford, R-Okla., pressed Wheeler and Pai on the purpose of Lifeline and where the program is going following last week’s party-line commissioner vote for overhaul. Lankford emphasized the “wasteful” problem of how tribal members receive funding, with many more Lifeline customers in Oklahoma than in certain other states. Pai isn’t “optimistic” about the program’s direction, he told Lankford, citing the collapsed bipartisan deal “that would have solved the problem for Oklahoma and other areas” regarding tribal subsidies. “Unfortunately the chairman’s office at the last minute scuttled that deal.” Pai said Lifeline spending “will increase dramatically” due to the overhaul approved last week. Lankford questioned the Lifeline expansion of broadband “so you can watch cat videos on YouTube.” Wheeler mentioned the caps involved and said it would be less easy to watch such entertainment, instead emphasizing the importance of broadband for doing homework or finding employment.

Questions from Sen. Jerry Moran, R-Kan., focused on Wheeler’s set-top box overhaul, rural call completion problems and spectrum coordination with the Mexican border. Wheeler defended the progress and “good will on all sides” to resolve issues with the border. He also assured Coons on the copyright protections in his set-top plan and Moran that edge providers wouldn't be pulled into the FCC jurisdiction given its other shifts, such as a move toward broadband privacy regulation. Wheeler told Boozman he would hold specific proceedings on Alaska and tribal USF issues this year and defended the recent bipartisan rate-of-return overhaul. “I think the cap is going to be adequate,” Wheeler said regarding the high-cost fund. “I am working on the assumption that it is.” Pai said he would have “preferred a much simpler approach.”