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'Muddy the Waters'

Rosenworcel Not Dropping FCC's Bulk Billing, AI Ad Disclosure Bids Amid House Panel Jabs

FCC Chairwoman Jessica Rosenworcel showed no willingness Tuesday to abandon a March Further NPRM that would ban bulk billing arrangements between ISPs and multi-dwelling unit owners (see 2403050069) despite bipartisan criticism during a House Communications Subcommittee hearing. She was similarly unmoved by GOP skepticism about a proposal requiring disclosure of AI-generated content in political ads (see 2405220061). During the hearing, Republican Commissioner Brendan Carr called for the FCC to backtrack on both proposals because of the U.S. Supreme Court’s June Loper Bright Enterprises v. Raimondo decision and other rulings (see 2407080039).

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House Commerce Committee leaders divided along well-trod party lines on the FCC’s April adoption of net neutrality rules that largely mirrored a rescinded 2015 order, one of several actions potentially in peril after Loper Bright narrowed the FCC’s leeway to interpret federal laws (see 2407010036). “The FCC has no authority to reclassify broadband” as a Communications Act Title II service, said panel Chair Cathy McMorris Rodgers, R-Wash. “I look forward to the courts stepping in to overturn” the reclassification and other “unlawful power grabs” following the Supreme Court's rulings.

House Commerce Democrats “strongly support the reinstatement” of the net neutrality rules , said Rep. Debbie Dingell of Michigan, who spoke on behalf of panel ranking member Frank Pallone of New Jersey. “The FCC’s action will result in greater oversight over internet providers to mitigate network outages, resolve broadband consumer complaints, prevent anti-consumer and anti-competitive practices, and protect our national security.”

House Innovation Subcommittee Chairman Gus Bilirakis, R-Fla., and Rep. Robin Kelly, D-Ill., cited misgivings about the proposed bulk billing ban. “I have received letters from 140 constituents unanimously in opposition to the proposal, fearing it will significantly increase costs,” Bilirakis said. “The vast majority of these messages come from those residing in senior-living communities on fixed incomes.” The FCC’s 2010 report and order on bulk billing (see 1001120116) “aligns with these constituent concerns,” he said.

Kelly said she will continue monitoring the FCC’s bulk billing proceeding. Some constituents “tell me bulk deals help keep prices low and give them higher-performance broadband and ending these deals could eliminate those benefits,” she said: “I also understand that there are many variations of what these arrangements could look like and in some cases they may be driving consumer frustration.” Rep. Sheila Cherfilus-McCormick, D-Fla., raised concerns about the proposal in May (see 2406280056).

Opening this issue up for public comment I think is the right thing to do,” Rosenworcel told Bilirakis. The FCC is “mindful that there are some constituents … who might like these services. But it’s been 14 years since we looked at this issue.” She has received via the FCC “a lot of complaints from consumers” who ask, “‘Why do I have to pay for this service,’” via assessment fees apartment buildings have begun using to bypass other restrictions, “‘if I don’t want to use it?’”

Carr believes banning bulk billing would force apartment dwellers to seek ISP services “in a relatively less competitive environment. It’s bad for competition. It’s bad for prices.” The FCC “looked at this issue multiple times over the years and found that they do more good than harm,” he said: “I think that we should stick to that.”

AI Criticism

Rosenworcel drew partisan blowback from House Communications Republicans over the AI proposal. Reps. Kat Cammack, R-Fla., and Jay Obernolte, R-Calif., both noted Republican Federal Election Commission Chairman Sean Cooksey declared in June that the FEC has sole authority over political reporting requirements and disclaimers (see 2406060051). Dingell applauded Rosenworcel for pursuing the rulemaking, which “will help viewers better understand how political campaigns are attempting to influence them.”

Rosenworcel countered that Democratic FEC Vice Chair Ellen Weintraub “thinks that we have complementary authority here because since 1930 the FCC has been requiring campaigns, when they advertise on television and radio, to file with” the FCC on election-related advertising. “What I’ve proposed is a rulemaking; a proposal that we collect public comment on whether or not advertisements that are run on our televisions and radios should just disclose if they use AI,” Rosenworcel said.

Everyone wants transparency” on AI content in election ads, Cammack said. She’s concerned that the FCC is examining the issue fewer than five months from the 2024 presidential and congressional elections when “there’s a disconnect” between the positions Cooksey and Weintraub are taking on whether the two agencies have dual authority on the matter. Obernolte worries that an FCC rule wouldn’t apply to social media and streaming services, meaning “the public could become desensitized when they see an ad on one of those other channels that lacks” an FCC-mandated disclosure “because they make the assumption that the disclosure applies to all the channels equally.”

The FCC can only muddy the waters here,” Carr said. “It would put in place a proposal that applies only to an ad on broadcast TV, but you could see the same ad online or on cable, and it wouldn’t have the disclosure. That’s going to leave consumers less informed and perhaps more confused than they are today.”