Net neutrality dominated FCC Chairman Tom Wheeler’s fourth hearing in under two weeks Tuesday, as he faced off against a House GOP appropriator expressing the desire to punish the agency financially for its focus on net neutrality. Wheeler said that the FCC FY 2016 budget request of $388 million largely developed from “unavoidable costs” such as the agency’s proposed move. Commissioner Ajit Pai, as expected (see 1503230067), opposed the budget request and asked Congress to defund the net neutrality order’s execution.
FCC Commissioner Ajit Pai intends to ask Congress to strip the agency of money to execute its net neutrality order, he said in written testimony for a House Appropriations subcommittee scheduled for Tuesday. “Congress should forbid the Commission from using any appropriated funds to implement or enforce the plan the FCC just adopted to regulate the Internet,” Pai plans to testify. “Not only is this plan bad policy; absent outside intervention, the Commission will expend substantial resources implementing and enforcing regulations that are wasteful, unnecessary, and affirmatively detrimental to the American public.” Pai, one of two GOP commissioners, is “unable to support” the FCC’s FY 2016 budget request, he will say.
Congress has “real interest to push back” on the FCC net neutrality order, said House Majority Whip Steve Scalise, R-La. He acknowledged the possibility of legislation substituting the order with one that doesn't reclassify broadband under Communications Act Title II is at “an early stage,” speaking Thursday at a Free State Foundation event. On a day the FCC also faced scrutiny before the House Communications Subcommittee (see 1503190048), the agency came under fire from congressional Republicans at the FSF forum.
Transparency within the House Commerce Committee and at the FCC emerged as the key divisive issue Thursday as FCC Chairman Tom Wheeler took on his third hearing this week. Democrats blasted Communications Subcommittee Chairman Greg Walden, R-Ore., for what they said was a partisan FCC reauthorization draft bill designed to freeze funding at the agency for four years. Republicans harangued the FCC for its process and transparency practices.
Senate Commerce Committee Chairman John Thune, R-S.D., probed FCC members on possible rate regulation under Communications Act Title II reclassification at a Wednesday oversight hearing. “Let’s just say hypothetically that someone files a complaint at the FCC alleging” rates aren’t just and reasonable under Title II Section 201, Thune said, suggesting it could mean possible rate regulation. “That is absolutely right,” Commissioner Ajit Pai said, saying it “opens the door” to “ex post rate regulation.” Commissioner Jessica Rosenworcel said there has been no such complaint.
A draft version of FCC reauthorization legislation would cap the USF at $9 billion a year and freeze FCC funding at its current level for the next four years. House Communications Subcommittee Chairman Greg Walden, R-Ore., circulated the draft Tuesday, including it in the GOP memo for an FCC oversight hearing Thursday with all five commissioners. The reauthorization bill would let the agency adjust its fee schedule and would remove the FCC chairman’s ability to hire or fire its inspector general. “With this reauthorization, we are charting the course to make the necessary reforms to an agency that is ill equipped for the innovation era,” Walden said in a statement. “This bill addresses the commission’s disproportionate FY 2016 budget request, the runaway growth in the Universal Service Fund, and ensures that the FCC’s Inspector General can conduct oversight of the commission without fear of reprisal from a chairman.” The FCC requested $388 million for FY 2016, more than $50 million more than current funding. The GOP memo pointed to net neutrality, customer proprietary network information enforcement action, pre-emption of state municipal broadband restrictions, unfinished dockets, use of delegated authority and transparency as core areas that GOP lawmakers worry about. The memo cited “concerns” with recent testimony from FCC Managing Director Jon Wilkins -- “Mr. Wilkins was unable to provide details on the planned closures and staff re-organization of the field offices. Recent reports from the field indicate that the Commission is planning significant structural changes to its Enforcement Bureau. The Committee is concerned that transparency problems extend further into the budget request.” Wilkins testified that the FCC needs more money for “unavoidable costs” in moving its headquarters and for IT upgrades (see 1503040032). The FCC would receive $339.8 million each year through FY 2020, the draft text said. Walden’s hearing will be Thursday at 11 a.m. in 2123 Rayburn. The FCC declined comment.
Sen. Kelly Ayotte, R-N.H., reintroduced legislation “to provide for the equitable distribution of Universal Service funds to rural States,” as its longer title said. Last Congress, Ayotte introduced the USF Equitable Distribution Act of 2013 (S-1766), which would have ensured that not less than 75 percent of the interstate telecom USF contributions in rural states stay within that state. It never advanced. Ayotte introduced S-734 Thursday. It has no co-sponsors and has been referred to the Commerce Committee, where Ayotte is a member. Its text is not yet online.
Telecom deregulation advocates are following up recent successes in four states that passed statutes deregulating aspects of wireline and VoIP services by renewing their push for passage of similar legislation in the Idaho and Minnesota legislatures. Both states are considering bills that would prohibit VoIP regulation: Idaho’s S-1105 and Minnesota’s HF-776/SF-895. Minnesota is also considering HF-1066/SF-736, legislation that would let ILECs be regulated the same as CLECs. None of those bills advanced as far as statutes that passed or were enacted in Kentucky, North Dakota, Pennsylvania and West Virginia. Thirty-two states deregulated wireline service by the end of December, while three others and the District of Columbia significantly limited wireline oversight, said National Regulatory Research Institute Principal Researcher Sherry Lichtenberg.
Explaining why the net neutrality order released publicly Thursday is 400 pages, a senior FCC official told reporters that the agency wanted to deal with points raised by critics and commenters because it fully expects the order to be challenged in court.
The FCC has not only “failed to pursue meaningful solutions” to making sure broadband is being deployed in a timely and reasonable fashion, but exacerbated the problem by “arbitrarily raising” the broadband benchmark speed and imposing Communications Act Title II regulation on broadband in the net neutrality order, NCTA said in comments filed Friday. Responded to the agency’s January notice of inquiry (see 1501290043) on improving broadband deployment, the comments hadn't been posted in docket 14-126. USTelecom also filed comments on the NOI Friday, which, according to its blog, focused on removing “outdated legacy regulations” and “restrictive local rules and regulations.” The commission failed to “effectively implement many of its own prior recommendations,” including adding broadband to Lifeline and implementing the Remote Areas Fund (RAF) to deploy broadband to unserved areas, NCTA said. The commission should immediately revoke offers to ILECs for high-cost USF support that don't meet the new 25 Mbps download/3 Mbps upload standard, it said. The funding should be offered on a competitively neutral basis to any qualified broadband provider willing to provide the new speed, NCTA said. The agency should also implement the RAF and issue an NPRM to create a broadband Lifeline program, the filing said. An independent third party should also examine why there hasn’t been more progress extending broadband deployment to unserved areas, even though more than $28 billion in federal funding has been spent on the goal since 2010, the filing said. USTelecom urged the agency to grant its October 2014 forbearance petition (see 1410070050), reforming state and local regulations “that impede a provider’s ability to roll out broadband services,” and ensure that broadband providers can deploy fiber in multi-dwelling units. The FCC should “promote efficient and carefully targeted broadband deployment in rural areas” through the Connect America Fund and develop “’sooner rather than later’ a long-term universal service solution for rate-of-return carriers,” USTelecom said.