Lawmakers oppose FCC plan to reassert Net authority

Pressure is building in Washington for the Federal Communications Commission to abandon its plans to apply old-style regulation to the Internet.

Now 282 members of Congress on both sides of the political aisles have asked the FCC to step aside while the lawmakers rewrite the nation's telecommunications laws.

On Friday, 171 House Republicans signed a letter addressed to FCC Chairman Julius Genachowski urging him to stop the FCC's plans to reclassify broadband as a telecommunications service. The reclassification would subject broadband services to many of the same rules applied to traditional telephone services.

This letter follows a letter sent by 74 House Democrats and a letter from 37 Republican Senators both sent on Monday to the FCC also expressing concern over broadband reclassification. In a separate letter Thursday, John Dingell (D-Mich.), former chairman of the Energy & Commerce Committee, sent a letter to Genachowski saying that he had "strong reservations about the course the commission is presently taking with respect to the regulation of broadband access services."

Dingell, who has supported Net neutrality, said that Congress--not the FCC itself--needs to clarify the FCC's authority. He said he is concerned that the FCCs plans to reclassify broadband services are "fraught with risk," which includes legal challenges in court that would likely overturn any changes made by the FCC.

Despite the growing opposition on Capitol Hill, the FCC has signaled it plans to move forward. On Thursday the agency said it will open proceedings at its next meeting in June to change how broadband services are regulated. Under Genachowski's "third way," the agency is proposing to reclassify broadband services so that some rules designed for traditional telephony services will apply to broadband.

The latest uproar stems from a federal appeals court ruling last month that stated the FCC did not have the authority to sanction Comcast for violating FCC Net neutrality principles. Comcast had been caught throttling BitTorrent transfers on its network.

The FCC, which is currently drafting new official Net neutrality regulations, has interpreted the court ruling to mean that the agency does not have the authority it thought it had to impose Net neutrality rules or make key changes in programs, such as the Universal Service Fund.

To put the agency on firmer legal grounding, Genachowski came up with what he has called a "third way" to regulate broadband. This third way calls for the FCC to change the classification of broadband services from Title I Information Services to Title II Telecommunications services. In doing this, the FCC believes it will have the authority to write and enforce rules that would protect consumers and Internet content providers from restrictions imposed by broadband providers.

The FCC said it realizes that not all Title II rules should apply to broadband, so in this "third way," Genachowski has proposed that broadband be exempt from certain aspects of Title II regulation. For example, broadband providers will not be forced to share their infrastructure with competitors, and the government will not regulate pricing for services.

But broadband providers, namely AT&T and Verizon Communications, are skeptical about this approach. They believe that changing the classification of broadband traffic could lead to more regulation of the Internet in the future. These companies claim that uncertainty with regard to the new rules, as well as the legal challenges that will likely follow when they are adopted, will create so much uncertainty in the market that it will slow investment in broadband infrastructure and services. They also say reclassification will stifle innovation. They believe many Americans will lose their jobs. And the meteoric growth in the Internet seen over the past two decades will grind to a halt, they claim.

It appears a growing number of lawmakers, both Republican and Democrat, agree with the phone companies. Specifically, they have pointed to the fact that the FCC has concluded several times under both "Democrat- and Republican-led Commissions, that broadband is not a telecommunications service but an information service outside the reach of the Title II common carrier rules." They also point out that the U.S. Supreme Court affirmed that view in its 2005 Brand X decision. And they see the FCC's argument for reclassification, which is justified by the minority opinion written in the Brand X Supreme Court case, as one that could be easily challenged in court.

Instead, these lawmakers agree that Congress should revise the Communications Act to ensure the FCC's authority is clear. Earlier this week, Senate and House Commerce Committee Chairmen John Rockefeller (D-W.V.), Henry Waxman (D-Calif.), John Kerry (D-Mass.), and Rick Boucher (D-Va.) announced plans to begin meetings next month to update the Communications Act.

The phone companies support Congressional efforts to update the Communications Act.

"We welcome this bipartisan Congressional effort from 285 Democratic and Republican Members of Congress cautioning against the FCC's proposal to subject broadband services to onerous Title II regulations," Tim McCone, AT&T's executive vice president of federal relations, said in a statement. "We look forward to working with the Congress to provide the FCC with more narrow and targeted authority to protect the open Internet in a way that will not pose risk to jobs and needed investment."

But consumer groups, which put pressure on the FCC to reclassify broadband traffic and fulfill President Obama's campaign promise of writing Net neutrality regulation, say that the Congressional backlash is merely the result of deep-pocketed lobbying efforts by the phone companies.

"Today's House letter, combined with that signed by 74 Democrats a couple of days ago, is nothing more than a demonstration of the unparalleled political and lobbying muscle of the telecommunications industry," Gigi Sohn, president of the consumer advocacy group Public Knowledge, said in a statement. "The biggest companies are spending millions and millions of dollars to buy this Congress. Members of Congress are being pressured to sign letters based on industry threats and bullying not borne out by any facts."

Indeed, AT&T and Verizon Communications spend millions of dollars each year lobbying lawmakers. Phone companies are among the most heavily regulated companies in the country. In 2009, the telecommunications industry spent $43 million on lobbying, according to the Center for Responsive Politics the Wall Street Journal reports. AT&T alone spent almost $15 million in 2009 on lobbying.

If Congress takes on the task of revising the Communications Act, these companies will likely spend even more money. The Wall Street Journal said in 2006, when Congress was considering telecom legislation, phone and cable companies a total of $59 billion to lobby lawmakers.

One thing is certain, revising the Communications Act will not be a speedy process. It could take several years for Congress to revise these laws. It took about a decade to finish the 1996 Communications Act.

Congressional staffers told the Journal that they don't know how broadly lawmakers will go in rewriting the laws. It could carve out smaller parts of the act to revise, or it could overall the entire thing. Given the issues before Congress now, as well as upcoming midterm elections, it's unlikely Congress will do much of anything before November.