Today the FCC voted 3-2 to impose Title II regulation on the Internet. In response, our Honorary Chairman Rick Boucher had this to say:
The FCC’s decision to embrace Title II regulation over the Internet now creates an opportunity for Congress to craft a non-partisan legislative solution that provides the legal certainty necessary to preserve and maintain an “open Internet” without the burdens of utility-style regulation. After more than a decade of wrangling about the proper regulatory classification of broadband services and the scope of the FCC’s authority, it is time for Congress to provide the certainty that consumers and industry need. IIA looks forward to working with members of Congress to ensure that the promise of broadband remains available for entrepreneurs, innovators and America’s consumers without a return to the days of utility regulation.
Earlier today, our Honorary Chairman Rick Boucher testified before the Subcommittee on Communications and Technology on the effects the FCC’s Net Neutrality proposal will have on the future of the Internet. In his testimony, Boucher — who served on the House Energy and Commerce and Judiciary Committees, along with the subcommittees on Communications, Technology and the Internet during his time in Congress — urged Congress to take up the issue via legislation. An excerpt:
If a Republican wins the 2016 presidential election, the new Administration would be unlikely to support a writ of certiorari to the U.S. Supreme Court if the rules are struck down by a U.S. Court of Appeals. It would be unlikely that in such an event the FCC in a Republican administration would initiate a new network neutrality proceeding. In fact it is probable that an FCC with a Republican majority would, as an early order of business, undertake a reversal of the reclassification order that will be approved tomorrow.
For these reasons, the network neutrality assurances of tomorrow’s reclassification order rest on a tenuous foundation. They are at risk of being lost. Legislation is, therefore, a superior solution. It would be virtually impenetrable from a judicial challenge, and would resolve this debate with a statutory permanence and degree of certainty not available through the regulatory process.
Read Rick Boucher’s full testimony.
Over the weekend, the San Francisco Chronicle published an op-ed from our own Larry Irving on the perils of the FCC reclassifying the Internet under Title II. An excerpt:
Advocates of net neutrality decry court rulings suggesting that the FCC might not have authority to protect the open Internet, and so utility-type regulation of broadband under Title II of the Communications Act is seen by many progressives — and by the president and his advisers — as the only way to unambiguously assure the FCC’s authority. Yet Title II regulation of the Internet seems like the wrong solution to those of us who support an open Internet but fear the impact of burdening still-evolving wired and wireless networks with centuries-old rules.
The U.S. government declaring the Internet an essential utility and applying Title II rules will also have an impact on policy deliberations about the Internet in other nations. Since the inception of the Internet, the U.S. government has urged international policymakers and regulators to exercise regulatory restraint. To reverse course at this critical time in the development of the global Internet seems self-defeating.
Check out Irving’s full op-ed over at the San Francisco Chronicle.
With the FCC expected to vote on regulating the Internet under Title II next week, our Honorary Chairman Rick Boucher appeared on Sirius XM’s The Morning Briefing to break down the potential negative effects the FCC plan could have. Give it a listen.
Last week, the Wall Street Journal published an op-ed from our own Rick Boucher and the author of our latest report, Fred Campbell, on the perils of following Europe’s lead to regulate the Internet. An excerpt:
Net-neutrality proponents assume that the impact of common-carrier regulations will be minimal and that the U.S. will maintain its technology lead forever, but the European regulatory example suggests that such an outcome is far from certain. It is more likely that imposing regulations crafted for last century’s monopoly telephone service will have a crippling and chilling effect on broadband investment. Investment drives innovation: As the Internet Innovation Alliance study demonstrates, Europe has fallen badly behind the U.S.
You can read the full op-ed over at the Wall Street Journal (subscription required).
This morning, we published a new report — authored by Fred B. Campbell, Jr. — on the effect Title II regulation on communications investment in Europe, and what it could mean for investment here in the United States. The full report is available here, and below is a recording of a teleconference call discussing the report.
Yesterday, FCC Commissioner Ajit Pai had some strong words about the Commission and President Obama’s apparent plans to apply Title II regulations to the Internet. He started off with a bang, stating:
I believe the public has a right to know what its government is doing, particularly when it comes to something as important as Internet regulation. I have studied the 332-page plan in detail, and it is worse than I had imagined. So today, I want to correct the record and explain key aspects of what President Obama’s plan will actually do.
Pai then broke down six points he believes the public are being “misled” about by the President and the FCC. Those six points are:
1. The plan doesn’t include rate regulation, a claim Commissioner Pai calls “flat-out false.” From his statement:
The plan repeatedly states that the FCC will apply sections 201 and 202 of the Communications Act, including their rate regulation provisions, to determine whether the prices charge by broadband providers are “unjust or unreasonable… Thus, for the first time, the FCC would claim the power to declare broadband Internet rates and charges unreasonable after the fact.
2. The plan is aimed at pro-competitive broadband service offerings that benefit consumers, which Pai warns will actually create a regulatory headache. His words:
The plan expressly states that usage-based pricing, data allowances — really, any offers other than an unlimited, all-you-can-eat data plan — are now subject to regulation. Indeed, the plan finds that these practices will be subject to case-by-case review under the plan’s new “Internet conduct” standard.
Pai also warns that the plan clearly places things like data allowances on mobile “on the chopping block,” which could mean consumers using less data will end up paying for those who use more.
3. In contrast to the “light-touch” regulation that has been applied to the Internet up until now, the plan gives the unelected members of the FCC “broad and unprecedented discretion to micromanage the Internet.” How? Well, Pai held up interconnection as an example, stating:
The plan states that the FCC can determine when a broadband provider must establish physical interconnection points, where they must locate those points, how much they can charge for the provision of that infrastructure, and how they will route traffic over those connections.
4. The real winners from the plan will, in fact, be lawyers. Pai again:
The plan allows class-action lawsuits — with attorneys’ fees — should any trial lawyer want to challenge an Internet service provider’s network management practices or rates. Indeed, the plan expressly declines to forbear from sections 206 and 207 of the Act, which authorize such private rights of action.
Translated: Get ready for a flurry of lawsuits. Or, as Pai described it, “more litigation and less innovation.”
5. The plan is ripe for regulatory creep. Specifically:
The plan is quite clear about the limited duration of its forbearance determinations, stating that the FCC will revisit the forbearance determinations in the future and proceed in an incremental manner with respect to additional regulation. In other words, over time, expect regulation to ratchet up and forbearance to fade.
6. The plan “opens the door to billions of dollars in new taxes on broadband.” This point, really, should concern everyone outside of the regulatory bubble. Pai’s explanation:
The plan repeatedly states that it is only deferring a decision on new broadband taxes (such as Universal Service Fund fees and Telecommunications Relay Service fees, among others)—not prohibiting them. And it takes pains to make clear that nothing in the draft is intended to foreclose future state or federal tax increases. Indeed, the plan engage in the same two-step we saw last year with respect to the E-Rate program: Lay the groundwork to increase taxes in the first order, then raise them in the second. One independent estimate puts the price tag of these and other fees at $11 billion.
That’s $11 billion that would be passed on to consumers, by the way, all so the FCC can apply outdated, railroad-era regulation in order to achieve something we already have: an open Internet.
Pai ended his remarks by calling on the President and the FCC to release the plan to the public before the Commission enshrines it into law. “We should have an open, transparent debate,” he stated, and given the six points described above, it’s hard to argue with him. Here’s hoping the President and Pai’s fellow Commissioners are listening.
You can check out Commissioner Pai’s full remarks at the FCC website.
Our Co-Chairman Bruce Mehlman and Larry Irving have a column in USA Today warning that the FCC risks stunting progress on the Internet. An excerpt:
[T]he war reached new heights this week, as FCC Chairman Tom Wheeler proposed regulating our most advanced companies based on the rules designed for our oldest.
For a majority of innovators and entrepreneurs around the nation, partisan paralysis is unwelcome news, likely to spawn years of litigation, cloud investment certainty and potentially slow our economy’s most powerful engine. For objective policy analysts, the partisan intensity surrounding the net neutrality debate is unnecessary and counterproductive. Bad politics is making for bad policy.
Check out the full column over at USA Today.
Says Congress should resolve the Open Internet debate with targeted legislation aimed at reinstating the 2010 Open Internet Rules and not imposing public utility regulation on broadband
WASHINGTON, D.C. – February 4, 2015 – In response to press reports highlighting the Federal Communication Commission’s (FCC) policy direction on new Open Internet rules, IIA issued the following statements from Rick Boucher, a former Democratic congressman who chaired the Energy and Commerce Subcommittee on Communications and the Internet and serves as honorary chairman of the Internet Innovation Alliance (IIA), and former Assistant Secretary of Commerce under Clinton – now IIA Founding Co-Chairman – Larry Irving:
From Congressman Boucher:
“I urge Chairman Wheeler to reconsider his plan to treat broadband services under common carrier rules. Subjecting broadband to public utility regulation under Title II is unnecessary for assuring continued Internet openness and would carry deeply harmful consequences. Internet infrastructure investment would be stifled at a time when we have a national goal of extending high-speed Internet service to 98 percent of Americans.
“A better way to preserve the open Internet, protect consumers and promote innovation is to encourage the private investment necessary to support the deployment of high-speed, next-generation broadband nationwide. I’m confident in Congress’ ability to secure a win for our nation with a bi-partisan legislative solution that empowers the FCC to re-promulgate the 2010 Open Internet Rule but precludes the imposition of onerous Title II regulations. This outcome would protect the Open Internet by remedying the D.C. Circuit’s objection that the Commission lacks the statutory authority to act and maintain the existing light-touch regulatory environment that is welcoming to high-speed broadband investment.”
From Larry Irving:
“Imposing Title II regulation on broadband Internet primarily will benefit lawyers. Endless litigation will create additional uncertainty in the market and impact Internet innovation and investment as companies and investors try to figure out what provisions do or do not apply in a new Title II world.
“Democrats primarily have driven the net neutrality debate, but today Republicans in Congress stand ready to work on a bipartisan basis on legislation aimed to ‘keep the Internet open.’ If an open Internet is the goal, why is the only acceptable mechanism for achieving that goal a centuries-old regulatory framework? Preserving the open Internet through bi-partisan legislation, achieving and declaring victory on an important issue, steering clear of interminable and disruptive litigation, and reducing consumer costs by veering away from antiquated Title II regulation would seem to be the better alternative.
“For more than two decades, from the earliest days of the Internet, I along with most Democrats involved in development of our nation’s Internet policy, have advocated a light regulatory touch for the Internet. I still believe that to be preferable to utility-style regulation for the fast-moving and constantly evolving Internet. But, as important, to craft the right solution for America, we need to end the partisan politics around the Open Internet issue and work towards and embrace bi-partisan solutions.”
Earlier today, our Co-Chairman Larry Irving appeared on The Morning Briefing to break down the current debate over net neutrality. Among Irving’s points: net neutrality can be ensured without Title II, Congress will surely need to act at some point, and the FCC’s current path could easily become mired in litigation for years. Check out Irving’s full interview below.