Net Neutrality Vote by FCC Unlikely Before January Meeting

The FCC’s Nov. 30 meeting is expected to be dedicated to two spectrum proposals outlined by Genachowski last week (CD Oct 21 p1), though the chairman doesn’t have to circulate orders for that meeting until Nov. 9, a week after the elections. The Dec. 15 meeting is likely to focus on changes to the Universal Service Fund, including creation of a Connect America fund to provide USF support for broadband, though Genachowski has declined a number of times to offer a timetable on key upcoming votes.

Rep. Henry Waxman, D-Calif., chairman of the Commerce Committee, is waiting for the election outcome and will try to reach a deal afterward, a House staffer told us. The FCC will likely wait for a conclusion to that effort before moving forward on its own, and the commission likely won’t act this year, the staffer said. Waxman said earlier that he wants the FCC to reclassify if Congress can’t reach a deal. Earlier this month, a GOP staffer at the Senate Commerce Committee said he doubted Congress could pass net neutrality legislation this year (CD Oct 13 p1).

If Republicans take control of the House, as several late polls predict, Genachowski would face considerable pushback from the Hill. House Commerce Committee Ranking Member Joe Barton, R-Texas, and three other Republicans vying for the top job on the committee next year, have opposed Genachowski’s “third way” reclassification plan. Rep. Fred Upton, R-Mich., seen by industry as the favorite for the job, said last week that FCC regulations are “smothering the economy” (CD Oct 20 p5).

"There are several dockets at the FCC that are ripe for action -- special access, wireless data roaming, retransmission consent, just to name a few,” said Derek Turner, Free Press research director. “It’s far past time for this chairman to stop worrying about the politics, and make the long-overdue policy decisions that are needed to help consumers and promote competition.” The message from Congress that the FCC should reassert its authority over broadband has been clear, Turner said. “What’s unclear is how long the commission will continue to kick the can down the road and hold up necessary decisions on responsible public policy."

Michael Calabrese, director of the Wireless Future Program at the New America Foundation, said he would not be surprised if the FCC doesn’t take on net neutrality or broadband reclassification before the January meeting. “We continue to take the position that FCC decisions on reclassification and network neutrality principles cannot happen soon enough,” he said. “Both issues are fully developed on the record. It will be clear enough by a December meeting that Congress cannot enact legislation this complex and controversial in a lame duck session -- and possibly not even next year.” Calabrese said a USF revamp itself “could be on shaky ground until the commission clarifies its authority. The commission should simply exercise its existing authority and let Congress decide later if it wants to strike a different balance."

Paul Gallant, a Concept Capital analyst, also won’t be surprised to see a vote pushed until 2011, he said. “The Waxman bill on net neutrality and reclassification attracted fairly broad support among stakeholders, so it wouldn’t be a big surprise if Genachowski waited to see whether the new Congress would try to build off the key elements of the Waxman bill."

"The FCC currently appears to be taking a politically measured approach to its handling of net neutrality,” said Jeff Silva, Medley Global Advisors analyst. “Any pressure for the FCC to move forward in the near term is arguably outweighed by political considerations associated with next week’s midterms. At this point and going forward, Chairman Genachowski will have to be especially sensitive to signals from Capitol Hill before contemplating further regulatory action.” Numerous factors weigh against a quick vote on net neutrality, Silva said. “Getting a political deal on net neutrality during a lame duck session of Congress will be challenging, though not necessarily impossible,” he said. “Debate over the politically charged issue may well bleed into 2011.”

The FCC should act as soon as possible, especially if Republicans take control of the House or Senate in January as a result of next week’s elections, said Public Knowledge Legal Director Harold Feld. “I think Genachowski is much better off making a decision while Congress is still firmly in Democratic hands,” Feld said. “Whether the Democrats lose control or not, Congress in January will be much more hostile to anything Genachowski has put forward as acceptable for network neutrality. Delay has not been his friend until now. It will not suddenly become his friend after November 2."

Randolph May, president of the Free State Foundation, a net neutrality opponent, said the FCC should not hurry a decision. “There are changes that can be implemented in both these two areas that would promote economic growth and consumer welfare, while anything the commission does with respect to net neutrality regulation is much more likely than not to be harmful to consumers,” he said. “Genachowski really needs to just resolve to put the net neutrality issue aside unless and until the FCC receives a grant of authority from Congress to address it.”

A senior FCC official Monday fired back at critics of the pace of action at the commission. “While they are busy handing out waffles and making posters, we are focused on creating jobs and protecting consumers,” the official said. “In the last month alone, the FCC has opened up white spaces, transformed E-rate, modernized E-911, promoted set top box innovation and taken action to prevent bill shock.”