Genachowski Says He Didn’t Do Net Neutrality for Obama

"I didn’t discuss net neutrality with the president,” Genachowski told subcommittee member Darrell Issa, R-Calif. Genachowski said he was aware that Obama made net neutrality an issue of his campaign, but did not move forward with the rulemaking for that reason. Genachowski also agreed with Issa’s statement that the FCC chairman doesn’t “serve at the pleasure of the president.” Issa, also chairman of the Oversight Committee, has questioned the number and timing of Genachowski visits to the White House that took place before the December net neutrality order.

Goodlatte is “exploring the possibility” of updating antitrust laws but has “no definite plans,” the subcommittee chairman told reporters after the hearing. He might wait until courts resolve expected industry lawsuits against the FCC order. “If the courts were to say that this is permissible, then we'd have to weigh our ideas against that,” he said. “If the courts strike it down,” the subcommittee would have to assess whether antitrust laws are sufficient now or would need revision. Antitrust laws “could be adjusted” to make it “easier for smaller entities to bring antitrust actions,” Goodlatte said. “Then you wouldn’t have ongoing regulations; you'd simply have a perhaps easier, more streamlined way to challenge … unfair competition."

Rep. Zoe Lofgren, D-Calif., said that while an antitrust approach has merit, she was “completely satisfied” with the FCC order because it allows the FCC to “more nimbly” address net neutrality issues. But Goodlatte said the FCC didn’t have authority from Congress to make rules in the first place.

"While vitally important, antitrust laws alone would not adequately preserve the freedom and openness of the Internet, or provide enough certainty and confidence to drive investment in our innovation future,” Genachowski said. “Antitrust enforcement is expensive to pursue, takes a long time, and kicks in only after damage is done. Especially for start-ups in a fast-moving area like the Internet, that’s not a practical solution.” It wouldn’t work for Congress to add open Internet provisions to antitrust laws, because Internet technology is changing too fast,” Genachowski said.

But McDowell said existing antitrust and consumer protection laws would “prevent and cure any of the contemplated harms outlined in the order.” McDowell wanted the FCC to apply the “nongovernmental Internet governance model,” and have the commission “gather together all the nongovernmental entities that help run the Internet … to spotlight allegations of anticompetitive conduct and use existing antitrust and consumer protections laws” to address problems, he said.

Genachowski and McDowell disagreed on the impact of the Trinko case from the U.S. Supreme Court. In Trinko, the court reasoned that a consumer didn’t have an antitrust claim in alleging a breach of Verizon’s network sharing duties under the 1996 Telecom Act, because those rules didn’t alter antitrust law. Genachowski said the case raises “additional uncertainty” about relying on antitrust laws for net neutrality and other communications cases. But McDowell said Trinko wouldn’t apply to net neutrality complaints because the FCC doesn’t by law regulate the Internet. “Broadband Internet access, by the net neutrality order’s own admission, is not common carriage,” he said. “So therefore Title II would not apply. So therefore it’s unregulated. So therefore the antitrust laws would apply, even in the face of Trinko.” After the hearing, Goodlatte told reporters he agreed with McDowell’s assessment.

Genachowski said he didn’t think it was “necessary” to include a market power test in the FCC order,” but McDowell said the FCC should have. “Each time the government has looked at the broadband Internet access market, it has not found concentration of market power or abuse of that power,” McDowell said. But Genachowski replied that the Justice Department’s comments called the market “concentrated,” and the FTC chairman testified the same to the FCC.

Goodlatte asked Genachowski if the FCC’s order would still apply if the commission found that market competition was growing. “I'm sure that if very significant competition develops in the fixed broadband space, we would be asked to” review the rules “and we would take a look at what would be necessary under those circumstances,” Genachowski said. Goodlatte also asked the chairman if the FCC administrative process for reviewing net neutrality complaints would burden industry. Genachowski said the order’s transparency provision should reduce the number of complaints received by the FCC, and the FCC would encourage parties to resolve complaints on their own. “We see the FCC as a backstop that we hope is infrequently and maybe never used,” he said.

The FCC net neutrality rules “are strong and balanced, built on the Commission’s prior steps in this area, and rooted in the Communications Act,” Genachowski said in his opening statement. The rules are “not regulation of the Internet” but rather represent a “light-touch framework,” he said. “Since our action, investment has accelerated in both early-stage companies and in broadband networks.” McDowell said “nothing is broken” and Congress didn’t give the FCC authority to make its order. The FCC order “is likely to do more harm than good,” he said.

Subcommittee Democrats largely defended Genachowski and the FCC order. Judiciary Committee Ranking Member John Conyers, R-Mich., said he’s “not unhappy” with the FCC order, but thought it could have gone further. “The high-speed market is highly consolidated and anti-competitive,” Conyers said. “Let’s not start this conversation this morning with, ‘Everything’s OK.’ It’s far from OK.” Subcommittee Ranking Member Mel Watt, D-N.C., called the hearing an “unfortunate distraction” from more vital matters.

Some Democratic members raised committee jurisdictional issues because the Commerce Committee oversees communications. After the hearing, Goodlatte told reporters he has talked to Commerce Committee Chairman Fred Upton, R-Mich. “He knows of our interest in this and the approach we're taking,” Goodlatte said. “I haven’t attempted to reach any common approach,” because the Judiciary Committee isn’t ready to take any action, he said.

The House last month passed a resolution of disapproval under the Congressional Review Act to overturn the FCC net neutrality rules. Wednesday on the Senate floor, Sen. Al Franken, D-Minn., vowed to stop the House measure, H.J. Res 37, in the Senate. “The White House has stated that the President will veto this resolution, but I will be working hard in the coming months to make sure we have enough votes to stop this before it ever reaches the President’s desk,” Franken said.