Cruz Net Neutrality Threat Inspires Little Excitement

Cruz last week confirmed intentions to introduce the bill and attacked “the claimed authority” of “nebulous” Section 706, saying Congress rather than the FCC should act on net neutrality (CD May 15 p6). Cruz’s bill, according to the draft text, would kill a subsection mention of “price cap regulation” and add “measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment.” The legislation would eliminate another subsection provision that says “'removing [the word] barriers’ and all [the material] that follows and inserting ‘pursuing regulatory forbearance.'” Both Democrats and Republicans had introduced separate pieces of legislation earlier this year addressing the protection or elimination of net neutrality rules, respectively. Those bills have not moved and lobbyists have widely doubted that any net neutrality bills will be able to move due to congressional partisanship. On Tuesday, House Communications Subcommittee Vice Chairman Bob Latta, R-Ohio, also announced intentions to introduce a net neutrality bill, his focusing on the possibility of reclassifying broadband as a Title II telecom service (see separate report in this issue).

Free State Foundation President Randolph May is “very sympathetic” to the Cruz draft’s intent, he told us, saying he doubts Congress ever intended to grant such independent regulatory authority to the FCC in that section. “There may be other ways of amending Section 706 to constrain the FCC’s authority to regulate Internet providers, but at least Sen. Cruz’s bill is one way. And his proposed bill, along with other measures, such as the bill proposed on the House side by [Rep. Marsha Blackburn, R-Tenn.,] has the virtue of having Congress establish net neutrality policy."

Congress did not intend to provide the authority the FCC claims under Section 706, which a more careful court review would show, affirmed Earl Comstock, an attorney at Eckert Seamans who was one of the Republican Senate staffers responsible for the 1996 Telecommunications Act. Comstock, a former Comptel president, also agreed Congress should lead on overhauling communications law, pointing to the 1996 act and noting that Title II, both before and after 1996, “provides clear authority to the FCC to regulate the telecommunications component of Internet access, just as the FCC had been for doing under Title II since 1980 for Internet access using narrow-band dial up and broadband DSL.”

The Cruz bill would not be “a great idea,” countered Free Press Policy Director Matt Wood, “because it seems to suggest that there are no barriers to broadband investment -- which isn’t true -- and that even if there are, the FCC shouldn’t do anything about them.” Wood slammed the idea of crafting “real” net neutrality rules using the “scraps” of Section 706 and reiterated Free Press’s support for reclassifying broadband as a Title II telecom service.

"It’s a surprising approach, right?” said Public Knowledge Vice President-Government Affairs Chris Lewis. Cruz would be “actively gutting [Section] 706, which most of the companies seem to have no problems” abiding by net neutrality rules under, he said. Lewis judged it strange how the bill would kill language on removing barriers to infrastructure when Cruz emphasized in his statement last week the importance of investment and innovation. It’s “not clear what Sen. Cruz is getting at,” Lewis said. He expressed some doubt about how lawmakers who back net neutrality rules under Section 706 would react to such a bill. Of the often-repeated Republican talking point that Congress should lead on net neutrality, Lewis said Congress wrote Title II and Section 706 and surely can update them as it chooses, such as through the House-initiated overhaul of the Communications Act now underway. But “in the meantime, the FCC has a responsibility” to act in this space, Lewis said.

"What it means if he drops it is nothing,” said Christopher Yoo, University of Pennsylvania professor of law, citing the “very, very low” chance of such a bill’s enactment. “This is more about politics than it is policy … to satisfy some political constituents.” It would eliminate the ability of the FCC to write net neutrality rules under Section 706, leaving the agency with a single regulatory tool of forbearance, Yoo said. The FCC would interpret the bill as unlikely to pass and thus it’s unlikely to sway the current proceeding, he said.

The “draft legislation would make the problem worse, not better,” Comstock told us, pointing to multiple problems it would create. The Cruz text would confirm the idea that Congress had intended Section 706 to grant the FCC independent authority and it would restrict the agency and state commissions “to an even more nebulous assignment, namely that they are to ‘encourage’ deployment of advanced telecommunications capability by using regulatory forbearance only.” Comstock predicted that affirmation of unspecified regulatory forbearance would create years of proceedings in the agency and courts. “The far safer course of action,” Comstock advised, would be to simply repeal the section.

A Senate Democratic staffer confirmed the sense that the Cruz legislation would be unlikely to receive Democratic support. There’s more “political pressure” to reclassify than in the past, Yoo said. The Cruz bill may get backing from other Republicans, who would have cover because they know it won’t pass, he said. Title II, incidentally, allows providers to give different levels of service and doesn’t prevent the pay-for-play deals reclassification advocates have claimed, Yoo said, arguing that Wheeler’s Section 706-authorized net neutrality rules could actually have “more teeth” than any under Title II. “This is more about optics.”