Industry Welcomes Latta Legislation Targeting Title II Reclassification

HR-4752 is the latest in a series of legislative maneuvers for and against net neutrality rules, gestures that industry lobbyists typically doubt will go anywhere due to a Congress divided on net neutrality (CD May 21 p5). FCC Chairman Tom Wheeler has laid out a framework for new net neutrality rules under Communications Act Section 706, while asking questions about what it would mean to reclassify the service under Title II. A Latta news release framed the FCC NPRM as “a proposal to reclassify broadband Internet access under Title II as a telecommunications service rather than an information service” (http://1.usa.gov/1k4yNHg). Some net neutrality advocates, including lawmakers in the Congressional Progressive Caucus, have asked the FCC to reclassify to develop stronger net neutrality rules. Republicans in the House and Senate have sided with industry in warning of what they see as dire effects of reclassifying broadband.

Latta’s bill text said broadband “is an information service, and includes a service utilizing advanced telecommunications capability,” as it would insert in Section 3 of the Communications Act, and outlines what it judges to be a history of the FCC making clear this classification. “Imposing the obligations and requirements of title II of such Act on broadband Internet access service would severely harm broadband investment and create myriad negative unintended consequences,” said the bill text’s findings. The bill has no co-sponsors and is referred to the Commerce Committee.

NCTA and USTelecom back Latta’s bill, they said, pointing to what they consider an important light regulatory touch. USTelecom President Walter McCormick said the bill is “consistent with the conclusions reached by previous FCCs, under both Democratic and Republican Chairs.” ITTA also supports it, President Genny Morelli said in a statement. She praised the legislation for “wisely” acknowledging “the potential threat excess regulation poses to the future of the Internet and broadband investment."

The Telecommunications Industry Association also favors the Latta approach, Vice President-Government Affairs Danielle Coffey told us. “It just makes so much sense.” TIA views Title II regulation as a “nuclear option” for the FCC and doesn’t really see what reclassifying broadband under it would accomplish if the agency can forge ahead with net neutrality rules under Section 706, she said, questioning whether Title II-based net neutrality rules would really be any stronger. Coffey believes the Latta bill may have better prospects in Congress due to its focus on the question of legal authority, with “less room for layers” and “less stickiness,” an approach that’s “cleaner” and more “cut and dry,” rather than on net neutrality rules directly.

Although Democrats and Republicans are divided on net neutrality rules, some Democrats have vocally opposed reclassification. Rep. Gene Green, D-Texas, wrote (CD May 15 p6) the FCC earlier this month with 19 other House Democrats, warning of Title II’s “burdens and restrictions.”

Title II covers all telecom services, whether Internet Protocol-enabled or not, Computer & Communications Industry Association Vice President-Government Relations Cathy Sloan told us by email, with the FCC decision to treat broadband as an unregulated “information service” coming only a decade ago: Yahoo, “Google, eBay and Amazon were all founded under the common carrier framework for dial up and DSL Internet access.” Sloan argued that “times have changed” since the FCC decision and pointed to “heavy local network market consolidation toward monopoly and duopoly,” making a reconsideration of “dubious” information-services classification sensible. People expect two-way Internet connections to work like phone service, “completely devoid of variations based on the commercial preferences of the phone company,” she said. TIA’s Coffey countered the idea that Title II regulation allowed for industry success: “We have evidence that after we came out from under Title II regulation, there was an immediate increase in our sales.”

"I wouldn’t be shocked if something like this passed the House, but I doubt it would move in the Senate,” said Guggenheim Partners analyst Paul Gallant of Latta’s bill, pointing to several Democrats who would desire to keep the Title II option on the table in case FCC net neutrality rules under Title I get rejected again in court. Coffey was also more hesitant about the Latta bill’s Senate prospects: “I don’t know if it could get past the Senate.”

House Communications Subcommittee Chairman Greg Walden, R-Ore., and House Commerce members of both parties have repeatedly resisted reclassifying broadband, a Republican committee aide told us. The aide cited a letter (http://1.usa.gov/1k14nW9) from Walden, Commerce Committee Chairman Fred Upton, R-Mich., Committee Vice Chairman Marsha Blackburn, R-Tenn., and Latta to the FCC outlining deep worries over the possible harm of reclassification. Committee leaders are clear on the issue, the aide said, pointing to the Latta bill as one potential avenue for the subcommittee to address the scenario of FCC reclassification.

"Congress must take action to put an end to this misguided regulatory proposal,” Latta declared in a statement. He said his bill would provide “certainty” for all “participants in the Internet ecosystem” to continue investing in broadband. Latta said it would be “reckless to suggest, let alone adopt” any policies threatening Internet success. He called Title II regulation “bureaucratic red tape” coming with “80 years of regulatory baggage.”