Net Neutrality Legislation Likely Imminent in 2015

Sen. Bill Nelson, D-Fla., was the first to invoke "Title X" in an interview with us at the Capitol in mid-November (see 1411130049). He brought it up a second time at the Capitol in December (see 1412120057). Both times Nelson described Title X as a plan that involves thinking “outside the box,” initially in the context of net neutrality and an alternative to Title II reclassification, and later when asked about a rewrite of the Communications Act. “I call it Title X,” he said of the “solution." Nelson will be the ranking member of the Commerce Committee in the next Congress.

Others from industry and Capitol Hill have framed Title X as an idea circulating among Hill Republicans. The idea seems driven by Republicans, who want to pass legislation before the FCC issues net neutrality rules, one Hill staffer said. FCC Chairman Tom Wheeler has said the commission will issue rules in the coming months.

Title X seems to be driven by Hill lawmakers themselves rather than the ISPs, and would codify the core net neutrality principles of the FCC’s 2010 order and those that President Barack Obama proposed in November, one media industry official familiar with the legislative push but not heavily involved told us. This legislation would give the FCC authority for net neutrality rules without what the official sees as the more “extreme” Title II “baggage” and likely legal challenges. He emphasized that ISPs have indicated backing for net neutrality rules and the consensus for such consumer protections.

Thune Eager for Legislation

A spokeswoman for Sen. John Thune, R-S.D., didn’t comment on whether he's responsible for or backing this specific Title X proposal but said he favors net neutrality legislation and believes that Congress would need to act “fairly soon” in 2015 before the FCC issues rules.

Thune, incoming chairman of the Commerce Committee, “is very interested in finding a legislative solution to protect the open Internet, especially if it means keeping the FCC from imposing public-utility regulations on the Internet,” his spokeswoman said. “Each time it has tried to regulate the Internet, the FCC has been overruled by the courts because existing telecommunications laws were written decades ago for a completely different era. The most straightforward approach would be for Congress to update and modernize the laws to take into account technological transformations while not discouraging the private-sector investment and innovation that is critical for consumers and our nation’s modern economy.”

Nelson and Republicans may be split on when to advance net neutrality legislation -- Nelson would prefer to wait until the FCC issues its own net neutrality rules, one telecom industry lobbyist told us, while Republicans would want to move before any FCC rules. Republicans have strongly opposed Title II reclassification, and many expect the new FCC rules to involve Title II.

“Timing’s not really the issue here,” a Nelson spokesman countered Wednesday when asked about Title X legislation. “The bottom line is this: protect consumers and keep the Internet free and open for all. Those will be the guiding principles for Sen. Nelson as he works with Sen. Thune and the FCC on issues related to net neutrality.”

Several congressional Democrats led by Sen. Ed Markey of Massachusetts specifically have backed Title II reclassification of broadband, as had Obama following the midterm elections in a public recommendation to the FCC. Markey recently led a letter of House and Senate Democrats calling for Title II. Other senior Democratic senators -- including Maria Cantwell of Washington; Patrick Leahy of Vermont; and Harry Reid of Nevada -- recently pressed GOP leaders to honor strong net neutrality protections without calling for Title II reclassification as a means. Nelson didn't sign either letter.

Compromise Possible?

If Congress acts before the FCC issues rules, the effort would have to be stand-alone legislation rather than through any greater Communications Act rewrite, said the telecom lobbyist familiar with legislative discussions. Republicans could pursue the Title X option alone, without Democratic backing, but may not have the votes, she said, expecting it would be vetoed in that scenario if it did pass.

“I very much think a deal can be reached, if only the FCC will give the process time,” said TechFreedom President Berin Szoka, who backs such a legislative answer. “And I'm not sure Wheeler's willing to wait -- unless he recognizes what we see as the significant legal weaknesses in any reclassification and forbearance approach.” Nelson seems “open to the idea of legislation” given his talk of Title X, Szoka said. He wondered about Wheeler’s level of confidence in winning legal battles in Title II reclassification and forbearance and suggested that if doubtful, he may be “quietly signaling” to Nelson, House Commerce Committee incoming ranking member Frank Pallone, D-N.J., and others “that he needs a legislative solution,” potentially better than the results after litigation.

Szoka predicts Hill leaders would need to convince the FCC by early February that net neutrality legislation could move forward if they want to delay a potential FCC vote on the matter at its meeting Feb. 26. This convincing would require both private communications between the Hill and the FCC and a public showing from Hill leaders that progress is occurring, likely through a bill introduction or at the very least circulation of a discussion draft, he said.

To keep the Internet and telecom market “open for business,” any law would need the same principles as the Telecom Act of 1996, said Free Press Policy Director Matt Wood: “It doesn't matter if these principles reside in Title II, Title X, or Title x, y and z while we're at it. All that matters is whether the law gives the FCC power to promote competition and protect users, just as Title II already does today.”

Title II is “still good law,” said Wood. He wondered how any telecom law rewrite could really improve the 1996 act, pointing to its principles of universal service and competition. He slammed the way Thune’s spokeswoman characterized Title II: “Common carrier obligations and nondiscrimination protections apply in all sorts of competitive and deregulated markets, like wireless voice and enterprise broadband,” he said, disputing that the title is only public utility regulation or would involve regulating the Internet.

House lawmakers also have net neutrality in their crosshairs -- Communications Subcommittee Republicans plan to bring Wheeler in for an oversight hearing focused on net neutrality in early 2015, and Subcommittee Vice Chairman Bob Latta, R-Ohio, intends to reintroduce his legislation aimed at preventing Title II reclassification (see 1411100033). USTelecom and NCTA, associations representing ISPs and vocal in their Title II concerns, declined comment on Title X.