FCC, FTC Commissioners Trade Barbs Over Which Agency Should Lead on Net Neutrality

“The order will undoubtedly raise Internet service costs” and “specifically permits the FCC to impose additional fees, raises the rate carriers must pay to deploy broadband, and opens the door to higher state and local taxes,” Goodlatte said in his opening statement. “The result is an estimated $11 billion in new taxes and fees.” He said heavy “regulatory compliance costs” would lead to an “army of lawyers and accountants.” It will slow broadband speeds and “discourage investment” due to the uncertainty, Goodlatte said.

Goodlatte asked Wheeler to walk through the “actual examples of bad conduct” rather than hypotheticals. Wheeler cited an instance from 2006. “That was eight years ago that took place, and we’re talking about the last three years,” Goodlatte interrupted. Wheeler said there have been more recent instances, citing blocking of applications and “limiting access to Google Voice” and Verizon’s August throttling of data speeds. “There would be a serious casualty of uncertainty” without FCC net neutrality rules, Wheeler said. He later brought up the draft legislation from Commerce Committee GOP leaders in the House and Senate that would codify net neutrality protections, suggesting those leaders also see “difficulties in the marketplace.”

“There are real threats to net neutrality,” said ranking member John Conyers, D-Mich. “Inaction is not an option.” He cited instances where ISPs operate “as monopolies or duopolies” and praised the expertise of the FCC in regulating the telecom industry in the name of public interest, judging antitrust enforcement “insufficient.” The commission rules “must be given an opportunity to take root,” he said, praising the order’s “key provisions.” Rep. Zoe Lofgren, D-Calif., said there's “immense” gratitude among her Silicon Valley constituents for the order. “I hope this hearing is just more whistling in the wind,” she said. Rep. Ted Deutch, D-Fla., slammed Republicans for making this a “wedge issue” to attack the White House.

Commissioner Ajit Pai said the FCC Title II reclassification would reduce competition, a cornerstone needed in the application of antitrust law. Pai praised “the scalpel of antitrust, not the sledgehammer of Title II” and argued the Justice Department and FTC would be “more effective.” He agreed with Goodlatte that “there was no problem to be solved here” and referred to “niche” examples that the FCC has fixated on.

FTC Commissioner Josh Wright agreed the FCC should do “nothing” on this front. FTC Commissioner Terrell McSweeny praised the FTC’s “important” role, such as tackling mobile cramming, but said “it is not always the most effective way to address policy issues in the economy.” She invoked a combination of antitrust enforcement and regulation and said net neutrality qualified as such an instance. It’s “not an either/or choice” between FTC enforcement and FCC rules, she argued.

Wright said reclassification will harm consumers by depriving the FTC of jurisdiction over broadband providers. McSweeney pushed for a repeal of the statute’s common-carrier exemption to ensure the FTC doesn't lose jurisdictional authority. “That is an idea that is definitely worthy of review,” Wheeler told Lofgren. “It is going to require legislation to resolve it. We are trying to take steps in the interim and make sure we have an MOU [memorandum of understanding] that says here’s how we’re going to be working together.” Wheeler called the FCC/FTC relationship a great “one-two punch.”

Rep. Doug Collins, R-Ga., is leading an effort among Judiciary Republicans to introduce a Congressional Review Act resolution of disapproval attacking the order. He told Wheeler the order isn't “grounded to the statute” and “will be struck down, rightly.” Heritage Action is lobbying conservatives to join Collins’ resolution (see 1503240058">1503240058). “We cannot regulate our way to better innovation here” or be “circumventing Congress,” Collins said, pressing commissioners on how “this monster that you’ve unleashed” will be “kept in check.”

Wheeler dislikes the idea of edge providers blocking content but said it’s less clear whether the FCC has authority to address that. The FCC is “myopically” focused on ISPs, Pai countered, saying the app Meerkat is “crippled” by Twitter. “Antitrust law is important; so is regulation,” Rep. Jerrold Nadler, D-Mich., said, calling for both to work in tandem. “I think Commissioner Pai and I have different views of the world,” Wheeler responded to a question from Nadler. Wheeler believes Pai sees edge providers as “behemoth” and ISPs as small but Wheeler sees a world wherein “there are three behemoth ISPs and thousands, tens of thousands, of innovative edge providers,” he said. Google is worth more than Comcast, T-Mobile and Verizon combined, Pai later replied.

CEA President Gary Shapiro worried that the order’s forbearance could be reversed and urged Congress to act, he told Goodlatte and Conyers in a letter. “A bipartisan Congressional agreement that forecloses these foreseeable and detrimental outcomes will benefit investment in broadband infrastructure, new services on the Internet and the clarity of law that American citizens expect and deserves,” Shapiro said. “A future FCC could change that order,” Goodlatte said when Wheeler argued that the order forbears from rate regulation.

Democracy for America emailed its supporters Wednesday asking people to contact lawmakers in support of the FCC order. “All this week, Republicans in Congress are dragging the FCC commissioners into hearing after hearing, including a House Judiciary Committee hearing happening today, to badger them about the bold decision they made,” said Campaign Manager Karli Wallace Thompson, linking to a form to contact Congress. “They're trying to rattle the commissioners and build up ammunition for a concerted legislative attack on this unprecedented Net Neutrality victory.”

“Stripping the FCC of its authority will only leave consumers vulnerable and encourage cable and telephone companies to continue to push the envelope on abusive practices,” said Public Knowledge Internet Rights Fellow Kate Forscey in a statement, saying the FCC and FTC have “complementary” roles. New America Foundation’s Open Technology Institute Policy Counsel Josh Stager slammed the “false choice” the hearing poses, in an op-ed for The Hill: “If the antitrust agencies are not clamoring for this debate, why is it being given a congressional platform?” said Stager, a former Democratic Senate staffer. “The answer requires acknowledgment of what the argument really is: an effort aimed at rolling back the FCC's Open Internet rules.”