House Republicans Unveil Ax for FCC Funding, Net Neutrality

The draft bill, unveiled Wednesday, would allocate $314.8 million for the FCC for FY 2016. The agency’s budget has been frozen for years at about $340 million annually. The FCC requested about $50 million more than that level for FY 2016, with Wheeler telling appropriators in both chambers he needs money for a headquarters move and IT improvements. An FCC spokesman declined comment on the GOP draft proposal.

The draft proposal also includes several appropriations riders, as subcommittee ranking member Jose Serrano, D-N.Y., has feared may happen for months. Subcommittee Chairman Ander Crenshaw, R-Fla., told us last month that he was less inclined to grant the FCC’s funding request and emphasized his awareness of the net neutrality litigation (see 1505280030). It also includes $302.5 million for the FTC, slightly above its FY 2015 level of funding but a few million below its FY 2016 request.

If the draft proposal were enacted, the FCC would be forbidden from moving to “implement, administer, or enforce” its February net neutrality order until the first date of the final disposition of Alamo Broadband v. FCC, USTelecom v. FCC and CenturyLink v. FCC, all cases challenging the order. No funds "may be used to regulate, directly or indirectly, the prices, other fees, or data caps and allowances (as such terms are described in paragraph 164 of the Report and Order on Remand, Declaratory Ruling, and Order in the matter of protecting and promoting the open Internet, adopted by the [FCC] on February 26, 2015 (FCC 15–24)) charged or imposed by providers of broadband Internet access service ... for such service, regardless of whether such regulation takes the form of requirements for future conduct or enforcement regarding past conduct,” it said. FCC Commissioner Ajit Pai had recommended the subcommittee defund the net neutrality order when testifying.

“Appropriating funds for net neutrality while three key court cases remain unresolved does not make common sense, never mind the fact that the FCC’s attempt to regulate the Internet through net neutrality would stifle healthy competition, drive up prices, and put burdensome regulations in place,” Crenshaw told us in a statement. “Americans continue to benefit from the free and open nature of the internet, and I am staunchly opposed to any heavy-handed encroachment on it.”

“A $25 million decrease in funding is a staggering number, especially compared to the agency’s budget request,” countered Serrano in a statement. “I am concerned by Republican efforts to restrict the agency’s ability to regulate internet access and protect net neutrality. This bill limits the FCC’s ability to promote an open and fair internet, and all the innovation and investment it fosters, by limiting the funds available to the agency and specifically preventing it from continuing to take action on this important issue. This process is far from over though, and I will continue working with my Democratic colleagues in Congress to end up with a final bill that allocates at least some additional funding for the FCC and allows us to move forward on net neutrality.”

The proposal also includes a partisan process item similar to one recently wrapped in the FCC Process Reform Act, legislation cleared by the House Commerce Committee. The rider would forbid the agency from executing any item going forward “unless the Commission publishes the text of such rule, amendment, or repeal on the Internet Web site of the Commission not later than 21 days before the date on which the vote occurs,” coinciding with the item’s circulation. Democrats on the House Commerce Committee and Wheeler all worried about the effects of this proposal.

“Making telecom policy through spending riders usually doesn’t succeed,” cautioned Guggenheim Partners analyst Paul Gallant. “But government shutdown politics are way above just the net neutrality debate. So this is definitely an interesting development.”

Free Press Policy Director Matt Wood slammed the proposal as a “sneak attack” on net neutrality. “Anyone who supports this measure is taking the side of the phone and cable lobby and hurting the rest of us,” Wood said. “Trying to hide such an important measure hundreds of pages into an appropriations bill, on an issue the public overwhelmingly supports, shows why so many people distrust and are disgusted by business in Washington.” Josh Stager, New America’s Open Technology Institute policy counsel, agreed. “By gutting the Open Internet Order and blocking future attempts to protect net neutrality, the bill tilts the Internet’s level playing field in favor of entrenched cable and telephone companies," he said in a statement. "A vote for this bill is a vote against consumers and small businesses, plain and simple. Congress should reject this legislation as swiftly as it was unveiled."

The subcommittee will mark up the measure at 9 a.m. Thursday in 2358-B Rayburn. The markup will likely be partisan, since Democrats have widely called for more funding and Serrano and Rep. Mike Quigley, D-Ill., have said they support the FCC request for a funding increase and oppose addressing net neutrality through this appropriations package. A Crenshaw spokeswoman said justification for funding levels will be found in a report released prior to full Appropriations Committee markup.