Pai's 'Restoring Internet Freedom' Draft Tops Tentative Agenda for December Meeting

The draft is one of seven items to be voted on at the Dec. 14 commissioners' meeting. The tentative agenda also contains items on emergency alert system blue alerts (see 1711220048), broadcast national TV ownership, rural healthcare, twilight towers, commercial mobile radio service (CMRS) licensing and electronic delivery of cable communications.

Pai continued to make his case in the media for the "restoring internet freedom" draft. He appeared "on NPR, Fox News, CNBC, and Fox Business to discuss his plan," tweeted Chief of Staff Matthew Berry. Commissioner Mignon Clyburn tweeted that Pai's "proposal to dismantle" net neutrality is "worse than one could imagine."

The draft's declaratory ruling would restore the classification of broadband internet access service (BIAS) as a Title I information service, said a fact sheet attached to the draft in docket 17-108. Title II telecom service treatment and common-carrier regulation has hampered broadband investment and innovation, said the draft ruling, which devotes much attention to justifying Title I reclassification, including under the Supreme Court's Brand X precedent. It would reinstate mobile broadband as a private mobile service classification -- eliminating CMRS classification and common-carrier regulation -- and return to a previous "interconnected service" definition before the agency in 2015 asserted telecom jurisdiction over IP interconnection.

The ruling would clarify reclassification's ripple effects on other frameworks, "including the need for a uniform federal regulatory approach to apply to interstate information services" such as BIAS, which could be disrupted by state and local regulation. "We therefore preempt any state or local measures that would effectively impose rules or requirements that we have repealed or decided to refrain from imposing in this order or that would impose more stringent requirements for any aspect of broadband service that we address in this order," said the draft. It wouldn't disturb the traditional state role "in generally policing such matters as fraud, taxation, and general commercial dealings, so long as" it "does not interfere with federal regulatory objectives."

The draft report and order would eliminate the bright-line open internet rules against ISP blocking, throttling and paid prioritization of traffic, along with the "vague and expensive Internet Conduct Standard, under which the FCC micromanaged innovative business models." Telecom Act Section 706 is "hortatory" and not a grant of regulatory authority, said the draft. "In the unlikely event that ISPs engage in conduct that harms Internet openness, despite the paucity of evidence of such incidents," the draft would rely on "other legal regimes -- particularly antitrust law" and the FTC's consumer-protection authority. By scrapping Title II broadband common-carrier regulation, the draft would "restore" the FTC's "ability to protect consumers online from any unfair, deceptive, and anti-competitive practices" without the 2015 regulatory burdens and costs, the draft said. The FTC also would be able to protect broadband privacy and combat data breaches, it added.

The report and order would return to a 2010 transparency rule, with some modifications. BIAS providers would be required to "publicly disclose accurate information regarding the network management practices, performance, and commercial terms" of their broadband services "sufficient to enable consumers to make informed choices" and "entrepreneurs and other small businesses to develop, market, and maintain Internet offerings," said a draft transparency rule (in a two-page rule section) based on Section 257 authority. These disclosures are to be made via a public website or through the FCC. ISPs specifically would be required to disclose blocking and throttling (other than "reasonable network management"), affiliated prioritization, paid prioritization, congestion management, application-specific behavior, device attachment rules and security. The order also has some cost-benefit analysis.

The other draft order would decline to include "additional materials" in the "already-voluminous record." It would deny an Incompas request to include confidential documents from four recent ISP transaction proceedings, and it would deny a National Hispanic Media Coalition request to include informal open internet complaint materials and open a new comment cycle.

Clyburn cited a host of problems with the draft in her own fact sheet, saying it would increase uncertainty, threaten "innovation at the edge," allow network favoritism, prevent state and local consumer protection, undo the previous "light-touch, court-approved" Title II regime, and empower an agency, the FTC, that has "never enforced net neutrality protections."

Outside parties continued to weigh in on the Pai draft, including Sen. Roger Wicker, R-Miss., House Judiciary Committee Chairman Bob Goodlatte, R-Va., the Internet Innovation Alliance and internet entrepreneur Daniel Berninger, who welcomed it. Public Knowledge, the Computer & Communications Industry Association, and Open Society Foundations fellow Gigi Sohn were among those who criticized it.

Meeting Notebook

The national ownership cap draft NPRM on the December agenda seeks comment on changing or eliminating the 39 percent population coverage national ownership cap and UHF discount but draws no tentative conclusions, as expected (see 1711210044). “Does a 39 percent cap still make sense, or should it instead be set at a different level?” asks the draft notice. The item seeks comment on whether the FCC has the authority to alter the cap, and if it does and then alters the cap, whether the UHF discount should be eliminated or changed. “Is the current UHF discount causing harm to consumers in any way or are there other drawbacks to retaining it?” It also asks what sort of grandfathering should be allowed if the cap is altered, and highlights Pai’s objections to the lack of permanent grandfathering in the 2016 order eliminating the UHF discount.

Another agenda item would open a rulemaking to review the Rural Health Care Program of USF support and grant relief to RHC providers facing potential cuts in funding year 2017. An NPRM would seek comment on the appropriate RHC Program budget level, said a fact sheet attached to the 78-page draft. It specifically would seek comment on "increasing the RHC Program’s $400 million annual cap and creating a prioritization mechanism in the event of demand exceeding the cap," and on "establishing a process for evaluating outlier funding requests and reforming the calculation of urban and rural rates in the Telecommunications Program to improve fairness and transparency," among other things. An attached draft order would waive an RHC Program cap on a one-time basis and direct the Universal Service Administrative Co. to carry forward any unused program funds from prior years into FY 2017. It would also allow "service providers to voluntarily reduce their rates for qualifying FY 2017 requests while keeping constant" the USF support amount.

A commercial mobile radio service presumption would be axed, with licensees seeing their mobile services regulated by how they use spectrum rather than spectrum band being used under the proposed CMRS report and order on the agenda. It follows up on an NPRM issued in 2016.

The twilight towers public notice on the agenda would solicit comment on excluding from National Historic Preservation Act Section 106 review the collocation of wireless facilities on those towers. Commissioner Brendan Carr this week said the aim is streamlining wireless infrastructure deployment (see 1711210045). Twilight towers are those built between 2001 and 2006 and that didn't necessarily go through Section 106 review because the agency hadn't yet provided guidance on compliance.

The FCC earlier this year issued a declaratory ruling allowing cable operators to email annual notices to customers (see 1706190074) and the electronic delivery of cable communications NPRM on the agenda would propose to adopt a rule letting cable operators email various other written communications with an opt-out mechanism for consumers to continue to receive paper notices. Those communications would include responses to billing dispute complaints and to consumer requests. The draft NPRM also seeks comment on whether to update the requirement broadcasters mail carriage election notices to MVPDs.