New Congress Likelier to Advance Telecom Act Rewrite, if Not Entangled in Partisan Priorities

A GOP-controlled Capitol Hill is likely to charge forward on telecom and media overhaul in a powerful way in the 114th Congress, advancing on issues it could never make ground on with two divided chambers, industry lobbyists and observers told us. Expect action on several key priorities, including overhaul of the Communications Act and potentially more partisan measures such as net neutrality and stopping FCC pre-emption of state laws restricting municipal broadband, they said.

Sen. John Thune, R-S.D., is expected to chair the Senate Commerce Committee in the next Congress. He has outlined an agenda of updating the Communications Act in coordination with his House Republican counterparts as well as his desire to move forward with Local Choice, a broadcast a la carte proposal that would revamp retransmission consent rules.

Lobbyists and observers see potential for certain more partisan issues to advance -- bills aimed at net neutrality and municipal broadband -- and several feared combining those efforts with any bigger overhaul. Some pointed to FCC process overhaul as other legislation that will now likely advance in a GOP-led Congress.

“The calculus on both those issues will involve whether including them will preclude a presidential signature at the end of the day,” said Rick Boucher, a former Democratic chairman of the Communications Subcommittee, of net neutrality and municipal broadband questions becoming wrapped up in any Communications Act overhaul. He judged it “entirely feasible” that Congress could pass a bill by the end of next year that would receive White House approval. In the next Congress, “front and center is going to be a statutory reform of the Communications Act,” said Boucher, co-chairman of the Internet Innovation Alliance, which has AT&T as a member.

“I sense that Republicans on the Hill are itching to start a bipartisan dialogue on new telecom-related legislation,” said Robert McDowell, a former Republican FCC commissioner now with Wiley Rein. “The challenge with a comprehensive rewrite is a lot of interested parties.” The “broader” the bill, the more “friction,” he judged. McDowell acknowledged what he considered an “outstanding question” of how much of the next Congress would “be spent adjusting the FCC’s course in some ways,” depending on how it acts on net neutrality and whether it moves to pre-empt state laws restricting municipal broadband. McDowell suspected possible legislative action if the FCC “oversteps its bounds,” which could include reclassifying the Internet as a Title II telecom service, as some net neutrality advocates demand, McDowell said.

Partisan Telecom

If the FCC enacts net neutrality rules in the coming months, they would presumably take effect immediately if not stayed by the courts, said Telecommunications Industry Association Vice President-Government Relations Danielle Coffey. “Congress will have to move quickly to address what [FCC Chairman Tom] Wheeler has done.” Coffey considered a House bill introduced by Communications Subcommittee Vice Chairman Bob Latta, R-Ohio, earlier this year (HR-4752) that would prevent Title II reclassification: “That’s something that could gain more traction and more easily slide through.”

“If any network neutrality legislation is considered at this point, it will be an effort to adjust -- and I use that word in the most generous way possible -- what the FCC does with the open Internet order,” Boucher said. He said bills passed for political messaging purposes are “rare” in telecom and also considered the challenge that will remain in advancing controversial legislation in the Senate -- it would require 60 votes, which Republicans lack, despite their gains.

Net neutrality and municipal broadband legislation of any sort was seen as impossible in a divided Congress, which now may no longer be the case. The House approved an amendment this summer from House Commerce Committee Vice Chairwoman Marsha Blackburn, R-Tenn., that would stop any FCC efforts to preempt state laws restricting municipal broadband networks.

“I’m definitely concerned,” said Chris Mitchell, director of the Community Broadband Networks Initiative at the Institute for Local Self-Reliance, about such measures gaining traction in the new Republican Congress. “I fully expect Thom Tillis to work with Marsha Blackburn to limit competition.” Tillis, who has been a Republican state lawmaker, won the race to become North Carolina’s next senator Tuesday and has written to the FCC in opposition to any state law pre-emption. Mitchell emphasized that the issue is less partisan on the local level and suspects any congressional action would be a “short-term limitation,” he said: “They’re going against the tide.” If Congress goes after FCC pre-emption on this front, it would be “deeply unpopular,” he added, “hopeful” of a presidential veto.

“Cloture will stop most things, with the exception of appropriations,” Coffey said, predicting FCC appropriations as a possible battlefield calling for a presidential veto depending on what passes. With both chambers controlled by Republicans, lawmakers may dig into some of these policies in more nuanced ways, she said, with some of these debates not falling along traditional party lines. For example, a Republican lawmaker from a rural area may be more receptive to municipal networks, she said.

Congress will have “more ability to act” on net neutrality with what will be “a more emboldened Republican Senate,” said Veronica O'Connell, CEA vice president-congressional affairs. The change could make the FCC “even more cautious” in developing net neutrality rules, she said.

“The administration has been really cryptic about what it believes in its heart of hearts,” said Everett Ehrlich, former undersecretary of commerce in the Clinton administration and president of ESC Co., which advises telecom companies. He is also a senior fellow with the Progressive Policy Institute. President Barack Obama has used the vocabulary of net neutrality advocates who worry about paid prioritization, “but it’s never taken out the hammer” of backing Title II reclassification, he said.

Communications Act Rewrite Compromises?

Ehrlich opposes Title II reclassification and believes congressional Democrats should, in the new Congress and in advancing telecom overhaul, consider “giving up the ghost of the more extreme view of how the Internet is supposed to work,” he said. A bigger compromise is possible if Democrats give up Title II, he said. The idea that paid prioritization would turn ISPs into editors is “calumny,” but reassurances could be written into any update, he said. Ehrlich imagined a broader telecom rewrite package that, in addition to those assurances, tackled issues central to the digital divide, ones that represent “what the real liberal agenda ought to be,” he said. “How could they say no?”

In overhauling the Communications Act, go after “the low-hanging fruit,” recommended CEA’s O’Connell, pointing to areas of potential bipartisan agreement such as reallocating federal spectrum for commercial use. Congress should take “a strong look at legacy regulation that may be limiting investment in broadband or video services,” she said. Boucher and McDowell also emphasized the need for spectrum legislation. Boucher highlighted the IP transition and the need to kill any statutory barriers to a full IP transition. “The spectrum crunch isn’t going away,” Boucher said, calling “meaningful incentives” to federal agencies to give up spectrum “the only feasible approach.”

“Tech and telecom policy is one area where there is great opportunity for consensus, bipartisan efforts,” said Information Technology and Innovation Foundation telecom policy analyst Doug Brake. “The Republicans now have the opportunity to lead and drive towards consensus.” Brake suspected “narrower questions pertaining to the appropriate jurisdictional scope of the FCC probably get folded into a broader update” and hoped for a focus on spectrum and tweaks to the Miscellaneous Receipts Act on that front. “Republicans will likely keep a tight leash on the FCC through oversight hearings, the appropriations process and the like,” he added.

Free Press Policy Director Matt Wood suggested hedging bets on any Communications Act update. It’s “a time-consuming process no matter who's in charge,” he said, saying the 1996 Telecom Act was “a bipartisan achievement” that the FCC should enforce and not abandon.

Mitchell fears that if the act is rewritten, it would “be largely Verizon or Comcast or those players” calling the shots, he said.

The Obama administration should step up and seize a Communications Act overhaul while it still has the chance, Ehrlich recommended, saying it has not been as out front on such policy issues as it could have been. The administration “never created a recipe for long-term compromise,” which may be harder now, but much is “in the mix,” from the IP transition to privacy, he said. “For the Democrats, this could be the last time the train’s in the station,” Ehrlich said, considering a possible White House win by Republicans in 2016 that he, as a Democrat, said he fears. “The opportunity for compromise is absolutely right there.”