The FCC will vote at the end of February on new net neutrality rules, setting the stage for what is likely going to be one of the largest technology policy battles of the year and perhaps beyond.
According to a Washington Post report, which cited unnamed FCC officials familiar with the matter, Chairman Tom Wheeler told his fellow FCC commissioners before the Christmas holiday that he plans to circulate a draft proposal internally next month with the aim of voting on the measure just weeks later. The FCC is scheduled to hold its February monthly meeting on Feb. 26.
FCC spokeswoman Kim Hart declined to comment on Wheeler's communications with his colleagues, according to the Post report, but confirmed the February timeframe for a vote. In November, after President Barack Obama urged the FCC to write the "strongest possible" net neutrality regulations and reclassify broadband as a common carrier service under Title II of the Telecommunications Act, the FCC said it would wait until 2015 to craft new rules.
What those rules will be still remains a mystery. The rules are intended to replace a 2010 order on net neutrality that was largely scrapped in January 2014 by a federal appeals court. The rules are designed to ensure that all lawful Internet content is treated equally regardless of its source or content, and that carriers cannot give preferential treatment or offer faster access to certain kinds of content if the content company pays for that access.
There has been a large grassroots movement to pursue a Title II route, a move favored by Obama and content companies like Netflix (NASDAQ: NFLX), as well as public interest groups. The idea is that a Title II reclassification, while potentially excluding some of the more onerous rate regulations under Title II, would put the FCC on firmer legal ground to issue net neutrality rules.
However, wireless carriers, ISPs and network technology vendors all oppose reclassification under Title II, arguing that doing so will hamper broadband investment and is unnecessary. Carriers have long argued against reclassification, but last month Alcatel-Lucent (NYSE: ALU), Cisco, Ericsson (NASDAQ: ERIC), Intel, Nokia Networks (NYSE:NOK), Qualcomm (NASDAQ:QCOM) and dozens of other network equipment and technology vendors publicly declared their opposition as well. Further, the CTIA has argued that even if the FCC goes ahead with a reclassification, mobile broadband would be legally exempt from such Title II rules because of how wireless broadband services are legally classified.
The new rules, regardless of their content, are likely going to spark a fresh round of litigation. Indeed, Verizon Communications (NYSE: VZ) CFO Fran Shammo said at an investor conference in November if new net neutrality regulations should pass, he is concerned that it will create a very litigious environment.
As the Post notes, the shift at the FCC implies the agency will not be able to avoid a showdown with Congress over net neutrality. Republicans are taking over the Senate and have retained control of the House, and are expected to introduce industry-backed legislation this month to potentially block the FCC from reclassifying broadband under Title II while seeking to enshrine net neutrality principles in law.
Indeed, according to a Wall Street Journal report, Republican lawmakers are looking at a number of different ways to block the FCC's rules, especially a reclassification under Title II, which they consider anathema. Options reportedly include legislation to block reclassification and cutting the FCC's already strained budget, as well as a little-known law that lets Congress void major rules of federal agencies. The dispute is so sharp that net neutrality could harm progress on other aspects of more bipartisan technology policy, such as cybersecurity and the allocation of spectrum, according to telecom lobbyists and congressional aides cited by the report.
- see this Washington Post article
- see this WSJ article (sub. req.)
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