Net Neutrality: Title II Fight Heats Up

Net Neutrality: Title II Fight Heats Up With the FCC preparing to vote on Net Neutrality on Feb. 26, the war of words continues to rage, while Congress continues its attempt to get in on the action.

Sen. Dean Heller (R-NV) introduced the FCC Process Reform Act of 2015 last week, seeking to promote "transparency, fairness, and efficiency," at the Commission. Specifically, the bill seeks to require that the FCC publish the exact rule or any amendment to a rule at least 21 days before a vote.

This is, in part, a reaction to the fact that the complete details of the Net Neutrality order are not currently available. FCC Chairman Thomas Wheeler has issued a fact sheet and spoken publically about the issue, but the entirety of what he called the "comprehensive proposal" that will be voted on at the next open meeting is not available for perusal.

"As the influence of the FCC continues to grow with innovation, it is imperative its actions not be clouded in opaqueness or secrecy," said Heller after introducing the legislation. "Right now, we don't even know what a major decision like the FCC's Net Neutrality order says. How is that an example of solid rulemaking?"

House Communications and Technology Subcommittee Chairman Greg Walden (R-OR) applauded Heller's bill, noting that it closely resembles legislation approved in the House and introduced in the Senate each of the past two Congresses. "Reforming and improving operations at the FCC has long been a priority for the committee. Our efforts have enjoyed broad bipartisan support in the House, only to fall short in the Senate. That will change with this new Congress."

At the heart of the matter, at least concerning Net Neutrality, is the notion that the FCC - as indicated by Wheeler in a speech at the Silicon Flatirons Center in Boulder - will use a "modernized version of" Title II of the Communications Act of 1934 as well as "significant powers" in Section 706 of the Telecommunications Act of 1996 to "protect broadband Internet access." (For more information, see

Wheeler acknowledged in his remarks that he originally felt Internet openness could be ensured via a "commercial reasonableness" test to define how ISPs should behave. He said he changed direction after hearing the opinions of "countless consumers and innovators," and deciding that the "commercially reasonable" test could be swayed toward the ISPs' commercial arrangements.

The Senate Committee on Homeland Security and Governmental Affairs and the House Committee on Oversight and Government Reform are not so sure it was just the consumers and innovators that changed the FCC's direction. Both have written letters to Wheeler indicating concern that the White House may have had an inappropriate influence on the decision to reclassify broadband services.

Committee Chairman Sen. Ron Johnson (R-WI) noted that President Obama "directly weighed into the debate" in November 2014, stating outright his belief that broadband service should be regulated under Title II. Johnson cited reports that at the time Wheeler had been prepared to make a proposal that opposed the president's views, but subsequently canceled a December vote on the issue. In his letter, Johnson asked that Wheeler provide a detailed explanation of why he changed his mind and turn over the original draft proposal that he'd planned to circulate in November and December. Johnson also has asked Wheeler to answer questions about his communication and that of other FCC employees with the White House about Net Neutrality and to provide phone logs as well as any other documents pertaining to this communication. A deadline of Feb. 23 was given.

Similarly, Committee Chairman Rep. Jason Chaffetz (R-Utah) asked that these types of documents be made available by Feb. 20 and that "knowledgeable staff" be made available for a briefing. "I am interested in hearing from the FCC on this matter, in particular how the FCC communicated with the White House and other Executive Branch agencies," Chaffetz wrote.

In the meantime, here is how some cable organizations have been weighing into the debate:

Time Warner Cable (NYSE:TWC): During the company's quarterly earnings call, Arthur Minson, CFO, said essentially that while the impact depends on the exact details of the report, "It almost goes without saying that to the extent that what they propose creates uncertainty around the regulatory regime in which we will be operating that it is likely to chill our enthusiasm for investment."

Charter Communications (NASDAQ:CHTR): Thomas Rutledge, CEO, noted during his quarterly earnings call that his company has never been asked to prioritize content by any website and that Net Neutrality was Charter's business model. "Because it was essentially not a problem, I signed up for the light touch Net Neutrality regulation previously. And I think it was working just fine. It got overturned by the courts, but I think we have a heavy-handed regulatory solution for a problem that doesn't exist. And while it doesn't change the status quo in any way, it's - somebody has a bazooka aimed at you, and that's an uncomfortable situation."

American Cable Association: The ACA has been very vocal about that fact it believes that Title II regulation would harm small and medium-sized Internet service providers and has asked that the FCC forbear from applying the Title II regulatory obligations to them. "Smaller ISPs have no incentive to harm the openness of the Internet. Nearly all face competition from one or more wireline ISPs, competing to attract and serve customers who would depart if their ISP engaged in any business practices that interfere with their Internet experience," ACA President and CEO Matthew Polka wrote in a blog post.

(Thanks to for transcripts of the quarterly earnings calls.)

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