Washington Report: FCC Commissioners continue to clash on contentious issues, Congress steps up oversight efforts
By Bob Deegan
our last report the FCC has been quite busy dealing with contentious issues such
as the set-top box proposal, Internet service provider privacy NPRM, Lifeline reform
and, most importantly for our neck of the woods, USF reform for rate-of-return
carriers. (See Lifeline Order sets new
standards for supported broadband, strengthens verification process and FCC USF Reform Order outlines two paths for
rate-of-return carriers in this issue.)
of these items is worthy of debate in its own right, but one thing that binds
them all is the continued partisan divide at the FCC and concerns over FCC
process. These issues and the press for process reform have spilled over to
Capitol Hill. Congress has picked up its FCC oversight efforts over the last
two months with both chambers holding oversight hearings in March at which all
five FCC Commissioners testified.
Senate hearing focuses on rural issues
During a Senate Commerce Committee hearing,
RoR USF reform received some attention from Sen. Jerry Moran (R-Kan.), who
asked whether rural providers will be able to pay for prior investments under
the Order. Commissioner O’Rielly said he doesn’t expect there to be any
dire effects based on prior business decisions and that situations of
significant impact would be reviewed on a case-by-case basis.
Sen. Amy Klobuchar (D-Minn.) asked whether the FCC expects standalone
broadband support, through the Order, to drive rural broadband deployment.
Chairman Wheeler said he would like to think it would go through the roof, as
the Order makes sure the money is going to holes in the broadband map. The USF reform
discussion also led into an exchange on the need for USF contributions reform. Additionally, Wheeler and
Commissioner Pai engaged in what has been a customary back and forth of
partisan fireworks regarding the Open Internet Order. Lastly, Sen. John Thune
(R-S.D.) spent a considerable amount of time discussing the need to reauthorize
the FCC for the first time in 25 years. To that end, he has introduced the FCC
Reauthorization Act (S-2644), which will likely have gone through
a mark-up by the Committee by the time you read this.
FCC process discussed at House hearing
FCC process was what stoked the
fires at the House Energy and Commerce communications subcommittee oversight
hearing, particularly the FCC’s refusal to release documents prior to votes
being undertaken by the full Commission. In a discussion on the ISP Privacy
NPRM, Rep. Greg Walden (R-Ore.) repeatedly attacked Wheeler and said the
process “flies in the face of open government … and needs to change.”
Appropriations Committee also hears from two commissioners
Following the oversight hearings,
the appropriations process also kicked off for Fiscal Year 2017. Chairman
Wheeler and Commissioner Pai appeared before the Senate Appropriations
Subcommittee on Financial Services and General Government in April to discuss
the FCC’s 2017 budget request of $358 million plus an additional $124 million
for spectrum auction purposes.
The subcommittee covered a lot of
ground during the hearing on issues such as spectrum policy, cybersecurity,
Lifeline and ISP privacy. However, RLEC issues did play a major role in the
hearing with Sen. John Boozman (R-Ark.), chairman of the subcommittee, focusing
heavily on the USF Reform Order right out of the gate, asking about the implementation
timeline and when RLECs would have support for standalone broadband. Wheeler said
implementation would be this year and that he didn’t have a specific timeline
on when funds would start flowing. It was here that Commissioner Pai took the
opportunity to explain why he dissented to the Order in part. He explained that
the Order was exceedingly complex as compared to his proposal and, going
back to the issue of FCC process, raised the fact that no one was able to
review the Order before its release to fix any issues. He then discussed the multi-step
process for coming up with broadband loop support and expressed frustration,
noting that the last time the FCC did something so complex (i.e., the 2011 USF Transformation
Order), it had to reconsider it seven separate times.
When asked if the $2 billion cap for
RLECs was too low, especially in light of the need for Alaska and tribal plans,
Wheeler explained how the Order was a bipartisan effort, said he believed it
was sufficient and the FCC was working on that assumption, and added, “but we
will find out.” Boozman also raised the rate floor issue and asked why the FCC
is forcing RLECs to raise rates. Pai responded that it is “crazy” that the FCC
is forcing carriers to raise rates when it is obvious the rural economy has
lagged behind urban areas and thus isn’t fair. Lastly, Sen. Moran asked for an
update on the rural call completion issue to which Wheeler responded that there
has been a 30 percent decrease in call completion complaints.
Seven communications bills teed
up in the House
In addition to all of the oversight discussed above, the House
Subcommittee on Communications and Technology held a hearing on seven separate communications
Perhaps the most notable of these bills are:
The subcommittee voted the bills out to the
full committee on April 20.
Industry awaits Circuit Court decision on net neutrality
Some bills have also recently passed through
the full House. On April 15, the House voted, largely along party lines, to pass
H.R. 2666, the No Rate Regulation
of Broadband Internet Access Act, which will prohibit the FCC from regulating the retail rates charged by Internet
service providers for broadband Internet service access. This bill would likely
face a veto threat should it also move through the Senate, but another open
Internet related bill, H.R.
4596, the Small Business Broadband Deployment Act that would extend the small
business Internet service providers exemption from the enhanced transparency
rules and set the threshold at 250,000 subscribers or fewer, moved through the
House by a vote of 411 – 0 and has more promising prospects.
Meanwhile, as of the writing of
this article, Washington continues to await the D.C. Circuit Court’s order on
the Petitions for Review of the Open Internet Order and pending the outcome
there is some speculation the order could spur legislative efforts on the
broadband issue in the courts and Congress
In the North Carolina and Tennessee municipal
broadband cases being litigated in the 6th circuit, oral arguments
were held in March. With no obvious hints from the bench, the industry and
state commissions are waiting to see what the court decides.
Recently, Rep. Marsha
Blackburn (R-Tenn.), Vice Chair of the House Energy and Commerce Committee,
spoke out against municipal broadband and cited several examples where the
taxpayer was left holding the bill from a failed municipal broadband project.
She said private entities should face competition, but not competition from the
government. Blackburn also mentioned her bill, H.R. 1106, which would strip the
FCC of its ability to tell states whether they could restrict municipal
broadband efforts or not. The bill has 11 sponsors from 7 states, including
North Carolina and Tennessee, the two states fighting the FCC on municipal
broadband in the 6th Circuit.
Two recent papers focus on the municipal broadband issue:
- A State Government Leadership
Foundation study, entitled The Impact of Government-Owned
Broadband Networks on Private Investment and Consumer Welfare, claims,
among other things, that subsidized municipal entry is prone to be predatory.
Dr. George Ford, Chief Economist of the Phoenix Center for Advanced Legal and
Public Policy Studies, authored the study.
- The Congressional Research
that presents: arguments for and against municipal broadband; the role of the
FCC; the 2015 FCC Order granting the petitions to preempt state laws in North
Carolina and Tennessee that restricted the expansion of community broadband
services; and recent Congressional actions.
Congress, FCC will continue their focus on telecom issues
all this on their plates, it will be a busy year for Congress, especially for members
up for re-election this November. At the FCC, while telecom issues are a major
focus right now, the agency will also need to deal with procuring FY 2017
funding and a possible move to a new headquarters building. So the next edition
of this report doesn’t promise to be any shorter than this one.
Bob Deegan is senior government
relations counsel. He can be reached at firstname.lastname@example.org. Colin Sandy contributed to this
article. Colin is senior regulatory attorney in NECA’s Washington D.C. office.
He can be reached at email@example.com.