FCC Should Avoid California-Style Net Neutrality Rules, House Republicans Say

The Federal Communications Commission should avoid issuing “burdensome” net neutrality rules similar to ones currently in effect in California, House Republicans say.

“We urge you not to impose stringent net neutrality regulations that may result in Americans losing their internet services,” 26 Republican lawmakers on the House Energy and Commerce Committee said Friday in a letter to acting FCC chief Jessica Rosenworcel.

“We can all agree that harmful practices such as blocking, throttling, and anticompetitive behavior should not be permitted. But we can achieve this without heavy-handed overregulation,” the letter states.

The agency is currently deadlocked with two Democratic and two Republican commissioners. But after President Biden appoints a fifth member, Rosenworcel is expected to propose new net neutrality rules.

Rosenworcel vocally supported the agency's 2015 net neutrality order, which classified broadband as a utility service and prohibited internet service providers from blocking or throttling traffic, and from charging higher fees for prioritized delivery.  

That order didn't explicitly ban zero-rating -- the practice of exempting certain data from consumers' caps.

Instead, the order included a “general conduct” standard that barred carriers from hindering the ability of consumers and content companies to reach each other online. The Obama-era FCC interpreted that standard as barring carriers from zero-rating their own content.

In 2017, the Republican-led FCC voted to revoke the Obama-era rules and reclassify broadband as a telecommunications service -- effectively stripping the agency of authority to police carriers' broadband policies.

Former FCC Chairman Ajit Pai, who shepherded the repeal, called the former rules “heavy handed,” and claimed they depressed investment.

But net neutrality advocates say rules are necessary to prevent broadband providers from limiting consumers' ability to access streaming video, search engines and other online services and content.

After the agency repealed the nationwide rules, California and other states passed their own versions of broadband regulations. California's net neutrality law largely created the 2015 FCC rules, but with more explicit rules against some forms of zero-rating.

Those rules went into effect late last month, after a federal judge rejected a challenge brought by the broadband industry. At around the same time, the Veteran's Administration questioned whether broadband providers would be allowed to continue to zero-rate VA Video Connect -- a telehealth app used by veterans. The Veterans' Administration's move reportedly was prompted by two internet service providers.

The Republicans who wrote to Rosenworcel raised the same issue.

“Unfortunately, we are beginning to see the negative effects that burdensome utility-style regulations would have on American consumers,” the letter states. “We cannot risk losing lifesaving programs like VA Video Connect by imposing heavy handed regulations.”

California's law prohibits carriers from zero-rating “some internet content, applications, services, or devices in a category of internet content, applications, services, or devices, but not the entire category.”

The signatories say California lawmakers didn't define the word category, “leaving us to guess at its meaning.”

But net neutrality proponents, including Stanford Law School professor Barbara van Schewick, say California's law need not limit veterans' ability to use the telehealth app.

van Schewick said in a blog post last month broadband carriers have “easy solutions” that would help “veterans and all Californians, while also complying with California’s net neutrality protections.”

“Carriers could exempt all conversational video apps like Skype, Zoom and the V.A.’s telehealth app from people’s data caps,” she wrote. “That kind of category-based zero-rating is allowed under California’s net neutrality law.”

She added that broadband providers could also offer “more affordable unlimited plans just for veterans.” 

The Republican lawmakers also characterize zero-ratings programs as “pro-consumer,” writing that those programs “provide free data to their customers for certain applications.”

But net neutrality advocates argue that programs such as AT&T's former “sponsored data” -- which enabled wireless subscribers to stream HBO Max without having the data count against their caps -- contribute to higher fees for unlimited data plans.

“Zero-rating only works when you have a low data cap. That creates an incentive for ISPs to keep low data caps and keep unlimited plans expensive,” van Schewick wrote last month. “That creates an incentive for ISPs to keep low data caps and keep unlimited plans expensive.”

The lawmakers claim also broadband investment dropped after the FCC's 2015 vote in favor of net neutrality rules, and picked up again after the 2017 repeal.

Those claims stem from a report by the Information Technology and Innovation Foundation, and from broadband industrylobbying groups.

But Free Press, which advocates in favor of net neutrality rules, says that its analysis, based on reports filed by publicly traded broadband providers, shows investment dropped during Pai's tenure as FCC chairman.

“Comparing 2019 investment levels to those in 2016, AT&T’s capital expenditures are down 17 percent; Comcast’s capital investments are down 14 percent; Charter’s are down 10 percent; CenturyLink’s are down 21 percent; and Cincinatti Bell’s are down 45 percent (all inflation-adjusted values),” Free Press wrote last September in an FCC filing.

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