House Moves to Expand Small ISP Transparency Exemption

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By Kyle Daly

March 16 — Legislation that would expand a transparency exemption for small broadband Internet service providers from the Federal Communications Commission's net neutrality rules sailed through the House on a 411-0 vote March 16.

Under the agency's rules, ISPs with fewer than 100,000 subscribers were made temporarily exempt from transparency requirements, including disclosure of information on promotional rates, pricing, and performance benchmarks. Following a one-year extension approved by the FCC late last year, the small business exemption was scheduled to sunset at the end of 2016.

The bill (H.R. 4596) by Rep. Greg Walden (R-Ore.) would extend the exemption for five years while also changing the definition of small business broadband providers to include those serving fewer than 250,000 subscribers. It would direct the FCC to submit recommendations and supporting data to Congress on small business reporting exemptions within six months.

“One of the most important responsibilities we have as a Congress is to protect and advocate for those who may not have assets to [navigate] bureaucratic red tape,” Walden said.

The measure now heads to the Senate, but it is unclear when that chamber might act. Senate Commerce, Science and Transportation Chairman John Thune (R-S.D.) intends to discuss the legislation with ranking member Bill Nelson (D-Fla.) and other committee members now that the House has voted, a committee spokesperson said. According to Walden, the Obama administration has signaled support for his bill.

Bipartisan Agreement

Before passing the House bill, Republican and Democratic lawmakers said the measure would reduce regulatory burdens on small, often rural ISPs, which would help expand broadband availability.

“Small ISPs do not have the resources the bigger guys do,” Rep. Dave Loebsack (D-Iowa) said. “That’s the important thing to remember with this bill.”

Loebsack said his home state has 99 counties, but 134 individual ISPs under the bill’s definition of small businesses.

Lawmakers said the five-year extension should give small ISPs time to prepare to comply with the enhanced disclosure requirements while the FCC mulls whether the exemption should be made permanent.

Rep. Marc Veasey (D-Texas) withdrew an amendment that would have required the FCC to answer whether a permanent exemption would increase access to services offered by small ISPs. Veasey said he was satisfied the bill as written would achieve the same end.

A coalition of broadband industry trade groups backed the bill in a March 15 letter to the House Energy & Commerce Committee leadership. Organizations including USTelecom, CTIA-The Wireless Association, the National Cable & Telecommunications Association, and the American Cable Association praised lawmakers for providing small broadband providers with “greater certainty.” The groups said small providers have sufficiently demonstrated to the FCC that complying with enhanced transparency requirements would “impose time-consuming and costly compliance obligations.”

Sen. Steve Daines (R-Mont.) introduced a related measure (S. 2283) on Nov. 16, 2015, but Thune's committee has not acted on it. That measure would make the exemption permanent and define small broadband providers as those with fewer than 1,500 employees or 500,000 subscribers.

Loebsack noted during House floor debate that House Democrats felt the 500,000-subscriber threshold was “too high” but were pleased with the 250,000-subscriber limit. Walden said a footprint of 250,000 customers is also the standard used by the Small Business Administration.

To contact the reporter on this story: Kyle Daly in Washington at

To contact the editor responsible for this story: Keith Perine at