FCC's O'Rielly Urges Agency To Avoid Writing New Internet Rules

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By Bryce Baschuk  

Jan. 27 --The Federal Communications Commission should avoid creating new net neutrality obligations for Internet service providers, FCC Commissioner Mike O'Rielly said in a speech at the Hudson Institute.

The FCC has yet to announce any regulatory response after a federal court threw out two of the agency's key net neutrality rules earlier this month. FCC Chairman Tom Wheeler previously said he plans to revisit the principles behind the agency's Open Internet Order, but hasn't offered any specifics (see separate report).

O'Rielly, in his Jan. 27 speech, said he doesn't expect the telecommunications marketplace to change much in light of the decision by the U.S. Court of Appeals for the District of Columbia Circuit to vacate the anti-blocking and anti-discrimination rules in the Open Internet Order.

“I do not see companies that are interested in significantly disrupting the current marketplace,” O'Rielly said. “I think it is in their best interest to help serve their consumers and I think it is in the best interest of consumers as well. So, I don't see that marketplace changing dramatically going forward and I would be reluctant to impose new obligations in this space going forward.”

Executives for Internet service providers (ISPs) such as Verizon Communications Inc., Comcast Inc. and AT&T Inc. have said that their commitments to an open Internet haven't changed as a result of the court's decision. Some proponents of the FCC's network neutrality rules had expressed concern that ISPs are now free to block and discriminate against their customers' communications without any regulatory repercussions.

Section 706 Misinterpreted

O'Rielly reiterated his belief that the court misinterpreted the intent of Section 706 of the of the Telecommunications Act of 1996. In the decision, D.C. Circuit Judge David Tatel affirmed that the section provided the FCC with adequate authority to create rules governing broadband Internet access.

“I disagree with the court's decision in this space because I believe the commission didn't have the authority to issue the rules,” O'Rielly said. “I think that 706 has been abused and it should be returned to its original intent that we helped create years ago.” O'Rielly was a Republican staff member of the House Energy and Commerce Committee in 1995 when the provision was being considered.

O'Rielly said that when Section 706 was written, Republicans held a majority in both houses of Congress and it was inconceivable that they would intentionally include such a broad grant of authority in the bill.

“That we would write something that secretly gave the commission authority over the Internet--and yet we never told anybody, we never wrote about it in any of our analysis or our summaries--it is very difficult for me, as someone who was there, to see the provision being interpreted as it is now.”

On its face, Section 706(a) of the Telecommunications Act directs the FCC to “encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans ... by utilizing, in a manner consistent with the public interest, convenience, and necessity, price cap regulation, regulatory forbearance, measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment.”

Under Section 706(b), the FCC is required to regularly “determine whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion” and take “immediate action to accelerate deployment of such capability by removing barriers to infrastructure investment and by promoting competition in the telecommunications markets.”

Section 706 generally includes “what people would refer to as congressional findings,” O'Rielly said. “I hope we can get back to the original meaning of the statute.”


O'Rielly offered four recommendations on the FCC approach to regulatory matters:

• The commission “must consider whether it has the authority to regulate, as well as realizing the confines of that authority.”

• The commission “must have verifiable and specific evidence that there is market failure before acting.”

• When the commission does intervene, its solution should be “carefully tailored and apply only to the relevant set of providers or services.”

• The “benefit of regulation must outweigh the burdens.”


O'Rielly said, “Championing economic freedom” will be his guiding principle when it comes to oversight of the communications industry. “Policy makers in Washington, D.C., should be constantly on guard against unnecessary restrictions that interfere with the freedoms of any willing buyer or seller in our economy,” he said. “We have no idea what types of products or services our regulations may discourage from coming to market.”

To contact the reporter on this story: Bryce Baschuk in Washington at bbaschuk@bna.com

To contact the editor responsible for this story: Heather Rothman at hrothman@bna.com

A video of the speech is available at http://youtu.be/CwKXA7TFu8Q.

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