GOP Lawmakers Leave Net Neutrality to FCC to Pressure Dems

By Kyle Daly

Republican lawmakers are waiting for the Federal Communications Commission to revamp net neutrality rules before moving legislation to codify changes, in what telecom industry sources told Bloomberg BNA is a bid to gain leverage over Democrats who are resisting a rewrite.

The GOP strategy, telecommunications policy sources told Bloomberg BNA, is to persuade Democrats to come to the negotiating table by offering them a choice: either work with Republicans later on net neutrality legislation or leave the issue in the hands of the GOP-controlled FCC. A number of leading congressional Democrats have vowed to oppose any attempt to undermine the net neutrality rules adopted in 2015 by a Democrat-controlled FCC that prohibit internet service providers such as AT&T and Comcast Corp. from unfairly blocking or slowing data flowing across their networks.

Ultimately, Republican lawmakers want to write revised net neutrality rules into law to try to ensure the FCC’s net neutrality policy doesn’t change every time a different political party takes control of the agency, House Energy and Commerce Chairman Greg Walden (R-Ore.) told Bloomberg BNA.

“Congress should be the body that sets the policy in that area so that it’s clear, it’s well-understood, and you can get certainty in the marketplace,” Walden said.

But in the near term, Republicans are looking to new Republican FCC Chairman Ajit Pai — backed by a Supreme Court that likely would include Trump nominee Neil Gorsuch by the time any net neutrality case gets there — to kill certain aspects of the current regime. The FCC’s changes would then become the basis of net neutrality legislation in the Republican-led 115th Congress.

The Republican calculation is that, if confronted with rewritten FCC rules and a Supreme Court that may be more inclined to uphold them with Gorsuch on its bench, congressional Democrats will come to the table and help hammer out a bill.

Waiting on the FCC

Under former FCC Democratic Chairman Tom Wheeler, the agency approved an order that reclassified internet service providers (ISPs) as common carriers under communications law, and issued the current net neutrality rules under that regulatory rationale. Now, Walden and fellow House Republicans are counting on Pai’s FCC to take the lead on crafting a lighter-touch net neutrality regime.

“It’ll be up to the FCC to decide what they do and where they go,” Walden told Bloomberg BNA. Walden declined to specify what he’d like to see the FCC do with net neutrality, except for saying that he hoped the broadband reclassification would be reversed. Once the agency establishes a framework, Congress could start writing policy into law.

Rep. Marsha Blackburn (R-Tenn.), chairman of Energy and Commerce’s Communications and Technology Subcommittee, told reporters Feb. 8 that she intends to “let the FCC go in” and “make the first move” on loosening the regime established by the 2015 order—even though she’d pledged in December to take up net neutrality legislation “early in the next Congress.”

To be sure, it’s unclear whether Pai is on board with the congressional Republican strategy. Pai declined to say anything Feb. 7 to Bloomberg BNA about his net neutrality plans, or about any talks he’s had with lawmakers or congressional aides. In a Feb. 10 interview with Bloomberg News, Pai declined to say whether the agency would move before Congress to kill or weaken net neutrality. Whether the FCC acts first is “one of the things we are trying to figure out,” Pai said.

But the new Republican commission chairman has long been critical of the reclassification decision and a general conduct standard in the current rules. The standard allows the FCC to expand its definition of net neutrality violations through enforcement actions taken against industry practices not envisioned by the original rules. Telecommunications lawyers and lobbyists expect Pai to seek to roll back the broadband reclassification and craft looser rules that would prohibit the blocking or throttling of legal online content while otherwise leaving internet service providers to manage their networks without FCC oversight.

Compromise Unlikely Soon

For now, leading Democrats are digging in against potential changes to the net neutrality rules.

Sen. Edward Markey, D-Mass., promised a “political firestorm” if the FCC or Congress make any attempt to loosen net neutrality rules. Markey and four other Senate Democrats opposed to net neutrality rule changes spoke at a Feb. 7 news conference. Senate Minority Leader Charles E. Schumer (D-N.Y.) issued a supportive statement promising that “any attempt to roll back this rule and its protections would be foolish and will be met with fierce resistance by Senate Democrats.”

Republicans, who currently control 52 Senate seats, eventually will need a filibuster-proof 60-vote majority in the Senate for a net neutrality bill, and that means they’ll need to get some Democratic buy-in. Schumer’s stance against changing the rules makes it unlikely that would happen any time soon.

There’s also Democratic opposition in the House. Rep. Frank Pallone (D-N.J.), the ranking member of the House Energy and Commerce Committee, told Bloomberg BNA he’s also “very much opposed to” the FCC doing anything to undermine or repeal the current rules.”

Pallone said House Democrats haven’t discussed a net neutrality bill and see no reason to do so. “We don’t need to have a replacement, obviously, because it’s in effect,” he said.

Not all Democrats are vehemently opposed to net neutrality changes. Sen. Bill Nelson (D-Fla.), ranking member of the Commerce Committee—the panel that would take up net neutrality legislation in the Senate— said in a Feb. 7 statement that “only Congress can provide lasting safeguards” for net neutrality principles. Standing by a position he’s long held, Nelson said he’s “still open to finding a bipartisan legislative solution.”

Supreme Court Still In Play

The courts could pose their own threat to the current rules. A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit in June 2016 affirmed the current rules and reclassification decision after a group of petitioners led by industry group U.S. Telecom challenged the FCC order ( United States Telecom Assoc. v. FCC , D.C. Cir., 15-01063, decision 6/14/16 ). The challengers have asked the full D.C. Circuit to take up the case, but people on both sides of the net neutrality debate have long argued it’s highly unlikely that will happen. If the case is appealed to the Supreme Court and accepted for review, though, Trump’s selection of Gorsuch for the Supreme Court could spell trouble for the existing rules.

The Supreme Court likely wouldn’t rule on net neutrality until 2018 at the earliest, by which point Gorsuch, of the Tenth Circuit, may be confirmed. A recent concurring opinion Gorsuch wrote from the appellate bench suggests that he could target just the sort of agency authority the FCC asserted in its net neutrality order.

In its legal defense of the order, the FCC relied on Chevron deference, the principle named for a landmark 1984 Supreme Court case ( Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 843-44, 104 S. Ct. 2778, 81 L. Ed. 2d 694 (1984)) that says federal agencies can interpret vague statutory language to define their own authority over an issue. The agency took an even broader view of Chevron than is conventional, holding that it didn’t need to show that market conditions had changed in order to reclassify broadband.

Gorsuch called Chevron, and a subsequent Supreme Court ruling on an earlier FCC classification of internet service, the “elephant in the room” in an August 2016 concurring opinion he authored in another case, Gutierrez-Brizuela v. Lynch, 834 F.3d 1142, 2016 BL 273118 (10th Cir. 2016). Gorsuch said the principles enshrined by Chevron and the subsequent case “permit executive bureaucracies to swallow huge amounts of core judicial and legislative power and concentrate federal power in a way that seems more than a little difficult to square with the Constitution of the framers’ design.”

Tech entrepreneur Daniel Berninger, who is among the petitioners in the U.S. Telecom-led challenge to the existing net neutrality rules, told Bloomberg BNA he believes the case is “right up Gorsuch’s alley.” Berninger believes Gorsuch’s strong interest in revisiting Chevron could influence a court that already has four conservative-leaning justices. Only four Supreme Court justices are needed for the high court to agree to hear a case.

There is a strong chance that Pai will move to reverse all or part of the current rules before the Supreme Court has a chance to weigh in. That would obviate the need for the current challenge to move forward.

Under that scenario, the same public interest groups that supported the current rules would likely mount a court challenge to Pai’s action. There, too, Gorsuch’s take on Chevron could play a role if a challenge to GOP net neutrality rules gets to the high court. Pai opposed the FCC’s invocation of Chevron in his dissent from the 2015 FCC order, and his legal rationale for reversing reclassification would likely hinge, at least in part, on arguing that the FCC overstepped its statutory authority when it reclassified. That would chime with Gorsuch’s apparent position on the extent of regulatory authority, suggesting that Gorsuch may side with Pai’s approach.

Republicans are hoping that the combination of a GOP-controlled FCC and a Gorsuch-influenced Supreme Court will help them get net neutrality legislation across the finish line during the 115th Congress.

[With assistance from Todd Shields.]

To contact the reporter on this story: Kyle Daly in Washington at kdaly@bna.com

To contact the editor responsible for this story: Keith Perine at kperine@bna.com

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