GOP Lawmakers Query FCC on Enforcement, Net Neutrality

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By Lydia Beyoud

Nov. 20 — Congressional Republicans in both chambers peppered the FCC with questions about its Enforcement Bureau and the impact of its net neutrality rules on small businesses, in two letters sent to agency Chairman Tom Wheeler late Nov. 19.

GOP senators weighed in on the practices of an Enforcement Bureau that has become more aggressive under its current chief, Travis LeBlanc. Against the backdrop of an ongoing legal dispute over the agency's controversial Open Internet rules, a raft of House Republicans wrote the FCC, urging it to exempt small Internet service providers from transparency requirements.

Five members of the Senate Commerce, Science and Transportation Committee queried Wheeler about how the Enforcement Bureau functions, asking him for information on internal rules and procedures for conducting investigations and enforcement actions, particularly those related to how the agency calculates fines.

The GOP quintet—Sens. Dean Heller (R-Nev.), Ron Johnson (R-Wis.), Jerry Moran (R-Kan.), Roy Blunt (R-Mo.) and Steve Daines (R-Mont.)—referred to a proposed fine against Hilton Worldwide Holdings Inc. and other hotels and conference venues for blocking conference attendees' Wi-Fi hot spots as an example of what the lawmakers say is a bureau practice of exceeding its authority. Companies lack clear rules governing the use of Wi-Fi jamming technology, “or whether the alleged use of such technology even falls within the scope of the FCC's authority,” the lawmakers said. They suggested the FCC could have initiated a rulemaking proceeding to clarify the issue rather than levy a fine.

“Please provide the legal justification for imposing a penalty on a company in the absence of specific FCC rules governing such conduct,” the GOP senators wrote in the letter.

An FCC spokesman said the agency was reviewing the letter but declined to make any further comment.

The agency has spoken out on the Wi-Fi jamming issue several times, including in a Jan. 27 enforcement advisory warning that hotels should not block guests' personal Wi-Fi hotspots. 

Lobbying Effort

The senators' letter comes amid an ongoing lobbying effort by a range of telecommunications groups and other industries concerned by the Enforcement Bureau's actions and record-breaking fines. “Concerns have been raised about the EB aggressively pursuing substantial, unprecedented, and seemingly arbitrary fines against licensees and non-licensees alike,” the senators wrote.

LeBlanc said in April that he believed large fines aid deterrence for violations of the Communications Act of 1934. He also indicated the bureau was focusing its resources on “big issues” impacting larger numbers of consumers, compared with bureau actions in years past, such as with its prior focus on indecency fines.

The senators asked the FCC to provide information by Dec. 3 on a range of bureau-related information. They asked the commission to provide data on every enforcement action resulting in a penalty of $1 million or more over the last 10 years, and how the penalties were calculated. The lawmakers also asked for details on every proposed fine of more than $100,000 since 2005, including details on whether or not the agency had actually collected on the penalties.

Small Business Exemption

Separately, all the Republicans on the House Energy and Commerce Communications and Technology Subcommittee and the House Small Business Committee asked the FCC to permanently exempt all small Internet service providers from the transparency provisions of the agency's Open Internet Order.

The FCC provided a temporary exemption to small businesses with fewer than 100,000 broadband customers as part of its rules. “Now is the time to recognize the disproportionate impact that the requirements would have on these ISPs and their customers and make the exemption permanent,” the letter from 35 House Republicans said.

An FCC spokesman declined to comment on the issue, but pointed to paragraphs 174 and 175 of the Open Internet Order. That language directs the Consumer and Government Affairs Bureau to review the exemption and determine whether to keep it, and if so, to what degree.

The letter echoed claims put forward by ISP trade groups, such as the American Cable Association and the Wireless Internet Service Providers Association, that the FCC's transparency requirements place an undue burden on small providers.

The same argument is one of many raised by ISPs fighting the Open Internet rules in court and during the FCC's rulemaking proceeding. In July, broadband providers pointed to a record $100 million proposed fine against AT&T Inc. for alleged violations of the transparency rule as prime evidence that the agency underestimated compliance costs with that provision of the rules.

To contact the reporter on this story: Lydia Beyoud in Washington at lbeyoud@bna.com

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

Text of the Senate letter is at http://src.bna.com/bcc.

Text of the House letter is at http://energycommerce.house.gov/sites/republicans.energycommerce.house.gov/files/114/Letters/20151119FCC.pdf.