Reaction May Make Genachowski Rethink Net Neutrality Vote, Tauke Says

Genachowski is trying to drum up industry support for a possible plan to impose net neutrality rules without reclassifying broadband, agency and industry officials said Monday. They said commission representatives have been sounding out officials from cable and telecom companies about whether they would agree to some sort of net neutrality provisions but without putting broadband transport under Title II of the Communications Act. Such conversations included the NCTA as well as telecom companies, industry officials said.

NCTA CEO Kyle McSlarrow was among participants at a Monday FCC meeting on the topic, a spokeswoman for the group said. Agency and industry officials said AT&T and Verizon officials also attended. A Verizon executive confirmed that Tauke was at the meeting. Spokespeople for AT&T and the FCC spokeswoman declined to comment.

"We don’t know what the FCC chairman plans to do,” Tauke told us. “It’s fair to say that he probably has the votes at the commission to pursue whatever agenda he wishes. I think that there are other external constraints which make it difficult to execute on the net neutrality issue, at least in the foreseeable future.” Tauke’s “guess” is that Genachowski “doesn’t want to trigger a confrontation with Congress,” the executive said. “Based on what we see, it appears that action now on the issue might get him and the new Congress off on the wrong foot.” Tauke was a Republican member of the U.S. House from Iowa from 1979 to 1991.

Tauke said the new Republican majority in the House has also made it clear it’s not happy with industry negotiations aimed at a net neutrality compromise. Verizon worked out an agreement with Google over the summer. “I think that the Republican majority in the house has made it clear to companies that they don’t like some of the things we've been doing as we attempt to reach some agreements on net neutrality,” Tauke said. “They just don’t want regulation in this space. They have been saying to the FCC that the agency should work with the Congress on the issue rather than strike out on its own.” Tauke said the response last week from Congress (CD Nov 22 p1) was “frankly, stronger than I would have expected.”

But Tauke said a compromise remains possible. “The major companies in the industry have repeatedly demonstrated that they're willing to live by certain principles,” he said. “Verizon, for example, has published on its website all of the principles that we agreed to with Google and we're abiding by those things and have told consumers we will and consumers can hold us accountable for that. So I think that there is room for compromise.” Tauke said broadband reclassification remains a “nonstarter” from the perspective of Verizon and of “most of the industry and clearly for a majority in Congress. … My sense is that reclassification is not an area where there can be any kind of consensus.”

Asked whether Genachowski is sending mixed signals on net neutrality, Tauke replied, “Given a choice we'd always like clarity. But if clarity means bad regulation, than we'd prefer not to have that."

McDowell said “speculation abounds” among members of the communications bar, Wall Street analysts and reporters about what the FCC might do at its December meeting on net neutrality. “Let me just say at the outset that as a commissioner of the Federal Communications Commission, appointed by two presidents and unanimously confirmed by the Senate, twice, that I have absolutely no idea what the FCC is going to do on the matter of net neutrality or when or even if,” McDowell said.

McDowell told reporters he sympathized with the tough task facing Genachowski as chairman. “Being chairman is much harder than being a regular commissioner,” he said. “All I have to do is swing at each pitch and he has to offer up each pitch. It remains to be seen what if anything happens. … I don’t know if anything will happen in December or at any other time.” McDowell said there is no wiggle room for him on his opposition to reclassifying broadband transmission as a Title II service.

"One question regarding the commission’s authority to regulate Internet network management under Title I has been answered -- and correctly, in my view -- by the D.C. Circuit in its decision in the Comcast v. FCC case,” McDowell said in his speech. “I dissented from the Commission’s 2008 Comcast order because, for starters, I did not think that the FCC had the power to act as it did. In April, a unanimous panel of the D.C. Circuit thought likewise when it held that the commission failed to show what underlying statutory mandate provided the legal foundation needed to claim Title I ancillary authority to regulate the Internet."

McDowell said the court’s direction was clear. “The court reminded the Commission that ancillary authority has to be related to some mission explicitly authorized by Congress,” he said. “When it comes to regulating network management, however, Congress has passed no such law. After repeated and exhaustive reviews of the statute and the record, I still can’t find anything close to a congressional directive for the FCC to regulate information services as some have proposed over the years. … Those who may think that the Commission will escape another appellate rebuke merely by labeling a new Title I order as ‘interim’ should reevaluate their strategy.”

Before taking “a giant leap into a potentially dark and dangerous regulatory abyss,” the commission should “seriously consider an idea that I have suggested for several years now,” McDowell said. “The FCC could create a heightened role for itself. It could lead a coordinated effort with similarly inspired partners such as already established, nongovernmental, Internet governance groups, the Federal Trade Commission and other antitrust and consumer protection agencies, public interest and consumer groups, trade associations, academics, engineers, economists and others.”

"It was a wise person who first said, ‘If it ain’t broke, don’t fix it,'” Tauke said in his keynote. “The obvious corollary is: ‘If it is broke, fix it.’ Today we'll discuss what ‘ain’t broke’ and what is. The Internet ecosystem falls into the ‘ain’t broke’ category. It is working. It is a highly innovative sector that even in tough times pumped tens of billions in investment into the economy and created new jobs. It is changing the way we work, live and play."

Genachowski’s attempt to delay the Dec. 15 commission meeting by about a week, to either Dec. 21 or 22, has not been successful so far or been finalized, FCC officials said Monday. Not all commissioners’ offices may be willing to push the meeting date back, agency and industry officials said. But ultimately it’s Genachowski’s call as to when to hold the meeting, an FCC official said. The chairman met with some resistance in moving this month’s meeting to Nov. 30, but did so anyway, commission officials said.