Industry, Advocates Raise Issue With FCC's Forbearance Rules in Draft Net Neutrality Order

"Upon initial review of the draft order, changes would seem appropriate in certain respects," said NTCA CEO Shirley Bloomfield. Forbearance from universal service contribution obligations "would not only forbear but could effectively foreclose much-needed debate in the near term about how to preserve and advance universal service," Bloomfield said, and the record "does not support the conclusions reached in the draft order as to the impacts of such potential reforms."

"While we welcome the FCC reinstating its oversight over broadband, we are disappointed" that the draft order "chooses to foreclose through forbearance the critical question" of whether broadband internet access service should be part of the USF contribution base, said the Affordable Broadband Campaign's Gigi Sohn. "Deferring action on USF contributions modernization to some point in the future is a missed opportunity," said Derrick Owens, WTA senior vice president-government and industry affairs. The FCC should amend its draft to start a proceeding on USF's sustainability "instead of forbearing from assessing broadband for contributions to USF," Owens said.

The draft order would "saddle the competitive broadband marketplace with regulations that will reduce the long-term availability and quality of broadband," said Joe Kane, Information Technology and Innovation Foundation director-broadband and spectrum policy. It "claims to forbear from the most obviously harmful portions of Title II, but such forbearance is a matter of discretion only and places the broadband ecosystem under the threat of micromanagement," Kane said.

Congressional Progressive Caucus Chair Pramila Jayapal of Washington echoed other congressional Democrats in praising the net neutrality draft. It "fulfills long-standing progressive policy objectives, including in our CPC Executive Action Agenda," the House member said Thursday night. "Americans have a right to a free, open internet. They have a right to net neutrality. Those rights will finally be restored.” The FCC's rescission of its 2015 rules under then-Chairman Ajit Pai "left online consumers at the mercy of special and corporate interests and allowed wealthy corporations to consolidate power," Jayapal said: "In the years since, internet companies have rigged access to what has become a fundamental public utility with pay-to-play schemes."

State utility regulators “applaud the FCC for correctly recognizing that Act provides states with jurisdiction for oversight where it is needed and to take up questions about conflict with FCC oversight on a case-by-case basis,” NARUC Executive Director Greg White said in a statement. He noted that the association previously had a resolution endorsing basic net neutrality principles. NARUC Telecom Committee Chair Tim Schram, a Republican commissioner from Nebraska, said state commissions “will work to assist FCC with policies serving the best interests of the public."

The FCC would let California keep its law and enforce it, at least for now, under section G of the draft declaratory ruling. Proposing a case-by-case approach, the draft doesn’t specifically approve or reject laws or executive orders in several other states. However, the FCC would say that the internet isn’t exclusively interstate, as broadband providers operate in local markets and their operations have intrastate aspects. That’s despite a frequent telecom industry argument that states may not regulate the internet because it’s interstate.

Former FCC and California Commissioner Rachelle Chong raised concerns about the FCC “backing off its prior stance” that the internet is primarily interstate and “leaving room for some state net neutrality rules that” are “generally consistent with the federal rules.” On leaving to FCC discretion which state rules to preempt, said Chong, now in private law practice. “We have seen the FCC swing with political winds. I worry that we may end up with a patchwork quilt of state net neutrality rules that make provision of national and global Internet services difficult for providers.” Chong added that “even small nuances in state laws may prove problematic, which is why it is important the FCC retains its preemption authority and actually exercises it in some consistent fashion.”