In his demand to the FCC that it reclassify broadband Internet access service as a Title II telecommunications service to ensure net neutrality, the same week that Republicans won control of the Senate, President Obama may have inadvertently provided the ultimate incentive for Republicans to pursue a rewrite of the 1996 Telecommunications Act.

While we personally abhor the way telecommunications decisions have increasingly been political rather than based on sound economic principles, there is no escaping the fact that politics will shape upcoming decisions on Internet regulation, the transition to an Internet-based telecommunications network and the future shape of the Connect America Fund. With a Democratic president ensuring FCC control (three commissioners to two) over the next two years; the Commission is free to proscribe telecommunications regulations that are likely to infuriate Republicans, who increasingly see a rewrite of the Telecommunications Act as a permanent solution to heavy-handed FCC regulation, especially now that they will run both the House of Representatives (House) and Senate.   

Although it has received almost no publicity, the Republicans have a head start. The Communications and Technology Sub-Committee of the Energy and Commerce Committee of the House have been reviewing the current Telecommunications Act of 1996 since 2013, with the ultimate goal of a rewrite to modernize the Act for the 21^st Century. So far in 2014, the Sub-Committee has issued five white papers laying out key issues and seeking industry input:

White Paper 1 – Modernizing the Communications Act – The Act consists of seven titles: general provisions, common carriers, provisions related to radio, procedural and administrative provisions, penal provisions and forfeitures, cable communications, and miscellaneous provisions. Each of the titles governs a specific sector of the communications economy with inconsistent approaches to definition and regulation. By dividing the overall regulatory scheme into separate titles based on specific network technologies and services, the law does not contemplate the convergence of technologies in the modern digital era. As a result, there are different regulatory obligations based on the mode of technology, even though many of the technologies are functionally equivalent either technologically or from the consumer perspective. The Sub-Committee asks if this approach is still relevant for the 21^st Century. It asks the industry if separate classifications for telecommunications and information services are still appropriate, and asks the industry to recommend specific changes to the Act.

White Paper 2 – Modernizing Spectrum Policy - The FCC is responsible for licensing spectrum for a number of services, including public safety, fixed and mobile wireless, broadcast television and radio, and satellite. Although many of the processes are the same among these services, the licensing authority is housed in disparate bureaus. What structural changes, if any, should be made to the FCC to promote efficiency and predictability in spectrum licensing?

White Paper 3 – Competition Policy and the Role of the FCC - What are the competitive implications of the continued dynamic evolution of technologies, the intermodal competition it facilitates, and the changing patterns of consumer consumption of communications products and services? Specifically, how should Congress define competition in the modern communications marketplace? How can it ensure that this definition is flexible enough to accommodate this rapidly changing industry?

White Paper 4 – Network Interconnection – Key for the 21^st Century is who is responsible for ensuring smooth, end-to-end delivery of traffic? How can the FCC build a legal and regulatory framework to ensure quality of service and networks?

White Paper 5 – Universal Service Policy and Role of the FCC – The Sub-Committee asks the following questions: How should Congress define the goals of the Universal Service Fund?  How should it address the existence of multiple privately funded networks in many parts of the country that currently receive support? What is the appropriate role of states and state commissions with respect to universal service policy? How can it ensure that the Universal Service Fund is sufficiently funded to meet its stated goals without growing the fund beyond fiscally responsible levels of spending?

A re-write of the Telecommunications Act will take years. In the interim, the Republicans are likely to counter any attempt to regulate the Internet by reclassification with attempts to cut-off FCC funding.  While this is a delaying action, they are well aware that as long as a Democrat is president, they are subject to his or her veto. It makes sense; therefore, for a lot of the preliminary work to be done now and the next Republican president will have a great opportunity to rewrite the Telecommunications Act.

By Andrew Regitsky, CCMI

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