Letter to FCC Chairman Wheeler & Legislators on Net Neutrality

The Honorable Thomas Wheeler
Chairman, Federal Communications Commission
445 12th Street, S.W.
Washington, D.C. 20554

The Honorable Fred Upton
Chairman, Committee on Energy and Commerce
2183 Rayburn House Office Building
Washington, D.C. 20515

The Honorable Jay Rockefeller
Chairman, Committee on
Commerce, Science, & Transportation
531 Hart Senate Office Building
Washington, DC 20510

The Honorable John Thune
Ranking Member, Committee on
Commerce, Science, & Transportation
511 Dirksen Senate Office Building
Washington, DC 20510

May 15, 2014

Dear Messrs:

The discussion on Net Neutrality has moved away from what consumers actually want and
need almost entirely into the political realm. What we need in our Internet infrastructure is
not necessarily what some call a fast lane or a slow lane, but an efficient allocation of
resources, so that all applications appear seamlessly to the end user. Absent convincing
evidence of a market failure or demonstrable consumer harm, network management should
remain a free-market contract negotiation of sorts, and not end up looking like government
controlled phone service infrastructure or of broadcast/cable content regulation.

For the past decade, activists with a political agenda have pushed the increasingly outlandish
conspiracy theory that in the absence of immediate and pervasive federal regulation
broadband Internet will be destroyed by the companies supplying it. Unfortunately, the
FCC appears to be bending to such pressure to rush through yet another iteration of
complex, unnecessary and legally questionable net neutrality rule making. We therefore
respectfully call on Congress to assert its authority concerning the FCC’s role, and
ask the FCC to await further action from Congress.

In Verizon the D.C. Circuit Court interpreted Section 706 of the 1996 Communications Act
so as to give the agency authority to adopt new net neutrality rules, as long as these rules do
not impose common carrier obligations on ISPs. The court’s ruling may even provide the
FCC with new powers to regulate Internet services beyond broadband infrastructure, such
as “edge providers.” The only real limit is that the FCC can’t overtly treat Internet services
as common carriers. But this limit may mean little.

Importantly, section 706 was not intended by Congress to constitute an independent grant
of affirmative regulatory authority. This was the Commission’s own understanding of
Section 706 as well until the agency switched its view after its first foray into net neutrality
regulation met with defeat in Comcast Corp. v. FCC.

Additionally, the court merely held the no-blocking and no-discrimination net neutrality
rules unlawful; the court did not purport to define the boundaries of the Commission’s
Section 706 authority or adjudicate any particular exercises of such authority. The court did
not require the agency to adopt any new regulations. Under all the circumstances – and
especially the circumstance that there is no evidence of a present market failure or consumer
harm resulting from Internet provider practices – there is no reason for the Commission to
move forward at this time to adopt new net neutrality or net neutrality-like rules.

While some call for the FCC to use the “nuclear option” of Title II, we again urge Congress
to clarify its intent with regards to the FCC’s regulatory authority and for the FCC to wait
for that direction from Congress.

The primary problem with Title II regulation of the competitive broadband industry is that it
would abruptly decelerate the speed of Internet innovation to the speed of government – a
regulatory regime that is as slow as the slowest part of the FCC’s filing and public comment

Title II of the Communications Act is meant to deal with government-granted, governmentregulated
monopolies. The old bargain for what were once thought to be “natural
monopolies” was that in order to encourage large, capital-intensive investments in utilities
such as water, electric, or old-fashioned telephone infrastructure, government would grant a
monopoly to a single provider who agreed to build very expensive infrastructure. Once
built, these government-protected, government-regulated monopolies would be granted a
guaranteed “rate of return” on their investments, but be forbidden from charging their
customers monopoly prices.

The FCC definitively moved the Internet away from Title II regulations in 1998, when
Clinton-appointed FCC Chairman William Kennard rejected the same Title II arguments
being made today in that year’s report to Congress:

“Classifying Internet access services as telecommunications services could have
significant consequences for the global development of the Internet. We recognize the
unique qualities of the Internet, and do not presume that legacy regulatory
frameworks are appropriately applied to it.”

While the expansion of 706 authority would likely affect edge providers, Title II
reclassification would likely apply to all aspects of transmission via Internet. Any business
providing over-the-top services, including search, voice, video and email, would likely come
under Title II regulation – a dramatic expansion of restrictive regulation. We do not
believe the FCC’s “forbearance” authority would be efficient for determining the
applicability of provisions of Title II to all of these services. This uncertainty would embroil
the industry and the FCC in a slew of legal battles, and volatile market uncertainty that
would dramatically harm infrastructure investment and capital expenditures.

In consideration of the vibrant Internet market of both service providers and over-the-top
services, we submit that no market failure or real harm to consumers has been adequately
demonstrated to support any expansion of FCC authority over the Internet. We urge
Congress to act expeditiously in expressing its understanding of the proper role of
the FCC in regard to regulating the Internet, and urge the FCC to wait
for Congressional direction.


Americans for Tax Reform
American Commitment
American Conservative Union
Americans for Prosperity
Competitive Enterprise Institute
Center for Individual Freedom
Digital Liberty
Institute for Liberty
Institute for Policy Innovation
Less Government
National Taxpayers Union
Taxpayers Protection Alliance


You can download the letter here: NN coalition 0515