House Subcommittee Votes To Nullify Open Internet Order

WASHINGTON, March 9, 2011 – The Communications and Technology Subcommittee voted Wednesday in a 15-8 party-line vote to disapprove the new Federal Communications Committee net neutrality regulations.

Chairman Rep. Greg Walden (R-OR) presided over hearing Wednesday morning, which debated the open Internet regulations set by the FCC.  This was the committee’s second hearing on the topic after a four-hour session last month in which legislators put the five FCC Commissioners in the hot seat.

The legislation will now go back to the full Energy and Commerce Committee for consideration.

Representatives and witness, both for and against disapproval, argued that their way of regulating the Internet, whether heavy handed or free of authority, would lead to more innovation and jobs. Those in favor of the disapproval also questioned the statutory authority under the Telecommunications Act of the FCC to implement these regulations.

The vote to disapprove the FCC’s rules was held directly after the hearing. Subcommittee Chair Walden agreed to postpone the vote after Democrats insisted that issued a public request that an additional hearing take place to shed further light on the regulations set by the FCC.

Witnesses at the hearing included Tom DeReggi, President of RapidDSL & Wireless, Dr. Shane Greenstein, the Elinor and Wendell Hobbs Professor at Northwestern University, Dr. Anna-Maria Kovacs, an independent consultant and investment analyst, Mr. James Cicconi, Senior Executive Vice President for External and Legislative Affairs for AT&T, Robin Chase, founder and CEO of GoLoco and founder and former CEO of Zipcar, and S. Derek Turner, Research Director for Free Press. Chase flew in for the afternoon from Paris in order to give her testimony.

Together the witnesses represented Internet consumers, small business owners, Internet providers, as well as experts on the economics of Internet technology.  Most witnesses were in favor of maintaining the FCC’s regulations, with AT&T remaining largely neutral towards the FCC despite their desire for fewer regulations.

“Nearly everyone agrees that public policy ought to prevent gatekeepers from using market power to erect artificial barriers to speech and commerce,” stated Turner.

Turner also stated that consumers and small business owners alike were in favor of the FCC’s role as Internet watchdog, with some complaining that regulations did not go far enough. Free Press initially opposed the FCC’s order, arguing that it did not adequately preserve the Internet.

“While aspects of the rule may be flawed,” stated Turner, “Any attempt to repeal it leaves Internet users fundamentally unprotected.”

“I can confidently say that eliminating the FCC’s Network Neutrality rules will put future entrepreneurs and small businesses at a significant disadvantage, “ testified Chase. “If Congress decides to disable the FCC’s ability to enact policies that protect an open Internet, the Internet will become captured by the broadband Internet companies that provide access.”

Dr. Greenstein concluded his testimony in favor of FCC regulations, stating that history has “led us to favorable outlook for policies that tend towards continuity, namely, continued regulatory presence with occasional and consistent action.”

On the opposing side, Energy and Commerce Committee Chair, Rep. Fred Upton (R-MI), openly supported the resolution to nullify the FCC regulation.

“There is no crisis warranting intervention,” stated Upton in his opening statement. “The Internet is open and thriving precisely because we have refrained from regulating it.”

Rep. Anna Eshoo (D-CA), the Subcommittee’s ranking member, contradicted Upton’s assertion, however, and concluded the proceedings by citing incidences where broadband providers blocked service for companies that provided competing services, such as the 2007 lawsuit accusing Comcast of infringing regulations by blocking users from certain file sharing systems.

In her opening statement, Eshoo reiterated the view she claimed is held by most consumers and providers: that the FCC’s light regulations have not been found to be a menace to business.