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Ted Cruz introduces bill to strip FCC of net neutrality authorities

‟The FCC should not be dictating how Internet services will be provided to millions of Americans.”


Aaron Sankin


Posted on May 16, 2014   Updated on May 31, 2021, 7:28 am CDT

Sitting at the heart of the political debate surrounding net neutrality rests an apparent contradiction. On one hand, the people who have fought most intensely to prevent Internet service providers (ISPs) like Comcast and Verizon from having the ability to charge a fee to online content providers to access a ?fast lane” to consumers largely hail from the left side of the political spectrum. The charge against eliminating net neutrality has been led, at least thus far, by outspoken liberals like Senators Al Franken (D–Minn.) and Ron Wyden (D–Ore.).

Conservatives, on the other hand, seem far more likely to balk at government efforts to tell politically connected ISPs how they’re allowed to make money.

However, when the Federal Communication Commission (FCC) voted in favor of new rules that would effectively end net neutrality as we know it on Thursday morning, the vote fell on along party lines—with Democrats voting in favor and Republicans in opposition.

Why the Democrats on the Commission gave the new rules their approval is up for debate. Cynics would argue its related to the fact that 80 percent of FCC commissioners since 1980 have taken high-paying jobs in the telecom industry after leaving government service. The commissioners themselves would likely posit that the plan’s restrictions on ISPs slowing down Internet traffic that doesn’t pay a toll (rather than speeding up traffic that does) is enough to keep the spirit of net neutrality in place.

For conservatives, it’s a different story. The question isn’t even really about privileging one form of Web traffic over another—it’s that they believe the FCC shouldn’t have the authority to regulate the Internet at all. Their votes against the new rules were less for or against net neutrality than they were votes against the entire conception that the FCC should be able to vote on net neutrality in the first place.

Stripping the FCC of it power over the Internet is the intent of a bill proposed earlier this week by lightning rod, Tea Party-affiliated Sen. Ted Cruz (R–Tex.).

Section 706 of the Telecommunications Act gives the FCC jurisdiction over “telecommunications services” to achieve a whole host of regulatory goals, like promoting competition and removing barriers to infrastructure investment. Without reclassifying ISPs as so-called Title II common carriers, which would essentially mandate net neutrality as an automatic requirement, Section 706 is what gives the FCC the ability to impose any rules on ISPs whatsoever.

If passed, Cruz’s bill would strip the FCC of its Section 706 authority, leaving the agency unable to enforce the plan approved by the Commission’s Democrats that aims to prevent ISPs from slowing down traffic by non-toll paying content providers to levels below what they promised to consumers.

“The FCC’s latest adventure in ‘net neutrality’ would stifle innovation and subject the Internet to nanny-state regulation from Washington,” Cruz said in a statement. ?Internet freedom has produced robust free speech for billions and a wide-open incubator for entrepreneurs to generate jobs and expand opportunity. A five-member panel at the FCC should not be dictating how Internet services will be provided to millions of Americans.”

Cruz’s argument is that the Internet economy has flourished in the United States in recent decades simply because it has remained largely free from cumbersome government regulation. He charged that any regulatory changes to the way the government treats ISPs should come from the slower-moving, more deliberate legislative process.

?Congress, not an unelected commission, should take the lead on modernizing our telecommunications laws.” Cruz continued. ?The FCC should not endanger future investments by stifling growth in the online sector, which remains a much-needed bright spot in our struggling economy.”

Considering the current Congress is the least productive in history, passing a mere 23 laws during its second session as of last month with no end to the gridlock in sight, making ISPs the exclusive purview of the legislative branch likely means no new regulations at all.

In the eyes of conservatives, this is probably a good thing. The current system, many argue, is working fine.

Roslyn Layton, a fellow at the American Enterprise Institute focusing on telecom policy, asserts that regulations like net neutrality are only necessary when markets are prone to experiencing failure. Since the market for broadband isn’t fundamentally flawed, Layton says, imposing limits like net neutrality would hamper the ability of ISPs to provide the best service.

If we look at strict net neutrality (not allowing payments for improved performance and delivery), it is a reverse cartel. It says that content/applications providers are not allowed to pay for improved performance, even if they need it for their application to work and even if consumer welfare would be improved. The vast majority of internet application will be satisfied by best efforts service (indeed many applications for the Internet of Things need even less than best efforts), but for certain applications which are sensitive to latency (e.g. VOIP and video), they need a little help. If these strict net neutrality rules are put in place, it will likely deter the development of applications and content that require improved performance/prioritization/delivery.

The counter argument to this—the one put forward by advocates of an open Internet—is that scrapping net neutrality rules is precisely the move that would hamper innovation.

In a recent interview with Time, Sen. Franken noted that growing levels of consolidation have created a handful of powerful tech companies that could easily afford to pay whatever tolls ISPs throw at them—Google, for example, currently has over $57 billion of cash on hand. Smaller, upstart firms hoping to take on the big guys in the same space would have difficulty breaking into the market because they couldn’t afford the same fees.

Google could handle having to pay Comcast to ensure that YouTube videos load instantly, for instance. But for a less well-funded competitor—even one that offered a superior product—Comcast’s fees might be a deal-breaker.

So, how important is speedy delivery on the Internet? Well, the New York Times reported in 2012 that even a 250 millisecond delay in loading a website is enough for users to start abandoning it in droves.

Additionally, since the cable industry is one prone to creating natural monopolies, customers faced with declining speeds on certain sites often don’t have the ability to easily switch to a competitor that would otherwise offer a comparable level of service.

“The idea of net neutrality is not to have the government ‘regulate the internet,’” Franken said. “It’s to keep the internet open, so that we still have the innovation and investment we’ve had in the past.”

That both sides’ arguments revolve around promoting online innovation shows just how much every politician in America wants to be able to claim credit for allowing the next Google to sprout in his or her backyard. The best way to get there is, as always, subject to debate—and that debate is sure to go on indefinitely.

This legislation isn’t the first time that Cruz has protested the breadth of the FCC’s regulatory authority.

Last year, he single-handedly stalled the Senate’s confirmation of Tom Wheeler as the Commission’s chairman. Cruz’s put a hold on Wheeler’s confirmation vote because he didn’t want the FCC to have the ability to enforce the DISCLOSE Act, a bill that, if passed, would have required organizations that put out political ads to publicly identity their larger donors. Cruz eventually lifted his hold after meeting with Wheeler and learning that enforcing theoretical campaign finance laws was ?not a priority” for the cable industry’s former chief lobbyist.

H/T Washington Examiner | Photo by Gage Skidmore/Flickr (CC BY-SA 2.0)

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*First Published: May 16, 2014, 8:44 am CDT