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FCC Democrats Set to Move on Net Neutrality, Broadband Subsidies

Jan. 7, 2021, 10:01 AM

A Democratic Federal Communications Commission is poised to restore net neutrality rules and move aggressively to expand broadband subsidies amid the pandemic, after Georgia’s runoff election gave Democrats control of the U.S. Senate.

The election results end fears that Senate Republicans would leave the five-member commission evenly split after GOP chairman Ajit Pai departs Jan. 20—and empower Democrats to embark on an ambitious communications policy agenda.

Restoring rules that banned internet service providers including AT&T Inc. and Comcast Corp. from blocking, throttling, or prioritizing certain internet traffic will be high among the Democrats’ goals, agency watchers said.

“The Federal Communications Commission will dodge the risk of major delays in Democrats’ priorities, like restoring regulation of high-speed internet service,” Bloomberg Intelligence analyst Matthew Schettenhelm wrote in a note early Wednesday about the outlook for the agency if Democrats took Senate control.

The commission will likely first move to reclassify broadband as a service under Title II of the Communications Act. That will allow it to restore rules requiring ISPs to treat all internet traffic equally, and take other actions to regulate broadband providers’ business practices amid the Covid-19 pandemic.

Broadband providers could challenge the reclassification in court, as they did in 2015 after the Obama-era FCC enacted rules. The agency would likely prevail, given that the U.S. Court of Appeals for the D.C. Circuit has deferred to it on how to classify broadband.

Democratic Commissioner Jessica Rosenworcel is seen as a lead contender for the chairmanship, unless Biden decides to tap someone outside the agency, Ari Fitzgerald, a partner at Hogan Lovells and former FCC official, said.

Covid-19 Response

Democrats are also likely to expand broadband aid, including through the E-Rate program, which pays for high-speed internet connections to schools and libraries.

The agency will likely move quickly to allow E-Rate funding to be used to subsidize Wi-Fi hotspots, laptops, and other connected devices to assist with remote learning.

“Whoever the chair is will be looking for ways to deploy all the resources available to help the administration get us through the pandemic,” Fitzgerald said.

Pai has refused to take that step, arguing that the FCC is restricted from funding in-home connectivity because the law explicitly says E-Rate should support internet services for classrooms.

Gigi Sohn, an adviser to former Democratic agency chairman Tom Wheeler, said the agency, along with congressional Democrats, will prioritize ensuring that underserved and unserved communities have access to broadband.

“I think we have an opportunity to move forward faster and close the digital divide in the next four years,” Sohn said. “I think that is doable.”

Fitzgerald said a Democratic chair would also likely use the “bully pulpit” to pressure broadband providers not to cut off service to subscribers who have difficulty paying their bills during the pandemic.

Another Democratic priority will be setting up a $3.2 billion program, established in the stimulus package, to provide monthly discounts of up to $50 dollars on low-income households’ monthly internet bills.

“We need to find ways to get 100% of us connected in this country and this program is an essential part of making that happen,” Rosenworcel said in a recent statement.

Democrats are also expected to take steps to increase broadcast industry diversity, a priority for Democratic FCC Commissioner Geoffrey Starks, Fitzgerald said. That may include undoing a rule that has allowed broadcast owners to buy up more TV stations across the country without running over national media ownership limits.

Senate Action

The Senate is likely to move fast to confirm a third Democratic commissioner, Sohn said.

“That’s the number one thing a Democratically controlled Senate can and will do,” Sohn said. “It will no longer be 2-2, which means they can get a lot done.”

To contact the reporters on this story: Jon Reid in Washington at jreid@bloombergindustry.com; Rebecca Kern in Washington at rkern@bloombergindustry.com

To contact the editors responsible for this story: Keith Perine at kperine@bloombergindustry.com; Melissa B. Robinson at mrobinson@bloombergindustry.com

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