USF Senate Hearing Goes Down Title II Track

Title II reclassification took over the early part of a June 24 Senate Commerce Committee hearing on migrating the Universal Service Fund to broadband.

Subbing as chair of the hearing in the place of Committee chairman Jay Rockefeller (D-W. Va.) was longtime network neutrality advocate Byron Dorgan (D-N.D.), who was opposed to the FCC's decision back in 1992 to classify cable-modem service under Title I.

In his opening statement, Dorgan said that the broadband plan was "dangerously undermined" by the Comcast/BitTorrent decision and said the FCC should reclassify broadband transmissions under Title II, FCC chairman Julius Genachowski's so-called "third way" approach to clarifying the commission's broadband oversight.

Ranking member John Ensign (R-Nev.) said that classifying broadband under Title II would work against the goal of universal deployment by discouraging investment. He says the areas that will suffer are not Los Angeles or New York, but the rural and high-cost areas that the Universal Service Fund is trying to reach.

Ensign called it ironic that chairman Genachowski was saying that he needed to reclassify in order to support universal service when that reclassification could threaten the investment that would be needed to reach that goal. Dramatically increasing regulations on providers is not the best way to get them to build networks in rural and high-cost areas he said.

Dorgan countered that he supposed there were people who grumbled about the government's rural electrification program, but that it lit up family farms across the country and boosted productivity.

Democratic commissioners Michael Copps and Mignon Clyburn defended the chairman's third way after several Republican senators suggested that the FCC should wait for Congress to provide it more direction. Republican commissioner Meredith Attwell Baker said it would be better to let Congress settle the matter.

Senator Mike Johanns (R-Neb.) spent several minutes arguing that it was Congress' call. "We are the ones that paid the filing fee and ran for office," he said. He called it a simple solution to ask Congress to help "sort out" the broadband authority issue, rather than shoe-horn broadband into the 1930-style regulation of Title II.

Mark Begich, the Democrat from Alaska, countered that he wished it were "simple" to get things done in the Congress, pointing out that they could not even pass unemployment benefits (a number of benefits extensions were held up for months by Republicans concerned about how they were going to be paid for). He advised the commissioners to proceed on the Title II path, then tried unsuccessfully to turn the hearing to more parochial USF issues.

Clyburn took issue with the 1930s-style characterization, which has become a buzz-criticism of applying portions of Title II common carrier regs. She pointed out that most of Title II would not be applied, and that wireless had boomed under a hybrid regulatory structure involving some Title II regs.

Copps said that he thought the 1996 Telecommunications Act had given the commission the flexibility to adjust its telecom regulation to evolving technologies, and "conferred sufficient flexibility to do our jobs." He said that all he could do was implement the law as he sees it. "And I see it giving us that authority."

But while he said he thought Title II reclassification was anchoring the FCC's broadband authority to its strongest argument, Copps also said he "would welcome" any elaboration from Congress.

Ensign (R-Nev.) and Sen. John Thune (R-SD) both asked the commissioners whether they thought the FCC could reform USF without reclassifying under Title II. Baker said she thought there was enough authority under Title I for USF reform (though not for the FCC's proposed expansion and codification of network neutrality rules).

Copps called it a "questionable proposition," and said it could suffer a death of a thousand cuts from lawsuit after lawsuit. Clyburn could not say it would be impossible to migrate the fund under Title I authority, but noted the BitTorrent decision had made it more difficult, and that the FCC's legal minds had said they didn't think it would be legally sustainable.

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.