Earlier today, in a speech at the Newseum, FCC Chairman Pai announced his proposal to undo the ill-advised reclassification of broadband as a telecommunications service under Title II. We fully support Chairman Pai's proposal because Title II is an outdated regulatory regime, harms investment and innovation, and is not at all necessary to guarantee consumers an Open Internet.
While some try to conflate the two issues, Title II and net neutrality are not the same. Title II is a source of authority to impose enforceable net neutrality rules. Title II is not net neutrality. Getting rid of Title II does not mean that we are repealing net neutrality protections for American consumers.
We want to be very clear: As Brian Roberts, our Chairman and CEO stated, and as Dave Watson, President and CEO of Comcast Cable writes in his blog post today, we have and will continue to support strong, legally enforceable net neutrality protections that ensure a free and Open Internet for our customers, with consumers able to access any and all the lawful content they want at any time. Our business practices ensure these protections for our customers and will continue to do so.
As early as 2005, when then FCC Chairman Michael Powell articulated four basic principles to ensure a free and open Internet, we supported net neutrality. Then, when the FCC started its first formal rulemaking process to put in place legally enforceable Open Internet (or net neutrality) rules back in 2010, Comcast was unequivocal in stating our support for enforceable net neutrality rules. When the FCC acted that year, we did not challenge those net neutrality rules; in fact, we were the only ISP to agree to be bound by those rules even if they were overturned by a court.
The FCC’s 2010 Order was eventually challenged by other parties and a court overturned them. The FCC set out once again in 2014 to create enforceable net neutrality rules – and we again supported the imposition of strong net neutrality rules. Unfortunately, the FCC relied on an antiquated source of authority dating to the Roosevelt Administration – Title II of the Communications Act of 1934. Common carrier regulations may have made sense in a monopoly public utility telephone era; they make no sense applied to the most dynamic and cutting edge technology of our generation.
Many predicted that relying on Title II would guarantee years more of legal wrangling. Many also said that a strictly partisan vote to reclassify broadband under Title II would only result in future regulatory uncertainty as Administrations changed. And in both cases, that is exactly where we are now. Title II has just created more legal and political uncertainty. Open Internet protections for consumers are too important to be the subject of a continuing game of regulatory ping pong.
We also opposed the classification of broadband under Title II because of our concern that the specter of legacy common carrier regulations being applied to broadband would impede investment and innovation. Unfortunately, as analysts and economists have concluded, that is precisely what has occurred.
Raymond James wrote in 2015 that "Washington fails to understand that network investment of, say $X billion per year that remains at or near that level going forward represents, essentially, a cut to investment. This is because absent these rules, new models could emerge that would save consumers and businesses money while providing the network returns required to justify further network expansion and investment and a better experience for all. The real investment number should be 10%-20% higher than the base of $X billion and grow from there, but we will never know and policy makers will falsely claim the carriers cried wolf. Since the level of investment began at $X and remained at $X, nothing was harmed they will say."
Last month in Forbes, Hal Singer, citing data from 2016, noted "Domestic broadband capital expenditure ("capex") declined sharply in 2016 relative to 2014, the last year before reclassification as a common carrier. Relative to 2014 levels, the twelve largest ISPs invested $3.6 billion less in domestic broadband in 2016, a 5.5 percent decline."
And just this week, George Ford in new analysis found that between 2011 and 2015, "the threat of reclassification reduced telecommunications investment by about 20% to 30%, or about $30 to $40 billion annually." Importantly, he also found that net neutrality principles without Title II reclassification had no meaningful effect on telecommunications investment. He stated "it is reclassification – and not the principles of Net Neutrality – that is reducing investment."
In our view, there is no better way to put in place an enduring set of enforceable Open Internet protections than for Congress to act. As telecommunications policy leaders in both the House and the Senate said today, "it’s now time for Republicans and Democrats, internet service providers, edge providers and the internet community as a whole to come together and work toward a legislative solution," – we wholeheartedly agree. Bipartisan legislation, as was envisioned back in 2010 by then Congressman Henry Waxman and Cliff Stearns, would solve both the authority issue and end the gamesmanship on the substance of net neutrality rules.
That is the path that Chairman Pai has put us on with his proposal today. He is proposing to eliminate Title II and is seeking comment on the best path forward for maintaining sensible Open Internet protections for consumers. He is taking no immediately effective action, but rather is proposing to move forward in a thoughtful manner to avoid consumer disruption.
We are at the very beginning of a new rulemaking proceeding. The existing FCC net neutrality rules remain in place and are enforceable by the FCC. But should the record in this proceeding support changes once completed, Chairman Pai has made clear that he remains committed to ensuring that consumers are protected.
Comcast will do the same. Consistent with our longstanding practices, Comcast will continue to give our broadband customers the net neutrality protections they have come to expect. Nothing less.
We applaud both Chairman Pai for launching this proceeding and Commissioner O’Rielly for his thoughtful support. It is time to put this net neutrality debate to rest. The existing FCC rules, the new rulemaking proceeding, and our ongoing commitment to abide by legally enforceable net neutrality protections provide a bridge to the time when Congress acts and finally resolves this issue through bipartisan legislation.
We all need to step back from the partisan rhetoric that has too often impeded rational discussion on net neutrality. There is widespread consensus on what strong net neutrality rules should look like. It’s time for all of us to work together to protect American consumers and to advance those important principles without a misguided Title II overhang. We are committed to getting there – and through every step of the process, we are committed to preserve net neutrality rules and to protect our customers.