U.S. lawmakers, FCC remain divided on net neutrality's consumer protections, investment issues

FCC 2017

Net neutrality’s future is hanging in the balance as Democrats and Republican lawmakers and regulators remain engaged in a partisan war over consumer protections and carrier's hindered investment claims.  

Net neutrality was one of several topics a group of U.S. senators discussed with the FCC during the “Oversight of the Federal Communications Commission” hearing on Wednesday. This hearing was led by U.S. Sen. John Thune (R-S.D.), chairman of the Senate Committee on Commerce, Science, and Transportation. Joining Thune was Bill Nelson (D-Fla.), a ranking minority committee member.

RELATED: FCC’s Wheeler says retaining net neutrality rules maintains a forward path

Senator Ed Markey (D-Mass.), a staunch net neutrality supporter, said during the hearing that fears that net neutrality rules are inhibiting service provider investments are nothing more than a myth.

He cited how carriers collectively made large investments in network infrastructure between 2015 and 2016.  

“The Census Bureau reported that the U.S. broadband and telecommunications industry spent over $87 billion in capital expenditures in 2015,” Markey said. “Meanwhile, last year almost half all venture capital funds went to invested in this country went toward internet-specific and software companies.”

Markey said that since investments in networks are taking place, there’s no need to revamp the rules.

“We have hit the sweet spot,” Markey said. “You want the innovation and also want the deployment of broadband so there’s no problem that needs fixing.”

FCC Commissioner Mignon Clyburn agreed that she has not seen service providers dial back their network investments.  

“All of the reputable figures I have seen say that investment is occurring,” Clyburn said. “According to SEC filings where you are to identify if there are any issues when it comes to a process or action there’s no identification of the open internet being a negative when it comes to investment opportunities.”  

Markey has a big battle on his hands. His comments about net neutrality come at a time when the Republican Party has gained majority control of the FCC, the White House and Congress.

FCC Chairman Ajit Pai has made it clear that a key focus of his leadership of the regulatory will be to either realign or get ride of the current net neutrality rules .

Interestingly, the hearing comes only a day after President Donald Trump nominated Pai for a second five-year term.

The net-neutrality rules, which were passed during the Wheeler era of the FCC, are designed to have service providers treat all internet traffic equally.

Republicans cite investment concerns

Republicans, which now lead the FCC and Congress, continue to cite their desire to overturn the net neutrality order.  

Senator Ted Cruz (R-TX) said the current net neutrality rules are a detriment to economic growth and job creation -- two issues he says are his top priorities.

Cruz calls “the so-called net neutrality rules Obama Care for the internet.”

“In my view, the biggest regulatory threat to economic growth on the internet is the FCC’s open internet order,” Cruz said. “I believe regulating the internet as a Title II public utility is contrary to the text of the law and was an illegal power grab.”

He cited a recent 2016 Capex report written by Hal Singer. Singer’s report revealed that 8 out of 12 domestic providers that participated in the survey reported a decline in capex since 2014, a year before the net neutrality order was passed.

Pai said in response that while a supporter of an open internet, he cited that a number of smaller wireless ISPs that were afraid to make new investments.

“I favor a free and open internet as it has been developed in part to light touch regulation that began in the Clinton administration and continued thereafter for two decades,” Pai said. “To the extent that net neutrality that it is harming investment by broadband providers, it is not just the big ones, but also the small ones.”

Groups align support

Support to uphold the FCC’s current net neutrality order is gaining momentum.

The hearing follows a move by 170 consumer groups calling on the FCC to uphold and support net neutrality rules.

Over 170 groups said in a letter sent on Tuesday to FCC chairman Ajit Pai, as well as senators John Thune and Bill Nelson, asked Congress and the FCC to continue to support and protect the net neutrality rules put into place in 2015.

“[We] urge you and your colleagues to oppose legislation and regulatory actions that would threaten net neutrality and roll back the important protections put in place by the FCC in 2015 and to continue to enforce the Open Internet Order as it stands,” the groups write.

Markey asked the Senate Committee to “enter the letter into the record.”

Some of the organizations that signed the letter include American Civil Liberties Union, the American Library Association, the Electronic Frontier Foundation, Greenpeace USA, and the Writers Guild of America.