Lawmakers Pass Bill Prohibiting FCC Pricing Power Grab

Published June 8, 2016

The U.S. Senate is considering a bill to prevent federal bureaucrats from using expanded internet regulation to set prices for internet access.

In April, the U.S. House of Representatives passed a companion bill, House Resolution 2666, the No Rate Regulation of Broadband Internet Access Act, sponsored by Rep. Adam Kinzinger (R-IL).

The Senate version of H.R. 2666 has been placed on the calendar, but no hearings have been scheduled.

Commissioners of the Federal Communications Commission (FCC) voted in February 2015 to regulate internet service providers (ISPs) as utility companies, citing authority under Title II of the Communications Act of 1934, an interpretation widely disputed and the subject of about a dozen lawsuits challenging FCC’s authority.

H.R. 2666, if passed by the U.S. Senate and signed into law, would explicitly prevent FCC from using this expanded Communications Act of 1934 authority to enforce net neutrality restrictions to directly set prices for internet access.

Reluctant Rate Regulators?

Tom Struble, policy counsel at TechFreedom, a nonpartisan public policy think tank focusing on technological issues, says FCC claims it is uninterested in using its regulatory power to set rates, even though it is fighting for the right to do just that.

“The FCC has said it does want the authority to regulate rates but doesn’t intend to use it,” Struble said. “They do want to be the cop on the beat so that—in case something does go wrong—they can step in. The bill would take away the FCC’s authority to regulate rates, after [the prices have] been established.”

Struble says preventing FCC from directly setting prices is a good deal for consumers.

“In terms of policy, I think this is good, because we really do not want the FCC to regulate rates,” Struble said. “If they did, that would discourage investment in building new networks—if there’s a ceiling for how much you’re allowed to charge.”

‘Fuzzy’ Regulatory Boundaries

James Gattuso, a senior research fellow for the Roe Institute of Economic Policy Studies at The Heritage Foundation, says the bill helps demonstrate just how much power FCC has amassed for itself.

“A bill like this helps show how fuzzy the boundaries of the FCC’s rules are. There’s no way to separate out rate regulation from those rules,” Gattuso said.

Gattuso says he would like to see a similar law explicitly preventing FCC from implementing its net neutrality rules.

“I don’t think it is the FCC’s job to regulate the internet at all, so if [a bill] did block their net neutrality efforts, that would be a good thing,” Gattuso said.

Kate Patrick ([email protected]) writes from Clarksville, Ohio.

Internet Info:

Gary S. Becker, et al., “Net Neutrality and Consumer Welfare,” Journal of Competition Law & Economics, September 1, 2010: