How Republicans Might Accidentally Make Net Neutrality Stronger

The party is holding the line on new Internet regulations, but that's costing them their seat at the negotiating table.

Net-neutrality rules represent a government takeover of the Internet that stifles growth and smacks of censorship. That's the Republican party line, and they're not budging from it.

But that vehement opposition could actually drive the Federal Communications Commission to enact tougher net-neutrality rules. The stance has left Republicans on the outside looking in as FCC Chairman Tom Wheeler crafts the next generation of open-Internet policies.

Wheeler needs two votes from the four other FCC commissioners to enact new regulations, and thus far he hasn't shown any interest in negotiating with the Republicans on net neutrality because he's unlikely to win their support for any plan.

If the two Republican commissioners won't back any of his proposals, Wheeler will have to rely on the votes of both Democrats to get anything passed. That dynamic gives the two Democratic commissioners—Mignon Clyburn and Jessica Rosenworcel—the leverage to demand changes to make the regulations more stringent.

That's bad news for Internet service providers.

Major firms such as Comcast and AT&T have resigned themselves to the FCC going forward with some new version of net-neutrality regulations—they just don't want the agency to go beyond what they can live with. But if the negotiations are limited to the panel's three Democrats, broadband providers lack anyone at the table they can count on to pull the regulations to the right.

One industry official said companies are frustrated that the Republicans have taken themselves out of the discussions when it's clear there will be new rules.

"It would probably be helpful for the cable and phone companies if the Republicans were actively involved in shaping the rules," said Paul Gallant, a telecom policy analyst for Guggenheim Partners. "It's a different conversation when you have both sides at the table."

The two Republican FCC commissioners—Ajit Pai and Michael O'Rielly—argue that they're not intentionally boycotting the net-neutrality discussions. Rather, Pai has accused Wheeler of freezing them out of the debate. Whatever the reason, the FCC chairman is moving ahead with new rules, and it doesn't look like Republicans will be part of the discussion.

The FCC first enacted net-neutrality regulations in 2010 (over Republican opposition). Those regulations barred broadband providers from blocking or "unreasonably" discriminating against any Internet traffic. The goal was to prevent giant corporations from distorting the Internet to favor themselves at the expense of users. But a federal court struck down those regulations earlier this year, and Wheeler is now trying to come up with new rules that can survive future legal challenges.

His initial proposal sparked a massive liberal backlash because it would have allowed broadband providers to charge websites for faster service in some cases. He's now under intense public pressure to toughen up the rules.

In meetings with FCC officials and in formal written comments, the major Internet providers are focused on trying to persuade the agency not to go too far.

In particular, they're worried the FCC might invoke its sweeping authority under Title II of the Communications Act to regulate Internet service. Liberals argue that the provision, which the agency currently uses to regulate phone companies, provides the only way to enact net-neutrality rules that can hold up in court. But the Internet providers fear they'll be turned into public utilities, with federal regulators controlling what prices they can charge and which customers they have to serve.

The providers are desperate to help Wheeler find an escape hatch to appease the public outrage over net neutrality without resorting to Title II.

AT&T has suggested the FCC could ban any paid prioritization of Internet traffic that isn't requested by the customer. Comcast said it would accept an FCC "presumption" against all Internet "fast lane" deals.

That puts the companies in a much more moderate position than Republicans at the FCC or on Capitol Hill.

"Net-neutrality rules would radically change the hands-off approach that has allowed the Internet to work so well thus far," Sen. Chuck Grassley, the top Republican on the Senate Judiciary Committee, said during a hearing last week. In the same hearing, Sen. Orrin Hatch, a Utah Republican, said he "could not disagree more" with people who want the FCC to take "control of the Internet."

Virtually every congressional Republican voted to repeal the FCC's old net-neutrality rules in 2011. The hard-line position of the GOP lawmakers only reinforces the stance of their fellow Republicans at the FCC.

A spokesman for Pai said that ahead of the initial vote on net neutrality in May, Wheeler's staff didn't return phone calls from the Republican office and shared a new draft of the proposal only with the Democratic commissioners.

"So it has been obvious for many months that the chairman's office has no real interest in working with Republicans on this issue," the spokesman said.

At a press conference following the vote on the initial proposal, Wheeler said he shared a first draft with the two Republicans but that they immediately said they were opposed.

"When you go to put something together and somebody says, 'Excuse me, I don't want to participate with you on that,' it sends a message," Wheeler said. "We're trying to move ahead."