The new political calculus on net neutrality
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The window of opportunity for negotiating a legislative compromise on reasonable net neutrality protections is 2017.

The 2015 assumptions supporting the old political calculus all collapsed with the election outcome.

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If supporters believe net neutrality is an enduring principle and protection worthy of being put into law, and not just politics, then a reasonable bipartisan compromise should be possible.

 

The old net neutrality political calculus that propelled President Obama’s majority on the Federal Communications Commission to gamble everything to impose the strongest possible, Title II utility, net neutrality regulations on broadband companies in its 2015 Open Internet Order was based upon three big political assumptions.

First, the D.C. Circuit Court of Appeals would defer to the FCC’s expertise and affirm its Open Internet Order.

Second, Obama’s veto power would protect it from a Republican-controlled Congress.

Third, the next president would be a Democrat who would retain a like-minded FCC majority, appoint future appellate judges, and veto any future Congressional threat to net neutrality.

In 2015, I characterized this FCC majority gamble like someone betting their mortgage at a horse racetrack on a trifecta bet where the bettor only wins by guessing exactly which horses come in first, second, and third.

I roughly calculated the odds of that political trifecta bet at 8-1 against the FCC by assuming each of its three political assumptions had a coin-flip 50% chance. Thus, an odds maker’s calculus would be .5 x .5 x .5 = .125 (12.5 percent) or 8-1 odds against the FCC winning its Title II net neutrality trifecta bet.  

As it turned out, the FCC majority and its predominant supporters, Public Knowledge, FreePress, Google, Facebook, Netflix, and Amazon, succeeded in securing complete deference from the Appeals Court, and in preventing any congressional action via veto threats from Obama, but failed in winning the election outcome they needed.

With the election outcome, all those political assumptions are moot. Now only one, the FCC, the Congress or the Supreme Court, is needed to overturn the FCC’s Open Internet order.

A critical point here that many are missing is that the old net neutrality political calculus was not about net neutrality itself. It was about the FCC asserting and gaining court deference so it could de facto legislate Internet policy over time via unbounded, sweeping, regulatory authority.  

Now a Republican majority, FCC, Administration, Congress, and Supreme Court, has zero interest in affording any U.S. regulator unbounded regulatory authority.

President Trump just signed a regulatory freeze and set a goal of reducing Federal regulation by 75 percent.

Congress has already passed, and is expected to pass more process changes that put significant bounds on federal regulators overall, including the FCC.

In the Senate, the Democrats’ potential filibuster strength is likely stronger now than in the next Congress, because in the 2018 mid-terms, Senate Democrats must defend 25 of 33 seats up for election, 10 of which are in states Trump won.

As for the courts, while the D.C. Circuit Court of Appeals en banc review is likely to re-uphold the FCC’s Open Internet order in another split decision, that decision will be appealed again to the Supreme Court.

Over the past two years, Supreme Court decisions involving Chevron Deference - the legal precedent that affords regulatory deference to agencies when statutes are ambiguous - have increased the limits on Chevron Deference and are expected to continue limiting regulatory deference, given the recent history of the Executive Branch’s wholesale bypassing of Congress’s Constitutional role.    

As for the FCC under Chairman Ajit Pai, the new Republican majority enjoys many more ideas and means to dismantle and overturn the FCC Open Internet order than are necessary to do so over time, via many available deregulatory authorities, processes, tools, conclusions, and management actions.  

In short, the election completely upended the old net neutrality political calculus.

The whole government system is now ultimately opposed to “the means” – unbounded, unchecked, Title II regulatory authority -- that enabled the FCC’s exceptional regulatory overreach.

However, it is not necessarily opposed to all “the ends” of net neutrality.   

Senate Commerce Chairman John ThuneJohn ThuneHopes fade for using tax reform on infrastructure United explains passenger removal to senators Ryan praises FCC chief's plans to roll back net neutrality MORE and House Energy Commerce Chairman Greg Walden appear very open to a reasonable, bipartisan legislative compromise on net neutrality.  

Net neutrality supporters would be wise to take the proverbial bird in hand of a legislative compromise now, rather than betting they can grasp for the two birds in the bush whenever they want.

Time will tell if enough Senate Democrats consider net neutrality a substantive policy worth preserving.   

Scott Cleland served as deputy U.S. coordinator for international communications and information policy in the George H. W. Bush administration. He is president of Precursor LLC, an internetization consultancy for Fortune 500 companies, and chairman of NetCompetition, a pro-competition e-forum supported by broadband interests.


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