Spending bill avoids net neutrality, extends Internet tax ban

A proposal that could have blunted parts of the Federal Communications Commission's (FCC) net neutrality rules didn't make its way into a year-end spending bill to fund the government.

Even though the inclusion of the controversial provision was unlikely, Wednesday morning’s news was a victory for some Internet companies and outside advocates. 

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A number of large Internet companies and trade groups had pressed lawmakers in recent weeks to keep any provision related to the FCC's Internet rules out of the unwieldy appropriations fight. And outside advocates, who helped swamp the FCC with net neutrality comments last year, had directed their supporters to Congress in the past few weeks. 

Supporters had warned against a provision aimed at preventing the FCC from regulating the rates that companies like Comcast or Verizon charge customers for Internet access. Language in previous stand-alone appropriations bills could not be found in Wednesday’s bill. 

Tech companies agree with the spirit of the rate regulation provision, and the FCC has said it has no intention of regulating those rates under its new authority to ensure Internet service providers treat all Web traffic equally. However, net neutrality advocates said the rider was written broadly enough to possibly blunt other FCC authority — in relation to things like zero-rating or interconnection. 

A number of other tech-related provisions made it into the more than 2,000-page bill to fund the government. 

INTERNET TAX FREEDOM ACT

The year-end spending bill includes a nine-month extension of the Internet Tax Freedom Act, which bars state and local governments from taxing the monthly bills customers pay for Internet service. 

The 1998 ban has required a handful of extensions since it was first put in place more than 15 years ago. Another temporary extension was necessary after a proposal to get a long-term, indefinite extension was pushed into next year. 

The indefinite extension was added to an unrelated customs bill, which passed the House last week. But Senate leaders signaled the customs bill will be pushed into next year. Critics had said they would fight to strip the long-term ban out of the broader customs bill on the Senate floor.

JOINT SALES AGREEMENTS

The bill did include one provision aimed at FCC rules. The policy rider prevents some FCC TV ownership rules from applying to deals in place before the rules passed. The FCC rules — related to joint sales agreements — passed last year and were meant to prevent a single company from owning more than one major broadcast station in a market. 

But the budget rider, backed by the broadcast industry, would prevent the FCC rules from applying retroactively, leaving in place the deals that were made before the FCC approved its rules last year. The provision lasts until 2025.

INTERNET DOMAIN NAME TRANSITION

The funding bill also prevents any funds from being used to help in the government transition away from oversight over the Internet domain name system for at least another year.

The Commerce Department’s National Telecommunications & Information Administration has had oversight of the Internet’s domain name system, which matches up IP addresses with easily searchable domain names.

The government has historically contracted that role out to the Internet Corporation for Assigned Names and Numbers (ICANN), a nonprofit group. But it has tasked ICANN to lead a long-planned transition away from government oversight.

The spending bill would prohibit funds from being used for the transition for at least the 2016 fiscal year. It is unclear how much of a problem that will be since the transition was not predicted to happen until late 2016.