House approves transparency carveout for small Internet providers

House approves transparency carveout for small Internet providers
© Greg Nash

The House on Wednesday unanimously passed one of the first pieces of legislation that deals directly with controversial net neutrality regulations passed by the Federal Communications Commission. 

The broader Internet regulations have stirred acrimony between the parties, but the bipartisan bill passed Wednesday deals with the expansion of a narrow transparency carveout for small Internet service providers.

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The proposal would allow smaller companies — firms providing Internet service to fewer than 250,000 people — to ignore the new transparency requirements for five years.

The FCC already temporarily exempted small providers from complying with new transparency rules that require companies to clearly disclose information like the full monthly price of Internet service, promotional rates, data caps and any customer degradation of Internet service. They must still follow more baseline transparency rules, however.

"They still have to, as you know, follow all the laws and all the protections and all that," Rep. Greg Walden (R-Ore.) said about the broader Internet regulations. "It is just this reporting requirement that seemed pretty onerous. And in fact the FCC thought it was when they first came out with their rule." 

The bill extends the length of the carveout while the FCC studies whether it should become permanent. It also expands the definition of a small provider — meaning that more companies would be eligible for the exemption. 

Proponents say smaller companies don’t have the resources to fully comply with the requirements. 

Similar legislation has been introduced in the Senate but has not moved. 

Earlier this week, the Obama administration gave its blessing to bill, with one warning. 

“The Administration, however, will not support any attempt to undermine the important consumer and economic protections in the Open Internet order that are supported by millions of Americans,” the administration said. “The Administration looks forward to continued conversations with the Congress to help ensure a free and open Internet.”

The transparency carveout is only a small portion of more controversial rules adopted last year that reclassified Internet service providers as common carriers. The rules, currently being challenged in court, were approved to give the FCC more authority to ban Internet providers from blocking or slowing traffic to any website or from offering “fast lanes” for websites willing to pay extra for improved delivery of their content. 

Democrats and a number of Web companies have lauded the FCC’s broader regulations, but Republicans and Internet service providers have compared them to utility-style regulations.