Technology firms engage K Street ahead of major broadband regulation fight

Broadband and Web service companies are beefing up their lobbying forces in Washington as the multibillion-dollar battle over Internet regulations gathers momentum.

Big tech firms did not wait for last week’s D.C. Circuit Court decision, which upended the Obama administration’s strategy on “net neutrality” by ruling that the Federal Communications Commission (FCC) had no right to regulate the Internet.
Google hired Liberty Partners Group to handle online competition and other tech issues; AT&T hired Prime Policy Group to lobby on broadband and net neutrality; Verizon Communications hired Trammell and Co. to work on wireless and broadband issues.

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Comcast has also expanded its lobbying efforts with new hires, but these have recently been related to its proposed purchase of NBC Universal. In the past three months, it hired Putala Strategies and Thorsen Group to lobby for the merger. General Electric, NBC Universal’s parent company, hired the C2 Group last month.

Net neutrality rules would prevent broadband service providers from slowing traffic to some sites. Providers such as Comcast argue that they should be able to manage traffic on their networks. President Barack Obama sides with companies such as Google in saying that networks owners should be banned from discriminating between users.

The court ruling was a major victory for broadband companies like Comcast, AT&T and Verizon, and an equal setback for Google, Skype, eBay and other advocates of net neutrality regulations.

While companies await the FCC’s next move, they are mobilizing their lobbying on Capitol Hill, where changes to the law will be made.

The Senate Commerce committees is holding a hearing this week to examine the implications of last week’s ruling, including what it means for Obama’s National Broadband Plan, which is intended to expand broadband access nationally.

Senior members of Congress, including Massachusetts Democrats Sen. John Kerry and Rep. Edward Markey, have said they will work to give the FCC any additional authority it needs to enact net neutrality.

Texas Republicans Sen. Kay Bailey Hutchison and Rep. Joe Barton say they’ll try to stop any efforts to impose net neutrality rules on broadband providers.

Last year, Web, telephone and other telecom firms spent more than $160 million to make their cases in big tech debates, according to the Center for Responsive Politics. Much of that money was spent on the net neutrality fight.

The industry could beat its record in 2010, as the net neutrality debate gains new prominence and midterm elections draw near. AT&T is already listed as the top all-time campaign donor, according to the Center’s figures.

The biggest companies with stakes in net neutrality have been beefing up their lobbying forces since January, when the D.C. Circuit indicated it would challenge the FCC’s authority over broadband.

 “The Comcast decision really resets the table with regard to the National Broadband Plan and the Internet docket,” said Markham Erickson, chairman of the Open Internet Coalition, whose members include Google and Facebook and other net neutrality proponents.

“It demolishes the FCC’s legal authority to move forward with regulations on net neutrality and key components of the broadband plan,” Erickson said.

Erickson held briefings for congressional staffers this week to “educate them” on the need for open Internet rules.

With the FCC’s jurisdiction over broadband regulation in doubt, some parts of the plan may be stalled unless the agency reclassifies broadband under the law to reassert its authority over the service.

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Google, Amazon and other net neutrality proponents are lobbying the FCC to reclassify broadband under the communications laws, and the agency seems likely to follow that course of action.

Broadband is currently considered an “information service” under Title I of the law, which the court decided does not give the FCC the necessary power to regulate broadband service providers.

If the FCC reclassifies broadband as a “communications service” under Title II, it will have much broader authority over the major carriers.

Public interest groups such as Free Press and Public Knowledge, as well as Internet firms, say reclassifying broadband is the most straightforward way to give the FCC the power it needs to enforce its open Internet principles.

But the major carriers disagree, arguing broadband will not fit well into the Title II framework, which was originally designed for last century’s phone networks.

AT&T, Verizon and Comcast, the biggest providers of broadband service, say there is no reason to reclassify because they have no intention of manipulating Web traffic and do not need regulations.

“We want to preserve the status quo,” said Jot Carpenter, vice president of government affairs for CTIA, the wireless industry’s lobbying association. “We think things are working just fine. I don’t understand what the case is for changing what by all accounts is working quite well.”

The telecommunications industry has been on alert since the Obama administration made clear its commitment to open Internet regulations and ubiquitous Internet access. Carriers have been busy lobbying the FCC on the broadband plan and fighting against net neutrality regulations that they say are too rigid.

On Capitol Hill, carriers have been pushing for more airwaves to support their mobile phone services. Broadcasters have chafed at the FCC’s proposal to allow broadcasters to voluntarily give up some of their airwaves in exchange for a cut of the auction proceeds.

Gordon Smith, president of the National Association of Broadcasters, this week blasted that idea at the group’s trade show in Las Vegas, saying the proposal is far from voluntary and broadcasters won’t actually have a choice in the matter.

“This sounds about as voluntary as Marlon Brando saying in ‘The Godfather’ that he wanted either the guy’s signature or his brains on the contract,” Smith said.

Comcast, meanwhile, is at the center of two of the biggest policy questions of the year. While the court validated the company’s claim that the FCC had no right to sanction it for throttling Web traffic, Comcast is pushing back against efforts to reclassify broadband.

Comcast is also lobbying aggressively to clear its proposed acquisition of NBC Universal. Public interest groups and some smaller cable providers and content producers say the $30 billion merger would end up raising cable rates and limiting the diversity of content available to consumers on both television and the Internet.

AT&T and Verizon, both with deep lobbying pockets, have been trying to get lawmakers interested in rewriting the 1996 Communications Act altogether to better reflect current technologies and consumer habits.

An overhaul of the laws may take years, and consumer advocates and Internet companies say the FCC can’t grind to a halt while it waits for congressional action.

They’re also hoping last week’s court decision finally convinces firms such as Microsoft, Amazon and Intel to leverage their lobbying muscle for the net neutrality cause.

“The future of broadband is no longer theoretical,” said Maura Corbett, partner at Qorvis Communications. “It’s pocketbook.”