The November Election and the FCC: Predictions for Five Key Policies

The November Election and the FCC: Predictions for Five Key Policies

October 20, 2020, Covington Alert

The Federal Communications Commission (FCC) is an independent agency, but its agenda is controlled by its Chairman, who along with any new Commissioners, is appointed by the President. The November 3rd election therefore will have a substantial effect on the FCC’s policies for the telecommunications, media, and technology sectors in 2021 and beyond. This alert examines the differences – and, in a some cases, the similarities – that we expect to see at the FCC in a Biden or second Trump administration.

1. Net Neutrality and Broadband Regulation

Although the “net neutrality” debate gets the headlines, that issue is a subset of a broader question facing Congress and the FCC. At the FCC, the question is the extent to which the FCC can or should exercise authority over the provision of broadband by Internet Service Providers (ISPs). Democrats and Republicans at the FCC have tended to differ sharply on this question and that split likely will continue. Consequently, the party that has majority control at the FCC will shape the agency’s agenda on determining whether and how much to regulate ISPs’ broadband offerings.

• If Biden Wins: A Democrat-led FCC is likely to re-evaluate decisions made under current FCC leadership, which found in the 2017 Restoring Internet Freedom Order that broadband is a Title I “information service” subject to little or no regulation. The purpose of that re-evaluation could be in part to restore the specific “net neutrality” rules (e.g., no blocking, throttling, or paid prioritization) adopted during the Obama Administration. But it also could result in the FCC asserting broader jurisdiction over ISPs generally, such that the FCC could adopt rules or take other action in areas such as data privacy, consumer protection, foreign investment, merger reviews, and national security.
• If Trump Wins: If the FCC remains under Republican control, the 2017 Restoring Internet Freedom Order presumably would remain in place. This would be consistent with the Republican view that broadband does not warrant sector-specific regulation and instead should be subject only to general consumer protection principles enforced by the U.S. Federal Trade Commission (FTC).

2. Section 230 Reform

While both Republicans and Democrats in Congress have expressed varying concerns over the practices of large technology companies and discussed revisions of the twenty-five year old law, there is growing interest among Republicans to see the FCC take action to modify the protections afforded those companies under Section 230 of the Communications Decency Act (CDA). Last week, FCC Chairman Ajit Pai announced that he intends to propose rules to “clarify” the scope of liability protection afforded technology companies under this provision. How this proposal will fare is highly likely to be dependent on the outcome of the election.

• If Biden Wins: A Democrat-led FCC is more likely to view Section 230 and other policies affecting tech companies as outside the agency’s proverbial lane, on the theory that it amounts to content regulation and that form of regulation generally is beyond the FCC’s mandate. While FCC leadership likely would be willing to make policy recommendations to other parts of the government when it comes to content regulation and protection, indications are that a Democrat-led FCC would not take up Chairman Pai’s proposed rules on Section 230.
• If Trump Wins: There is a high likelihood that a Republican-led FCC would attempt to pass new rules that interpret Section 230 in a manner that narrows the scope of liability protection afforded to social media and other technology platforms. This step would put the FCC in closer alignment with the Trump Administration itself, which has repeatedly called out popular tech platforms for alleged bias. Whether the Section 230 rulemaking would represent a one-time step or the beginning of a more activist FCC in the technology space is unclear. Of course, any rules interpreting or implementing Section 230 could be challenged in court on both statutory and constitutional grounds.

3. National Security

Republicans and Democrats at the FCC largely agree that the agency has an important role to play in advancing policies to protect U.S. telecommunications networks, including subsea cables and 5G networks, from national security threats. But each party is likely to go about that differently.

• If Biden Wins: A Democrat-led FCC could raise national security concerns as a basis to re-assert jurisdiction over broadband networks and certain enterprise telecommunications offerings—moving beyond the more defined scope of actions taken to date. For example, the FCC currently is attempting to revoke FCC licenses held by Chinese state-owned telecom carriers. These licenses, however, are necessary only to provide “telecommunications services” within the FCC’s jurisdiction. By taking a more expansive view of what constitutes “telecommunications services,” the FCC could exclude more of these companies’ offerings from the U.S. marketplace. Similarly, a Democrat-led FCC may be inclined to use the agency’s equipment authorization procedures to encourage or require device manufacturers to build cybersecurity protections into some types of devices—an idea that has been supported by current Democratic Commissioner Jessica Rosenworcel.
• If Trump Wins: A Republican-led FCC likely would continue to align closely with the Trump Administration’s “tough on China” policy. We would expect to see continued prioritization on efforts to remove Chinese-manufactured equipment from U.S. telecommunications networks and to revoke U.S. licenses of certain Chinese carriers. (Though to be clear, we do not expect Democrats to seek to roll-back those efforts aimed at Chinese-sourced equipment.) Republicans are less likely, however, to attempt to propose cybersecurity rules on telecommunications carriers or broadband providers, or to use the agency’s equipment authorization procedures to advance cybersecurity objectives.

4. Spectrum and Wireless Infrastructure Policy

Regardless of who wins on November 3rd, we expect the FCC to continue to work to make spectrum available for 5G services. Indeed, most of the major spectrum decisions in the past four years have been bipartisan. The parties differ in some respects, however, on how best to do that.

• If Biden Wins: A Democrat-led FCC is likely to continue the efforts of many administrations to make spectrum available for commercial wireless services, especially 5G. Under a Biden FCC, however, the FCC may well reverse, at least in part, recent decisions that preempted many state and local requirements affecting the deployment of 5G infrastructure, such as small cells. Democrats currently on the FCC have opined that while some reforms to accelerate 5G deployments are appropriate, the FCC has overstepped its bounds in the degree to which it has limited state and local say over cell siting and similar infrastructure policy decisions.
• If Trump Wins: A Republican-led FCC in 2021 also would continue efforts to make spectrum available for 5G and other commercial wireless services. A more interesting question is whether it would continue to resist some highly unusual spectrum policy proposals that have surfaced in other parts of the Trump Administration—such as proposals to create a “nationalized” 5G network operated by the Department of Defense. If a Republican-led FCC were to change course and take up such proposals in 2021, it would represent a sea change in bipartisan FCC spectrum policy going back several decades. In addition, a Republican-led FCC likely would continue to pursue policies to facilitate rapid rollout of 5G, including broad preemption of state and local policies.

5. Broadband Deployment / Universal Service

Both parties strongly support the use of Universal Service Fund (USF) monies to facilitate the deployment of broadband service in rural and Tribal areas. But there are nuances to each party’s approach to universal service programs. Under a Democrat-led FCC, we would expect to see a greater willingness to allow the use of E-rate funds to subsidize broadband service directly to students in their homes—a move that the current FCC leadership has suggested is not allowed under the statute. We also would expect a Democrat-led FCC to increase focus on the use of Lifeline funds to make broadband affordable to low-income consumers.

A looming policy question the FCC soon may have to confront (regardless of which party leads it) concerns the funding source for the USF, an issue known as “contributions reform.” The matter is complex, but one key question is whether and to what extent broadband service providers should be required to contribute a portion of their revenue to the USF. Both Democrats and Republicans have been hesitant to address contributions reform, given the political challenges associated with potentially adding a new fee to consumer broadband bills. But with the need for more ubiquitous broadband growing more acute, it is possible that the next FCC chair, regardless of party, will have to take up contributions reform in some manner.

If you have any questions concerning the material discussed in this client alert, please contact the following members of our Communications and Media practice.