Why Republicans are Desperate for a Net Neutrality Compromise

For years, fierce opposition to net-neutrality regulation has been an article of faith for Republicans.

The party included the issue in its 2012 platform, and Sen. Ted Cruz memorably referred to it as "Obamacare for the Internet."

But now, with the Federal Communications Commission heading toward stringent net-neutrality regulations that would treat the Internet like a utility, Republicans are scrambling to find an alternative solution.

South Dakota Sen. John Thune, the new chairman of the Senate Commerce Committee, is working on a compromise bill that he says would address the concerns of net-neutrality advocates without invoking utility-style powers.

"We think a legislative route is a better way to go, and we've developed some language that we think addresses a lot of the concerns that Democrats have raised, but does it without that heavy regulatory approach that they're advocating," he explained to reporters this week.

A spokesman for the House Energy and Commerce Committee said that Chairman Fred Upton and Communications Subcommittee Chairman Greg Walden are also trying to find a "sustainable bipartisan path forward that won't end up in court and provides consumers the protections they deserve, the innovative choices they want, and the certainty that will ensure continued investment in the Internet."

Republicans know that to have any hope of stopping the FCC from claiming broad new powers over the Internet, they'll need support from Democrats. A straight repeal of net neutrality regulations would face a certain veto from President Obama.

It's unclear whether any Democrats will sign on to compromise legislation. Thune explained that he's aiming to produce a bill to preempt an FCC vote (which is currently slated for Feb. 26), but he admitted that Democrats are more inclined to wait to see what the agency does.

Sen. Bill Nelson, the top Democrat on the Senate Commerce Committee, declined to say whether he'll back Thune's efforts. Senate Democratic Leader Harry Reid vowed this week that any attempt to weaken net neutrality would be "met with a swift and unified Democratic opposition."

Supporters of net neutrality argue that Internet service providers shouldn't be allowed to block online content or favor some websites over others. They fear that a multitiered Internet with "fast lanes" and "slow lanes" would benefit giant corporations at the expense of users and small start-ups.

Republicans have long viewed net-neutrality regulation as unnecessary government control of the Internet. Their sudden change of heart comes as the FCC appears ready to claim even broader authority over the Internet.

All indications are that the FCC will heed Obama's call for the agency to classify broadband Internet as a "telecommunications service" under Title II of the Communications Act.

The FCC first enacted net-neutrality rules in 2010, but a federal court struck them down early last year. The only way to enact new rules that can hold up in court, Internet activists say, is for the FCC to invoke its sweeping authorities under Title II, which it currently uses to regulate landline telephones.

FCC Chairman Tom Wheeler proposed new net-neutrality rules last May that wouldn't have used Title II, but he seems to have reversed course in the face of a massive public backlash and Obama's endorsement of Title II in November.

Speaking at the international CES conference in Las Vegas on Wednesday, Wheeler outlinedthe advantages of using Title II and dismissed the concerns of the broadband industry that it will stifle growth.

Applying Title II to the Internet is a nightmare scenario for Internet providers such as Comcast, Verizon, and AT&T, who warn that the section would crush their industry with burdensome and antiquated regulations.

The FCC could use Title II to not only oversee how the providers manage traffic, but also set retail prices, impose new government fees, and determine which customers they have to serve. Wheeler has said he would waive unnecessary provisions of Title II, but that has been little comfort to the broadband providers.

Realizing they need a better strategy than total opposition, the industry groups have been urging Republicans to moderate their stance on net neutrality. Even the old 2010 regulations would be preferable to a Title II regime for the broadband providers.

"If they do this under Title II, it's going to create all kinds of opportunities for regulatory shenanigans down the road that can be very harmful to innovation and very harmful to consumers," Thune told reporters.

Passing compromise legislation will be a tough task. Net neutrality advocates see little reason to compromise just as they are on the brink of a major victory at the FCC. And it's hard to imagine that conservatives, who for years have decried net neutrality as a government takeover of the Internet, will suddenly vote for a bill leading to tough new regulations.

Thune declined to discuss specifics of his draft bill, but Democrats will be unlikely to support anything that leaves room for pay-for-priority Internet traffic deals.

Democrats are also likely to demand that the new rules apply to Internet service on cell phones, even though the 2010 rules largely exempted cellular service. AT&T and Verizon are strongly opposed to including cellular service in the new regulations, and it will be tough for Republicans to give in on the point.