Analyst: White House, Senate Pose Roadblocks to Overhaul of FCC Rules

The Republicans this week reclaimed the majority in the House of Representatives and already have indicated plans to challenge Network neutrality rules adopted by the Federal Communications Commission.  

But the Democrats still control the Senate. Add President Obama into the equation, and the Republicans are likely to face a tough road overturning the FCCs Internet rules.

In a telecom update to clients, Medley Global Advisors LLC analyst Jeffrey Silva said he does not think the Republicans can overhaul the rules because Democrats still control the Senate and, even if such a measure were to get through Congress, it would be vetoed by President Obama.”

Led by Michigan Congressman Fred Upton, who is the chairman of the House Energy and Commerce Committee, the Republicans have indicated plans to attempt to repeal the FCCs 133-page order through the Congressional Review Act. Greg Walden, who serves as the new chairman on the House Subcommittee on Communications and Technology, stated last month that lawmakers plan to hold a series of hearings on the substance, process and claims of authority underlying” the FCCs rulemaking proceeding.

Republicans contend the FCC exceeded its authority and needlessly issued rules that could harm investment and subject network operators to litigation. The FCC asserts that it had ample authority under federal law to issue its order.

The Republicans crackdown on the FCC over Net neutrality will likely have little material impact,” Silva wrote, but should hold symbolic value” by reassuring new Tea Party-affiliated members of the GOP (as well as the broader movement) that Republicans are serious about fixing government policies they believe are confounding the economic recovery as well as exacerbating the federal budget deficit and national debt.”

For several years, U.S. telecommunications providers, politicians and others have advocated for major reforms in federal communications law, including the Telecommunications Act of 1996. But partisan politics could further stall any significant legislation on Capitol Hill.

Bitter partisanship lingering from the midterms and carrying over into the 2012 election cycle makes it hard to envision Congress passing legislation to revamp the telecom law approved with bipartisan support in 1996,” Silva wrote.

In December, the FCC voted 3-2 to prohibit the likes of broadband service providers such as AT&T Inc. and Comcast Corp. from blocking lawful content or discriminating against applications or services. The rules also require broadband carriers to make certain public disclosures regarding their network management practices, performance and commercial terms.

Fewer of the rules apply to mobile broadband providers like Sprint Nextel.

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