net neutrality

Appeals Court Errs on Net Neutrality; NAM Will Press for Legal Fight in Higher Court

By | Shopfloor Legal | No Comments

By Patrick Forrest, vice president and deputy general counsel and Cedrick Dalluge, legal fellow, National Association of Manufacturers

On June 14, 2016, a federal appeals court ruled to uphold new Federal Communications Commission (FCC) regulatory action on “net neutrality” classifying broadband providers not as an information service, but as a telecommunications provider.

The FCC heavily relied on a Great Depressionera statute enacted long before the internet was created to create its rule. Congress in 1934 never intended its Communications Act to govern 21st-century internet operations. Rather than substantively analyzing the FCC’s rule, the court insulated itself by deferring to the agency.

The court also rejected the business communities’ argument that reclassification will undermine investment in broadband infrastructure. Ironically, the court relied on the FCC assertion that “major infrastructure providers have indicated that they will, in fact, continue to invest under the framework. Those same parties later walked away from those statements, but the court emphasized that the FCC’s conclusions don’t have to be “the ones that we would reach on our own,” they only have to be “reasonable, and the majority concluded they were.

Consequently, the court failed to conduct a reasonable analysis regarding the operational business impact this rule would have on broadband providers, creating an opening for the possible deterioration of services. Overregulation risks providers diverting money from the development of new networks and technologies, stifling investment in U.S. broadband.

In dissent, Judge Williams correctly found the FCC’s order violates basic principles of agency rule-making. Regarding reclassifying broadband services on the basis of the 1934 statute, Judge Williams writes that the FCC’s justification “fails for want of reasoned decision making.” Beyond that, in crafting its rule, the FCC relied on changed factual circumstances and weak policy decisions. Judge Williams’ grave concerns regarding this ruling, shared by the National Association of Manufacturers (NAM), demand greater consideration.

By handing down this ruling, the U.S. Court of Appeals for the D.C. Circuit dictated the future of internet use. In effect, the court allowed the FCC to usurp the legislative process to pursue an inefficient quick fix to a complicated issue.

The NAM, as a leader on this issue, will continue this fight. Likely the ultimate decision-making body will be the Supreme Court, and the NAM is committed to seeing this issue through to the end.

As FCC Releases Rules to Regulate Internet Like Rotary Phones, Millennials Across America Google ‘Rotary Phones’

By | Technology | No Comments

The Federal Communications Commission has just released their so-called “Open Internet” order it approved last month. As the NAM has said in the past, this move to regulate the Internet will have a serious impact on manufacturers.

By applying a more than 70 year old law designed to regulate the use of rotary phones on the Internet growth in innovation and infrastructure will halt and burden manufacturers with more uncertainty. Manufacturing companies and facilities are dependent on the use of the Internet infrastructure and have leveraged the use of this free and open technology to become innovative, productive and advanced job creators here in the United States. Read More

FCC Chair Confirms He Will Regulate the Internet

By | Technology | No Comments

In an op-ed today in Wired Magazine, Federal Communications Commission Chairman Tom Wheeler confirmed today he plans to regulate the open internet. He intends to apply 1930’s era telecommunications law to 21st century technology. This is discouraging news for all manufacturers that depend on a robust internet to run their shopfloors and deliver superior products. As members of the NAM said in a joint letter to Congress and NAM President and CEO Jay Timmons said in USA Today, this regulation will result in a disincentive to invest in our broadband infrastructure which will chill innovation in the manufacturing sector. The NAM will continue to work closely with both sides of the aisle and Capitol Hill on their efforts to update our nation’s telecommunications laws to reflect our innovative industry.

Regulations Create Jobs? Yes, the Jobs of Regulators

By | Economy, Regulations | No Comments

James Gattuso of the Heritage Foundation applies Bastiat’s “broken windows” fallacy to the arguments of David Michaels, OSHA Administrator, to shattering effect. From “Jobs, Regulations and Broken Windows“:

[Michaels] cited OSHA’s recently withdrawn proposal to limit workplace noise. The standard was criticized for imposing excessive costs. But Michaels argued the requirements would be a boon to private enterprise. “[B]ecause OSHA has a weak noise standard…,” he explained, “U.S. employers have no incentive to buy modern, quieter machines, which means that U.S. manufacturers don’t build them, and there are few jobs in the United States for engineers who could design them.” Imposing mandates would presumably create those jobs, boosting the economy.

That would be a good thing if true. Think of how easy it would be for regulators to rev up the economy. Just place more burdens on businesses, and see the economy grow as they spend money to comply with them. That, however, is simply not the way the world works. Michaels’ argument is nonsense on stilts.

Frederic Bastiat, the 19th Century French economist, refuted the argument that breaking windows produced net economic benefits. Yes, glaziers did well in the repairs, but the work misallocated capital that could be better spent on more productive investments.

It’s not only regulators who base their arguments on jobs without the context of productivity or greater economic good, Gattuso notes.

[Some] have argued that pending FCC “net neutrality” rules would destroy jobs because the marketplace “losers” would be telephone and cable firms who employ large numbers of people, while the “winners” would be lean Internet content firms such as Google and Amazon.com, who have relatively small workforces. But such arguments completely miss the point. The problem with net neutrality rules has nothing to do with protecting fat telephone and cable payrolls. The problem is that, by interfering with innovation and investment, the recently-adopted rules will stymie growth of the Internet. That will probably mean fewer jobs for the economy as a whole – but certainly it would mean fewer benefits for society.

The goal should not be jobs, but wealth creation.

An Unconstitutional Power Grab that Will Kill Millions of Jobs

By | Energy, Global Warming, Regulations | One Comment

Rep. Fred Upton (R-MI), the incoming chairman of the House Energy and Commerce Committee, and Tim Phillips of Americans for Prosperity, take on the Imperial EPA in a Wall Street Journal op-ed, “How Congress Can Stop the EPA’s Power Grab“:

On Jan. 2, the Environmental Protection Agency will officially begin regulating the emission of carbon dioxide and other greenhouse gases. This move represents an unconstitutional power grab that will kill millions of jobs—unless Congress steps in.

The gist …

The best solution is for Congress to overturn the EPA’s proposed greenhouse gas regulations outright. If Democrats refuse to join Republicans in doing so, then they should at least join a sensible bipartisan compromise to mandate that the EPA delay its regulations until the courts complete their examination of the agency’s endangerment finding and proposed rules.

Like the plaintiffs, we have significant doubt that EPA regulations can survive judicial scrutiny. And the worst of all possible outcomes would be the EPA initiating a regulatory regime that is then struck down by the courts.

The National Association of Manufacturers is actively challenging the EPA’s attempt to regulate greenhouse gas emissions and especially its targeting of specific emitters — power plants and refineries — for which the agency has no statutory authority. A summary of the NAM’s active court proceedings is here.

See also Hugh Hewitt’s blog, “Obama’s EPA and the 2012 Elections.”

The EPA is just one of the Executive Branch agencies attempting to replace Congress as the policymaking branch of government, a power grab that threatens the economy and the U.S. separation of powers. Conn Carroll at the Heritage Foundation reports on other, more recent examples of the aggressive regulatory state in “Big Government Strikes Back,” citing the HHS’s plan to impose federal price controls on health insurance and the FCC’s “net neutrality” rules.

A Review of a Very Busy Week for Manufacturers in Congress, Executive Branch

By | Briefly Legal, Communications, Health Care, Regulations, Taxation, Trade | One Comment

Catching up with last week’s blizzard of legislative action and regulatory excess…

On Thursday, Dec. 23, the Environmental Protection Agency circumvented the policymaking branch of government, the U.S. Congress, and announced its plans to regulate greenhouse gas emissions from such sources as coal-fired power plants and refineries. In a statement, Jay Timmons, executive vice president of the National Association of Manufacturers, said, “Today’s announcements demonstrate the EPA’s commitment to move forward with an overreaching agenda that will only raise energy costs and hurt manufacturers’ ability to grow, create jobs and compete in the global marketplace.” 

As its final legislative action before adjourning, the House on Wednesday, Dec. 22, agreed to the Senate’s stripped-down version of H.R. 6517, the Omnibus Trade Act. With removal of the critical Miscellaneous Trade Benefits language, the bill is more minibus: It extends for six weeks Andean Trade Preferences Act benefits for Colombia — well-deserved — and for Ecuador, now governed by the leftist government of Rafael Correa, which has attacked the rule of law and violated its treaty obligations. The bill also extends Trade Adjustment Assistance authority for retraining programs for workers affected by trade. The incoming Ways & Means chairman, Rep. Dave Camp (R-MI), commented, “I would rather have passed a longer-term extension of ATPA and TAA, and unfortunately, the other provisions of the House bill died in the Senate.  I look forward to working in the next Congress on additional trade legislation, including enacting the trade agreements with Colombia, South Korea, and Panama.” 

Also on Wednesday, the House approved the Senate-amended version of H.R. 847, the James Zadroga 9/11 Health and Compensation Act, by a vote of 206-60, with 168 members not voting. The earlier House bill had a pricetag of $7.4 billion; thanks largely to the doughtiness of Sen. Tom Coburn (R-OK), the total cost has been reduced to $4.2 billion with stronger oversight provisions included and a cap imposed on trial lawyer fees. (Coburn news release.) The compromise language replaces the House’s early funding mechanism, a tax on multinational companies that do business in the United States. Instead, the law charges  “a 2 percent excise fee on foreign manufacturers/companies located in countries where the U.S. does not have an international procurement agreement receiving government disbursements made under future procurement agreements.  In addition, the bill would extend fees on H-1B and L-1 visas until 2015.” (Senate GOP release.) 

The Senate confirmed federal judges, but did not act on two controversial nominees to U.S. District Court of interest to manufacturers: John “Jack” McConnell, the Rhode Island trial lawyer who masterminded the state’s litigation against paint manufacturers, and former Wisconsin Supreme Court Justice Louis Butler, Jr., who helped strike down the state’s limits on medical liability and promoted the scheme of “market share liability” for paint manufacturers. 

On Tuesday, Dec. 21, the House of Representatives agreed to the Senate amendments to the FDA Food Safety Modernization Act as contained in H.R. 2751, and the bill now goes to President Obama for his signature. The NAM supported the bill. For more, see Food Manufacturing’s report, “What The Food Safety Modernization Act Means To You.”  Read More

FCC Net Neutrality Vote is Concerning

By | Economy, Miscellaneous, Technology | No Comments

Manufacturers know that the future of their industry and their ability to compete in a global marketplace is tied closely to the deployment of new broadband lines and high-speed wireless data services across the United States and we need an environment that encourages innovation and investment in these critical areas.  That’s why manufacturers are concerned that the rules approved today by the Federal Communications Commission could inject more uncertainty into broadband policy and have a chilling impact on investment.

NAM members strongly agree with the statement by Commissioner Baker that “Preserving the open Internet is non-negotiable; it is a bedrock principle shared by all in the Internet economy, a building block on which we can all agree.”  

We also share Commissioner Baker’s concern about intervening “in the one sector of the economy that is working so well to create high-paying jobs, untold consumer choice, and entrepreneurial opportunity.”

As we’ve said many times before, Congress, not the regulators, needs to step in and adopt a comprehensive broadband policy aimed at the deployment of services, open access and smart resource allocation , including policies that:

  • Remove barriers to entry that prevent broadband providers from offering high-speed information services to homes and businesses;
  • Balance the need for regulations against the potential to dampen private industry’s incentive to invest in broadband technology;
  • Encourage federal and state regulators to monitor the rollout of broadband services;
  • Support a federal framework to ensure fair, technology-neutral competition for all providers; and
  • Allow for the continued public/private collaboration to improve the security of the network through incentive-based legislative and regulatory tools.

Internet Regulation is a Policy Decision that Congress Should Make

By | Communications, Regulations, Technology | One Comment

Manufacturers appreciate efforts at the Federal Communications Commission (FCC) to bring closure to the debate over regulating the Internet. Providing certainty in this area will encourage the deployment of new broadband services and the jobs that go with them. But  comments today by FCC Commissioner Julius Genachowski and his plan for the Commission to adopt a Net Neutrality Order at its December 21st Open Meeting just create more uncertainty. We share the views of Commissioner Meredith Attwell Baker that the decision of “whether the Internet should be regulated is a decision best left to the directly elected representatives of the American people.”

Ensuring the deployment of new broadband lines and high-speed wireless data services is critical to manufacturers across the nation – these are the companies that can create the jobs we need to strengthen our economy. In the end, Congress needs to step in and adopt a comprehensive broadband policy, and it should be aimed at the deployment of services, open access and smart resource allocation, including policies that:

  • Remove barriers to entry that prevent broadband providers from offering high-speed information services to homes and businesses;
  • Balance the need for regulations against the potential to dampen private industry’s incentive to invest in broadband technology;
  • Encourage federal and state regulators to monitor the rollout of broadband services;
  • Support a federal framework to ensure fair, technology-neutral competition for all providers; and
  • Allow for the continued public/private collaboration to improve the security of the network through incentive-based legislative and regulatory tools.

In the words of Commissioner Baker, “We all believe in an open Internet.  It is open today, it is fast moving, and it serves as a vibrant growth engine for our economy and job creation.  Let’s not rush to undermine it.”

Dorothy Coleman is vice president of tax and domestic economic policy for the National Association of Manufacturers.

Net Neutrality: Give Us Certainty, Not a Regulatory Choke-Collar

By | Communications, Regulations, Technology | No Comments

Coverage based on a news conference yestersday with the National Association of Manufacturers, U.S. Chamber of Commerce, and the Telecommunications Industry Association:

National Journal (blog), Groups Want Closure On Net Neutrality Debate“:

Some of the nation’s largest business groups expressed hope Thursday that stakeholders involved in the debate over network neutrality can come to an agreement with the FCC that would provide broadband users and others soon with certainty about the rules of the road without imposing regulations that might stifle innovation, CongressDaily reported.

But they acknowledged that Congress ultimately may need to pass legislation to resolve the issue.

PC World,Business Groups Question Net Neutrality Rules“:

NAM is also concerned with broadband deployment, said Marc-Anthony Signorino, director of technology policy at the trade group. “Right now, there are thousands of manufacturers in rural or underserved areas who are waiting for broadband services,” he said. “The faster we get it to them, the faster we can create jobs.” Read More

FCC Set To Bootstrap Its Own Internet Regulatory Power

By | Communications, General, Regulations | No Comments

Internet denizens across America will be watching today as the FCC takes the first big step in granting itself the authority to regulate the Internet.  An act, we’d like to add, that is something many manufacturers will be viewing with the same interest as, say, watching someone eat their own foot.  By that, I mean mostly in horror, aghast that such an overt exercise of power would be done at all, figuratively and literally cannibalizing our nation’s best means of moving forward.

This all comes in the wake of the DC Circuit’s Comcast decision that held the FCC didn’t have the authority to chastise Comcast for violating rules that were never actually…um…rules. FCC Chairman Julius Genachowski has been wracking the collective brains of his attorneys to figure out how he can get that authority.  Without having to go to Congress, that is, because they might disagree.  Well, that’s not true; they do disagree.  As a matter of fact, more than 77 Democratic Members of Congress – including Commerce Chairman Emeritus John Dingell who authored the Telecom Act of 1996 – have publicly disagreed with Chmn. Genachowski and asked him not to move forward with this scheme.

It seems as if Congress has this quaint idea that a light regulatory touch on the Internet might have something to do with its phenomenal success and growth, and that regulating it will just stifle innovation and economic growth. 

The FCC extravaganza today is the first salvo in the war: The Commission will publicly ponder the issue and then vote on whether or not they’ll issue a Notice of Inquiry to begin the process of locking down the Internet.  Of course, it’ll pass on party lines by a vote of 3-2 which, for an esoteric issue, will post a higher score than most World Cup matches this week.

Here’s the info for today’s meeting.