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The never ending battle over net neutrality is far from over. Here’s what’s coming next.

December 16, 2017 by  
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A protester holds a sign at the Federal Communications Commission (FCC) on Dec. 14, 2017. (Carolyn Kaster/AP)

The Federal Communications Commission’s vote on Thursday to repeal its net neutrality rules marked the end of a brief experiment by the network regulator to rein in the tremendous power of Internet providers by treating them like the highly-regulated telecoms. Now, providers will be allowed to speed up some websites — and block or slow down others — so long as they disclose it to the public, and violations will largely be handled after the fact by the Federal Trade Commission, not the FCC.

Far from settling the matter, the Republican-led FCC has simply opened a new chapter in a bruising Washington battle that stretches back nearly as far as the dot-com boom itself. Those on both sides who have watched the policy seesaw wildly back and forth have but one emotion to report: Exhaustion.

“For the last decade, we’ve been on a regulatory roller coaster,” said Jack Nadler, a partner at the law firm Squire Patton Boggs, who blames a chronic case of net neutrality whiplash on Washington’s “recurring bureaucratic convulsions.”

That dynamic threatened to play out once more this week as the FCC voted to dismantle the Obama-era network rules put into place just two years ago. Even before the agency’s meeting had concluded, supporters of the regulations quickly vowed to sue the FCC in an effort to stop it.

“We will fight the FCC’s decisions in the courts, and we will fight it in the halls of Congress,” said Sen. Edward J. Markey (D-Mass.), who promised Thursday to introduce legislation along with more than a dozen other lawmakers to overturn the FCC vote.

New York’s attorney general, Eric Schneiderman, announced Thursday he intends to file a multistate lawsuit against the FCC.

Meanwhile, state lawmakers in California and Washington have said they will try to write their own legislation to replace the federal rules — though that effort could be swiftly quashed. The FCC’s decision on Thursday explicitly sought to preempt states from going around the federal rules, and agency officials made clear they would act against such attempts.

Any new litigation could lead to the second time the FCC has gone to court over net neutrality in as many years.

“I’m shocked — shocked! — that people are going to challenge this decision in court,” FCC Chairman Ajit Pai said sarcastically to reporters after the vote.

The zigzag approach to net neutrality is a byproduct of the fact that the FCC is an independent agency; its levers over industry change hands every time a new party takes the White House. In an era of extreme polarization in Washington, that has led to Republicans and Democrats seeking to overturn each others’ policies at every opportunity.

“The net neutrality vote has taken on a back-and-forth quality as it has become more partisan,” said Randolph May, president of the right-leaning Free State Foundation. “This is unfortunate because so much of a proper resolution of the issue, aside from the legal analysis, depends on economic understanding and technological savvy. These are areas in which partisan politics ought to have less sway in determining the right answers.”

May said he is confident the seesaw will settle on a policy result that looks much more like what Pai and his allies approved this week than what his predecessor, Chairman Tom Wheeler, put in place.

Other longtime participants in the debate say the fight has only continued this long because Internet providers refuse to concede.

“It has seesawed back and forth because the ISPs won’t be satisfied until they’ve completely neutered the FCC for all time,” said Gigi Sohn, a former adviser to Wheeler.

A legal battle could drag on for months if not years, analysts say, adding to a saga that’s put powerful Washington lobbyists and sophisticated lawyers at each others’ throats over the future of the Web since well before the rise of services like Uber or Netflix streaming.

Under President George W. Bush, the FCC concluded all consumers deserved to enjoy four fundamental freedoms online: The freedom to access any Web content of their choice, so long as it was legal; the freedom to use any online application; the freedom to use their home broadband connections on any device; and the freedom to get subscription information from their own providers.

First unveiled in a speech in 2004 by Republican FCC Chairman Michael Powell, those principles were formalized as an “Internet policy statement” in 2005. Those provisions were nonbinding, and they didn’t have the force of regulation.

That changed in 2010, when the FCC approved its first-ever net neutrality rules. The new rules were a direct result of the FCC trying — and failing — to use the earlier Internet policy statement to punish Comcast’s alleged blocking in 2007 of peer-to-peer filesharing traffic. The new rules banned the blocking of Web content by Internet providers, as well as the slowing down of websites.

But the 2010 regulations were soon challenged by Verizon, which argued the FCC had overstepped the authority given to it by Congress. After three years of litigation, a federal appeals court finally sided against the FCC in 2014, striking down the most important provisions of the agency’s regulation. The court explained the FCC had tried to regulate Internet providers in the same way it regulates traditional telecom companies, but without first identifying broadband as a telecommunications service.

The ruling was a major victory for Verizon and its allies at the time, though it soon came to look like a pyrrhic one as the FCC under Wheeler quickly went to work on drafting rules that industry groups feared would be even more strict.

Having been rebuked for essentially failing to show its work, the FCC approved new rules in 2015 that took the extraordinary step of classifying Internet providers as telecom providers, before imposing some of the same bans on blocking and slowing as it had before. Broadband companies vocally opposed the decision, as it opened the door to further regulation in the future, including the possibility of government price controls. Advocates hailed the new rules as a significant consumer protection against the rising power of broadband companies who could determine what sites Americans may effectively access as more of their daily lives moved online.

An industry coalition sued the Democratic-led FCC, leading to yet another court battle. This time, the agency won handily, with a three-judge panel in 2016 upholding the regulations in light of the edits.

Then came President Trump, and along with him, Republican control of the FCC. GOP officials felt they had been railroaded by Democrats on net neutrality, and Pai — who had been sharply critical of the 2015 rules — vowed to undo his predecessor’s legacy.

That effort culminated in Thursday’s vote, with broadband companies again emerging on top and tech companies on the defensive.

“The net neutrality debate is about protections for consumers and has bounced between the FCC and courts for too long,” said Noah Theran, a spokesman for the Internet Association, which represents tech firms in Washington. “Consumers deserve robust, legally sustainable net neutrality protections that ban paid prioritization, blocking, and throttling. The Internet industry will continue our work to enshrine strong, enforceable protections into law.”

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Republicans finalize tax plan, expand benefits for working families in bid to win over Rubio

December 16, 2017 by  
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Congressional Republicans finished rewriting their massive plan to overhaul the tax code on Friday, adding in a significant expansion of the Child Tax Credit aimed at boosting benefits for low-income families.

The change was added to meet demands from Sen. Marco Rubio (R-Fla.), who set off frenzied, last-minute negotiations when he threatened on Thursday to vote against the bill unless the credit was expanded.

Rep. Kristi L. Noem (R-S.D.), one of the Republicans tasked with ironing out a final bill, said the credit had been expanded, particularly for low-income and working-class families.

“I believe that we’re in a good spot and should be able to earn his support” she said of Rubio.

But a Rubio spokeswoman said the senator was reviewing the final measure to see if the expansion was enough for him to vote for the bill.

“We have not seen bill text, and until we see if the [amount of the expanded credit] is significantly higher, then our position remains the same,” she wrote in an email.

Republican negotiators have proposed to expand the Child Tax Credit from $1,000 per child to up to $2,000 per child, but in earlier versions of the plan, that full expansion would not be available to every family. Many lower-income families would only qualify for a $1,100 child tax credit.

Noem said Friday the plan’s credit for such families had been increased to $1,400, though it couldn’t be immediately learned how the expansion would work.

House Ways and Means Committee Chairman Kevin Brady (R-Texas) said negotiations were complete, but he would not say if Rubio had been placated.

“We ought to have every senator’s support on this tax reform bill,” Brady said.

Rubio, in a series of Twitter posts earlier Friday, said the credit needed to be “meaningfully higher” for families that earn between $20,000 and $50,000 a year.

Rubio voted for an earlier version of the tax bill that Republicans passed through the Senate by a 51 to 49 margin.

If Rubio were to oppose the final plan, it could imperil the legislation’s chances of becoming law.

Republicans hold 52 Senate seats and need support from 50 of their members to pass the bill, as Vice President Pence could be called on to break a tie.

Democrats unanimously oppose the plan, giving individual GOP members significant leverage if they threaten to vote against it.

Sen. Bob Corker (R-Tenn.) voted against the Senate version of the tax plan over its additions to the debt, and while he has said he’ll review the final plan, he is not expected to support it. Sen. Mike Lee (R-Utah) has joined Rubio in pushing for the expanded credit and said Thursday through a spokesman that he has not yet made a final decision on the final plan.

Further complicating matters, Sen. John McCain (R-Ariz.) is in the hospital recovering from cancer treatment. Sen. John Cornyn (R-Tex.) assured reporters on Thursday that McCain would return to vote on the tax package next week.

Sen. Thad Cochran (R-Miss.), another member who has recently been hospitalized, is in Washington and expects to vote for the final plan next week, a spokesman said.

A number of Republicans have opposed Rubio’s push to expand the child tax credit for people with lower incomes, saying many of those families do not pay federal income taxes and would end up receiving checks from the government.

But Rubio has held strong views on this issue for years, believing more must be done to help working families through the tax code.

His demands Thursday sent shock waves through Washington.

“People are really infuriated by it,” said Steve Moore, who was a top economic adviser to President Trump during the campaign. Moore said it remained unclear what Republicans would do if Rubio remains in­trac­table.

Trump on Friday expressed optimism the bill would pass, telling reporters that the Child Tax Credit is “increasing on a daily basis.”

“The Democrats have done nothing on the child tax credit . . . we’re putting in a tremendous child tax credit,” Trump said.

Democrats have proposed numerous expansions of the Child Tax Credit and other programs aimed at low-income families, but many of them made a calculated decision two weeks ago to oppose Rubio’s first effort to expand the credit in the bill.

The Child Tax Credit is just one component of a sweeping tax overhaul that Republicans have moved through Congress swiftly since November. The package would slash corporate tax rates, temporarily lower taxes paid by many households, and eliminate a number of tax breaks.

As Republicans sought to secure votes in the final weeks, they’ve made a number of changes to their plan meant to expand benefits to businesses and wealthier Americans. But Democrats — and some Republicans — have complained there should have been more done to help the middle class and the working poor.

The total package is expected to cut roughly $1.5 trillion in taxes over 10 years. Expanding the Child Tax Credit to accommodate Rubio’s demands could force Republicans to scale back other tax reductions, as Senate rules limit the total amount the plan can add to the national debt.

Republicans’ final plan does not include a proposal to move up the bill’s expiration date for many of its tax cuts for individuals, according to Republicans involved in the talks. In the Senate version of the bill, many of the cuts were set to end in 2025, and it appears they’ll keep that timeline in the final plan, though Republicans earlier this week had considered moving up that expiration date to 2024.

Republicans have said they expected the tax breaks to be extended by a future Congress.

The new timeline would have given them more revenue to fund other changes they’ve made to the plan, but it would have further cut benefits for middle-class households in a tax overhaul whose benefits already skew toward corporations and the wealthy.

It could not immediately be learned how Republicans aim to offset the changes included in their final plan.

After Republicans said they’d completed final changes, House members began signing what is known as a “conference report.”

The House and Senate plan to vote on the final bill next week. If Congress approves it, Trump could then sign it into law.

— Reporter Heather Long contributed to this report.

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