NCTA: FCC Needs To Rethink Net Neutrality Compliance Burden

Says it has significantly underestimated time and money it will take

By John Eggerton -- Broadcasting & Cable, 4/13/2011 12:56:43 PM

The National Cable & Telecommunications Association has told the FCC and the Office of Management and Budget that the FCC has significantly underestimated the time and money it will take to comply with the transparency and complaint procedures it adopted in its Open Internet order (net neutrality rules).

OMB is vetting the paperwork-collection requirements to make sure they do not run afoul of Congress's Paperwork Reduction Act mandate to keep bureaucratic tree-killing to a minimum. NCTA has asked for changes in those requirements, which could delay that effective date even more.

The FCC, when it approved the rules back in December, said it expected the costs of compliance with new rules on transparency, blocking and unreasonable discrimination to be "small" since the principles are in line with current practice. NCTA says the open-ended rules mean costs and paperwork could be far greater, and wants the FCC to rethink its estimates so that OMB has a better idea of the burden, or amend its requirements.

The rules can't go into effect until 60 days after a notice is published in the Federal Register that OMB has approved the data-collection requirements. The FCC supplied NCTA with an explanation of the costs for complying with transparency rules, which is an addendum to its filing. The in-house cost was estimated at $734.97 per respondent per year, and provided insight into how much the FCC pays for tech writers, engineers and attorneys.

"The Commission believes that the respondents will use 'in-house' personnel whose pay is comparable to mid- to senior-level federal employees (GS12/5, GS14/5, and GS15/5, plus 30% overhead)," the FCC said. "[T]herefore, the Commission estimates respondents' hourly costs to be about $52.86 for technical writers, $74.27 for engineers, and $87.37 for attorneys to gather and post commercial terms, network management practices, and performance characteristics on a website and make that information available at the point of sale."

The FCC also anticipates five complaints per year, total, industry-wide, at a total cost of $40,000 for the parties.

"Notwithstanding the Commission's statement that it intended for "the costs of compliance with our prophylactic rules to be small," said NCTA in its filing, "the broad and open-ended transparency rules and complaint procedures actually adopted in the Open Internet Order could impose a much greater burden on ISPs than contemplated. Absent clear guidance as to what providers must disclose, as well as some limitation on the scope of the complaint procedures and the availability of discovery, the estimates provided by the Commission are unrealistic. NCTA encourages the Commission to clarify the rules and/or amend its burden estimates before submitting these estimates to OMB for approval."

In a talk at the American Cable Association Wednesday, House Communications Subcommittee Chairman Greg Walden (R-Ore.) said the Senate would not be able to act on his resolution to block those network neutrality rules (it has passed the House) until the FCC gets on with publishing the rules in the register.