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                                                      Calendar No. 698
114th Congress     }                                    {       Report
                                 SENATE
 2d Session        }                                    {     114-401
_______________________________________________________________________








            SMALL BUSINESS BROADBAND DEPLOYMENT ACT OF 2015

                               __________

                              R E P O R T

                                 of the

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                   on

                                S. 2283

                             together with

                            ADDITIONAL VIEWS


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                December 9, 2016.--Ordered to be printed
                                   ______

                         U.S. GOVERNMENT PUBLISHING OFFICE 

69-010                         WASHINGTON : 2016                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                    one hundred fourteenth congress
                             second session

                   JOHN THUNE, South Dakota, Chairman
 ROGER F. WICKER, Mississippi         BILL NELSON, Florida
 ROY BLUNT, Missouri                  MARIA CANTWELL, Washington
 MARCO RUBIO, Florida                 CLAIRE McCASKILL, Missouri
 KELLY AYOTTE, New Hampshire          AMY KLOBUCHAR, Minnesota
 TED CRUZ, Texas                      RICHARD BLUMENTHAL, Connecticut
 DEB FISCHER, Nebraska                BRIAN SCHATZ, Hawaii
 JERRY MORAN, Kansas                  ED MARKEY, Massachusetts
 DAN SULLIVAN, Alaska                 CORY BOOKER, New Jersey
 RON JOHNSON, Wisconsin               TOM UDALL, New Mexico
 DEAN HELLER, Nevada                  JOE MANCHIN, West Virginia
 CORY GARDNER, Colorado               GARY PETERS, Michigan
 STEVE DAINES, Montana
                       Nick Rossi, Staff Director
                 Adrian Arnakis, Deputy Staff Director
                    Jason Van Beek, General Counsel
                 Kim Lipsky, Democratic Staff Director
           Christopher Day, Democratic Deputy Staff Director
                 Clint Odom, Democratic General Counsel
















                                                      Calendar No. 698
114th Congress     }                                    {       Report
                                 SENATE
 2d Session        }                                    {     114-401

======================================================================



 
            SMALL BUSINESS BROADBAND DEPLOYMENT ACT OF 2015

                                _______
                                

                December 9, 2016.--Ordered to be printed

                                _______
                                

Mr. Thune, from the Committee on Commerce, Science, and Transportation, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 2283]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the bill (S. 2283) to ensure that small 
business providers of broadband Internet access service can 
devote resources to broadband deployment rather than compliance 
with cumbersome regulatory requirements, having considered the 
same, reports favorably thereon with an amendment (in the 
nature of a substitute) and recommends that the bill (as 
amended) do pass.

                          Purpose of the Bill

    The purpose of S. 2283, as amended, is to extend by at 
least 3 years the exemption for small businesses from the 
enhanced transparency rules of the Federal Communications 
Commission (FCC or Commission) under section 8.3 of title 47, 
Code of Federal Regulations. For purposes of the bill, a small 
business would be defined as any broadband Internet access 
service provider that has 250,000 or fewer broadband 
subscribers. The bill also would direct the FCC to submit a 
report to Congress not later than 6 months after the date of 
enactment that includes the Commission's recommendations 
regarding whether the bill's small business exemption should be 
made permanent and whether the definition of small business 
should be modified for the purposes of a permanent exemption.

                          Background and Needs

    As part of the FCC's Protecting and Promoting the Open 
Internet Order (30 FCC Rcd 5601 (2015)), the Commission adopted 
enhancements to its preexisting broadband transparency rule. 
The enhanced requirements include disclosure of: commercial 
terms for prices, other fees, and data cap allowances; 
performance characteristics, including packet loss, performance 
by geographic area, and average performance over a reasonable 
time and during peak usage; and network practices, including 
those applied to traffic associated with a particular user or 
group (including any application-agnostic degradation of 
service to a particular end user), the purpose of user-based or 
application-based practices, which users or data plans may be 
affected, the triggers that activate the use of the practice, 
the types of traffic that are subject to the practice, and the 
practice's likely effects on the end users' experience.
    In response to concerns from smaller providers about the 
burdens of complying with these enhanced transparency 
requirements, the Commission has adopted and renewed a 
temporary exemption from those requirements for providers with 
100,000 or fewer broadband subscribers. On December 15, 2015, 
the FCC's Consumer and Governmental Affairs Bureau adopted and 
released an order to extend the smaller broadband provider 
exemption until December 15, 2016.
    The text of S. 2283 as introduced would have permanently 
exempted from the FCC's enhanced transparency rules those 
broadband Internet access service providers with 500,000 or 
fewer subscribers or with 1,500 or fewer employees. At the 
markup, the Committee considered a substitute amendment, 
offered by Senators Daines and Manchin, to replace the 
permanent exemption with a 5 year extension and to further 
limit the exemption to those providers with 250,000 or fewer 
subscribers. Additionally, the substitute amendment included a 
provision to direct the FCC to report to Congress whether the 
exception should be made permanent and whether the qualifying 
subscriber threshold should be modified for purposes of a 
permanent exception. The language in the substitute amendment 
was substantially similar to H.R. 4596, the Small Business 
Broadband Deployment Act, which was passed unanimously by the 
House of Representatives on March 16, 2016, and referred to the 
Committee on Commerce, Science, and Transportation of the 
Senate on March 17, 2016.
    Senator Cantwell offered an amendment to the substitute, as 
further modified, to include a requirement that the FCC begin a 
rulemaking to implement the recommendations in the report 
required by the substitute amendment. The amendment also 
included a provision to replace the substitute's 5-year 
extension with a sunset that would extend the exception for the 
later of 3 years following the bill's enactment or the date on 
which the Commission adopts rules in the rulemaking required to 
be commenced by the amendment.

                          Legislative History

    On November 16, 2015, Senators Daines and Risch introduced 
S. 2283. Senators Gardner, Roberts, Sullivan, and Crapo 
subsequently cosponsored the bill.
     On March 2, 2016, the Committee held a hearing on 
``Oversight of the Federal Communications Commission'' at which 
all five FCC commissioners testified. During this hearing, 
Senator Daines asked whether a permanent small business 
exemption was appropriate. Commissioners Pai and O'Rielly 
agreed that the enhanced transparency rules disproportionately 
impact small businesses and that a permanent exemption is 
warranted. At the same hearing, Commissioner Rosenworcel 
indicated her belief that the FCC should consider a longer, and 
potentially permanent, exemption than the 1-year exemption 
currently provided by the FCC.
     On March 17, 2016, H.R. 4596, the House companion bill to 
S. 2283, was referred to the Committee.
     On June 15, 2016, the Committee held an Executive Session 
during which S. 2283 was considered. The bill was reported 
favorably, as amended by Senators Daines, Manchin, and 
Cantwell, with an amendment (in the nature of a substitute).

                            Estimated Costs

    In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:

S. 2283--Small Business Broadband Deployment Act of 2016

    S. 2283 would modify disclosure requirements enforced by 
the Federal Communications Commission (FCC) to exempt certain 
broadband providers from requirements to give consumers 
information about the performance and cost of their services. 
CBO estimates that implementing S. 2283 would have no 
significant effect on the federal budget.
    Under the FCC's current rules, broadband providers with 
100,000 or fewer subscribers are exempt from those reporting 
requirements until December 16, 2016, at which time the 
Commission plans to adopt final regulations to implement those 
requirements. S. 2283 would expand the exemption to include 
broadband providers with 250,000 or fewer subscribers for up to 
three years after the date of enactment. The bill also would 
direct the FCC to submit a report with recommendations to the 
Congress on this exemption policy within six months of 
enactment and to conduct a rulemaking to implement the 
recommendations of the report.
    On the basis of information from the FCC, CBO estimates 
that the rulemaking activities needed to implement the 
provisions of S. 2283 would have no significant effect on the 
agency's costs relative to current policies. Moreover, under 
current law, the FCC is authorized to collect fees sufficient 
to offset the cost of its regulatory activities each year. 
Therefore, CBO estimates that the net cost to implement S. 2283 
would be negligible, assuming annual appropriation actions 
consistent with the agency's authorities. Because enacting S. 
2283 would not affect direct spending or revenues, pay-as-you-
go procedures do not apply.
    CBO estimates that enacting S. 2283 would not increase net 
direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2027.
    S. 2283 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    On March 4, 2016, CBO transmitted a cost estimated for H.R. 
4596, the Small Business Broadband Deployment Act, as ordered 
reported by the House Committee on Energy and Commerce on 
February 25, 2016. The provisions in that act are similar to S. 
2283 and CBO's estimates of the costs are the same.
    The CBO staff contact for this estimate is Stephen Rabent. 
The estimate was approved by H. Samuel Papenfuss, Deputy 
Assistant Director for Budget Analysis.

                           Regulatory Impact

    In accordance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following evaluation of the regulatory impact of the 
legislation, as reported:

                       number of persons covered

    The number of persons covered by this legislation should be 
consistent with current levels.

                            economic impact

    S. 2283, as reported, would exempt for at least 3 years 
broadband providers with 250,000 or fewer subscribers from the 
FCC's enhanced transparency rules under section 8.3 of title 
47, Code of Federal Regulations. Implementation of the 
legislation would relieve small businesses of burdensome 
regulation. S. 2283 is not expected to negatively impact on the 
Nation's economy. To the contrary, economic benefits should 
follow from implementation of the legislation. For at least 3 
years, small broadband Internet access providers would be able 
to avoid the costs associated with compliance with these 
regulatory requirements.

                                privacy

    The reported bill is not expected to have an adverse effect 
on the personal privacy of any individuals.

                               paperwork

    The Committee does not anticipate an increased paperwork 
burden on regulated entities as a result of this legislation. 
To the contrary, the Committee expects entities that qualify 
for the bill's exemption to face fewer paperwork requirements 
than they would in the absence of such exemption.

                   Congressionally Directed Spending

    In compliance with paragraph 4(b) of rule XLIV of the 
Standing Rules of the Senate, the Committee provides that no 
provisions contained in the bill, as reported, meet the 
definition of congressionally directed spending items under the 
rule.

                      Section-by-Section Analysis


Section 1. Short title.

    This section would provide that the Act may be cited as the 
``Small Business Broadband Deployment Act of 2016''.

Section 2. Small business exemption.

    Subsection (a) of this section would define ``appropriate 
congressional committees'' to mean the Committee on Commerce, 
Science, and Transportation of the Senate and the Committee on 
Energy and Commerce of the House of Representatives; 
``broadband Internet access service'' to have the meaning given 
the term in section 8.2 of title 47, Code of Federal 
Regulations; ``Commission'' to mean the Federal Communications 
Commission; and, ``small business'' to mean any provider of 
broadband Internet access service that has not more than 
250,000 subscribers.
     Subsection (b) of this section would provide that the 
FCC's enhanced transparency rules under section 8.3 of title 
47, Code of Federal Regulations, shall not apply to any small 
business.
     Subsection (c) of this section would require the FCC, not 
later than 180 days after the bill's date of enactment, to 
submit to Congress a report that contains recommendations 
regarding whether the bill's exception should be made permanent 
and whether the definition of small business should be modified 
for such an exception.
     Subsection (d) of this section would require the 
Commission, not later than 180 days after submitting the report 
required by subsection (c), to begin a rulemaking to implement 
the recommendations in such report. Should the Commission adopt 
rules as a result of the proceeding required to be commenced 
under this subsection, the Committee expects that any such 
adoption be by a vote of the Commission.
     Subsection (e) of this section would provide that the 
exception provided under subsection (b) shall end after the 
later of the date that is three years after the date of the 
bill's enactment or the date on which the FCC adopts rules in 
the proceeding required to be commenced under subsection (d). 
Because the bill does not require the Commission to adopt rules 
under the proceeding required to be commenced under subsection 
(d), the sunset provided in subsection (e) would permit the 
exception under subsection (b) to continue indefinitely if the 
Commission does not adopt rules under the proceeding required 
to be commenced under subsection (d).S6602

                   Additional Views of Senator Nelson

    I continue to have concerns about S. 2283, the Small 
Business Broadband Deployment Act of 2016, even after the 
amendments adopted by the Committee at markup. The legislation 
would upset a carefully crafted balance in the Federal 
Communications Commission's (FCC's) Open Internet Order. That 
Order recognized that all subscribers, irrespective of the size 
of their broadband providers, should know fundamental and 
necessary information about the cost and quality of their 
broadband service. At the same time, the FCC also decided, out 
of an abundance of caution, to provide additional time for 
small broadband providers--those with 100,000 or less 
subscribers--to come into compliance with the enhanced consumer 
transparency rules.
    By expanding the definition of who is a small broadband 
provider, this legislation would mean that approximately three 
million consumers, who currently receive these enhanced 
disclosures about their broadband service, will suddenly lose 
access to important information about how their broadband 
provider operates its network. This legislation also puts into 
place a path to making this exemption permanent. While I 
understand the desire by some to take that step, we do not know 
what the future may hold. Rather, the current process whereby 
the FCC reviews whether there is a continuing need for the 
small broadband provider exemption on a periodic basis is a 
better, more targeted approach. It allows the FCC to calibrate 
application of the exemption, and makes sure that there is not 
a permanent class of broadband subscribers created (more than 9 
million, if the bill's expanded definition of small business is 
adopted) whose members never benefit from the enhanced 
disclosures required by the FCC. This legislation would serve 
to keep those millions of consumers largely in the dark about 
the fees associated with their service, along with how their 
monthly broadband usage can affect their rates.

                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee states that the 
bill as reported would make no change to existing law.

                                  [all]