Republicans in Congress are advancing a bill that could strip the Federal Communications Commission of authority to protect consumers from unreasonable broadband prices. Democrats and consumer advocates warn that the bill could help Internet service providers overcharge customers and impose unfair data caps.

When the FCC reclassified broadband as a common carrier service in order to impose net neutrality rules, the commission declined to impose traditional rate regulation in which telecommunications providers would have to seek permission before raising prices. But the reclassification allows customers to complain about prices, with the FCC judging on a case-by-case basis whether a price or pricing practice is "unjust" or "unreasonable."

Republicans led a hearing today on a few bills, including the "No Rate Regulation of Broadband Internet Access Act," which would do exactly what its title says by forbidding the FCC from regulating rates charged for Internet service. Republicans have said they're simply trying to put into law a promise made by President Obama and FCC Chairman Wheeler that the commission won't require ISPs to face the rate-of-return regulation traditionally applied to telephone service. Passing a law would prevent future FCC chairpersons from using a different strategy.

But in today's hearing, US Rep. Greg Walden (R-Ore.) made it clear that he wants to go further than that by forbidding the FCC from acting on customer complaints that broadband bills are too high.

"Rate regulation by after-the-fact second-guessing is rate regulation nonetheless," Walden said. "We should assure that the specter of rate regulation of broadband is off the table permanently." Walden is chairman of the House Energy & Commerce Committee's subcommittee on communications and technology.

A background memo from committee majority staff also confirms that Republicans want to stop what they call "after-the-fact ratemaking."

Currently, "the FCC can engage in after-the-fact ratemaking by using enforcement decisions to define the contours of what the FCC deems a 'reasonable' rate," the memo said. The bill "would prohibit the FCC from regulating the rates charged for broadband Internet access service, whether directly through tariffing or indirectly through enforcement actions."

Bill's broad language is trouble, opponents say

Democrats and consumer advocates are trying to prevent the bill from passing. US Rep. Anna Eshoo (D-Calif.), the ranking Democrat on the subcommittee, said she's not in favor of "regulating the monthly recurring rate consumers pay for broadband Internet access."

But Eshoo said that "the commission has an important role to play in consumer protection, which includes the billing practices of the nation's broadband providers." Congress should make sure the legislation has no unintended consequences, she said. Stripping the FCC of authority could help ISPs implement data caps in a discriminatory fashion or adopt future harmful practices that can't be foreseen today, she said.

While the FCC's net neutrality order doesn't ban data caps, the commission reserves the right to decide case-by-case whether a cap prevents consumers from using Internet services or prevents content providers from reaching consumers.

The phrase "rate regulation" is generally used to describe traditional rate-of-return regulation, which the FCC is not imposing on broadband providers, said Harold Feld, an attorney and senior VP of advocacy group Public Knowledge. But the broad language of the No Rate Regulation bill "would permit broadband providers to raise arguments against uncontroversial enforcement of traditional consumer protections, such as fraudulent billing practices," Feld said.

Feld also worries that the bill could prevent investigations into data caps.

Many customers "have complained that Comcast has consistently provided them with inaccurate information about their data consumption, billing them for broadband data they did not use," Feld said. "Would FCC investigation into these complaints count as 'rate regulation' prohibited by the statute?"

Comcast CEO Brian Roberts recently said consumers should be charged for Internet data the same way they're charged for electricity—"the more bits you use, the more bits you pay," he said. But Comcast doesn't want its prices regulated by government the way electric prices are.

The bill's broad language—which "gives no limit to what is meant by 'regulate the rates'"—could also prevent the FCC from taking complaints about interconnection prices ISPs charge video providers and other companies, according to Feld. The threat of complaints has forced ISPs to settle disputes with other network operators, improving Internet quality for customers.

"Such sweeping language may interfere with the FCC’s efforts to reform the Universal Service Fund to bring broadband to rural America and to those who cannot afford broadband," Feld added.

The subcommittee also heard from the Wireless Internet Service Providers Association (WISPA), a group of small ISPs that supports the Republican-sponsored bill.

"Under Title II [of the Communications Act], our charges must be 'just and reasonable, and any party can take us to court if they think that we are violating this standard. This is a very scary proposition for small businesses, who simply will not be able to afford to go through the process of defending frivolous complaints or participating in a lengthy judicial process to adjudicate what is 'reasonable,'" WISPA Legislative Committee Chair Elizabeth Bowles said.

Exemption for small ISPs

The subcommittee also discussed whether Congress should permanently exempt small Internet providers from new transparency requirements in the FCC's net neutrality order. The rules require ISPs to notify customers if a network management practice is likely to degrade service and to disclose information about "promotional rates, all fees and/or surcharges, and all data caps or data allowances."

The FCC hasn't yet decided whether all the disclosure requirements should apply to small businesses, and it has granted a temporary exemption that lasts until at least December 15, 2016. The proposed legislation would permanently exempt small providers and expand the exemption to larger providers than the FCC envisioned. While the FCC defined small providers as those with 100,000 or fewer subscribers, the Republican-sponsored bill would expand the definition to include any provider with fewer than 1,500 employees or 500,000 subscribers.

Republican leadership said the bill is necessary to "provid[e] certainty and regulatory relief to small providers who lack the resources to comply with the enhanced disclosure requirements."

Feld argued that this could harm customers who live in areas where there are only small providers. "Rural broadband subscribers and rural enterprise customers are no less in need of protection from fraud or fly-by-night providers than urban subscribers or urban enterprise customers," he said.

While broadband providers' friends in Congress fight the FCC on their behalf, the broadband companies themselves are suing the FCC to overturn the net neutrality order.