The evidence for repealing net neutrality rules isn't good enough, Senator Edward Markey (D-Mass.) told Federal Communications Commission Chairman Ajit Pai yesterday.

Pai claims that the rules issued in 2015 are reducing investment in broadband networks, but Markey pointed out during a Senate hearing that ISPs have not reported any dramatic problems to their investors.

Markey said:

Publicly traded companies are required by law to provide investors accurate financial information, including reporting any risks or financial burdens. However, I have found no publicly traded ISP that has reported to its investors by law that Title II has negatively impacted investment in their networks. Many, in fact, have increased deployment and investment.

(Title II of the Communications Act authorizes the FCC to regulate common carriers and was used by the FCC to impose net neutrality rules.)

Markey's point is one that we've made before. ISPs are quick to tell the FCC and the public that Title II is harming network investment, but they have presented a much rosier view when talking to investors. Publicly traded companies are required to give investors accurate financial information, including a description of risk factors involved in investing in the company.

Senator vs. chairman

Yesterday, Pai appeared in front of the Senate Commerce Committee, which is considering President Trump's nomination of Pai for another five-year term on the FCC. The Senate is also considering the nominations of Republican Brendan Carr and Democrat Jessica Rosenworcel.

Markey asked Pai what problem he is trying to fix by repealing net neutrality rules. Pai responded, "One of the concerns we have raised is these regulations might be dampening infrastructure investment."

"They might be, but there's no evidence of it," Markey fired back.

Pai continued, saying, "There has been evidence raised, and that is part of the reason why we are testing this proposition... we wanted to test this proposition in an open and public process."

The "testing" comes in the form of the Notice of Proposed Rulemaking (NPRM) in which the FCC proposes overturning the Title II classification of ISPs and asks the public for comment.

"In the NPRM we cited some evidence that, among the top 12 ISPs in terms of size, that investment was down," Pai said. "Also, a number of smaller providers, including municipal broadband providers, fixed wireless providers, small cable companies, and others submitted evidence."

The FCC wants to make sure that it has the facts correct and is open to evaluating different evidence, Pai said. "We want to hear that perspective as well that you just outlined," he told Markey.

"This is part of the reason we have a notice and comment process as opposed to simply an administrative decree that we find these rules are in fact harming [investment] and we're going to get rid of them immediately," Pai also said.

Pai is convinced that investment is down

But prior to yesterday, Pai seemed to have made up his mind that broadband investment is declining. He has said so in speeches, and the NPRM states it as a fact. "The Commission’s Title II Order has put at risk online investment and innovation, threatening the very open Internet it purported to preserve," the document says. "Investment in broadband networks declined. Internet service providers have pulled back on plans to deploy new and upgraded infrastructure and services to consumers."

Overturning the net neutrality rules will "reverse the decline in infrastructure investment," the NPRM also said, while asking the public for comments on the FCC's proposal and analysis.

Markey was not convinced by Pai's argument. The senator said that nearly half of US venture capital funds went to Internet-specific and software companies last year, and he referred to US Census figures that show rising investments by ISPs in 2015 (a point Markey also made in another hearing in March).

"We've hit a sweet spot" in investment and job creation, Markey said. "These net neutrality protections are a problem that doesn't need any fixing. The system is working."

Markey also said:

I feel that the evidence [to repeal the rules] right now is not there and if it was, the broadband companies themselves would have in fact been providing that evidence to their investors in their filings, and they have not done so. Anecdotal evidence is not evidence. There is no factual basis for that change [proposed by the FCC].

Two appointments to fill up the FCC

The FCC currently has three members: two Republicans (including Pai) and one Democrat. The Senate will likely approve the nominations of Carr and Rosenworcel, giving Republicans a 3-2 majority.

Rosenworcel is coming back for a second term as commissioner after an absence of a few months.

Carr served as Pai's Wireless, Public Safety, and International Legal Advisor for three years. After Trump elevated Pai to the chairmanship in January, Pai appointed Carr to become the FCC's general counsel. Carr could provide a third vote in favor of repealing net neutrality rules.

Sen. Bill Nelson (D-Fla.) challenged Carr to name any incident in which he has disagreed with Pai.

"It's necessary that this committee raise this question of independence," Nelson said. "How independent can you be of Chairman Pai? Can you name for the committee a time at which you substantively disagreed with Chairman Pai on an FCC matter or proceeding?"

Carr did not name any specific disagreements he's had with Pai, but said that Pai did not always take his advice.

"When I had a chance to work for the commissioner, I gave him my best candid advice," Carr said. "Sometimes he took it, sometimes he didn't take it. What I can commit to you, going forward, is I'll make my own decisions. I'll call it the way I see it based on the facts, the record, and what I think serves the public interest, independent of where other people come out."

Nelson said that Carr's response "is not confidence-building for those of us who are wondering about your future independence from the boss." Nelson said it is "hard to recall a similar situation where someone was nominated to serve at the FCC alongside... their current boss." Typically, an FCC staffer doesn't become a commissioner until after the commissioner they work for has left, he said.

Nelson also said the Senate should not confirm Carr for two consecutive terms—the White House apparently requested confirmation for two five-year terms instead of the usual one.

Carr did make one statement later in the hearing that was slightly different from a position Pai has taken. Carr was asked by Sen. Brian Schatz (D-Hawaii) about how much attention the FCC should give to the number of public comments on Pai's plan to eliminate net neutrality rules.

"I think it's very important," Carr responded. "I think it shows the level of interest and passion in this issue, and that's something we need to be taking into account."

That's a bit different from what Pai has said on the matter. After a protest brought two million new pro-net neutrality comments into the FCC last week, Pai said, "the raw number is not as important as the substantive comments that are in the record."