Senior Vice President, C_TEC, U.S. Chamber of Commerce
December 05, 2017
If you’re reading this, you’ve been able to connect to the internet and chances are it’s working the same today as it was yesterday. Why is this important? Today is the day that Federal Communications Commission Chairman (FCC) Ajit Pai’s Restoring Internet Freedom went into effect eliminating the outdated common carrier regulations of the Internet established by the 2015 Obama-era Open Internet Order.
A great deal of misinformation is circulating regarding Pai’s plan. And this in turn is fueling many of the incendiary attacks against the chairman. Rather than stoop to the level of the political extremists, it is important to look at the details of the FCC’s current proposal. Fortunately in the interest of transparency, Chairman Pai released a draft of his Restoring Internet Freedom Order three weeks before the commission’s December 14 vote. (This starkly contrasts with the previous administration which waited weeks after a vote to release its 2015 Open Internet Order.)
First, it is important to provide some general context to the rules being repealed by the current plan. In 2015, the FCC issued the Open Internet Order and established bright line neutrality rules designed to prevent Internet Service Providers (ISPs) from blocking or throttling (slowing) consumers’ access to certain edge providers. Additionally, the rules banned paid prioritization, which is the practice of ISPs entering into contractual arrangements to give certain edge providers favorable transmission speeds. Edge providers are entities like websites, streaming video services, and other online applications. The 2015 order also imposed a vague General Conduct Standard on broadband providers. In order to give itself the legal authority to impose all of these rules, the FCC classified broadband providers as common carriers under the 1934 rotary-phone era Communications Act, effectively treating them like a public utility.
Many activists now claim that the FCC’s proposal to roll back bright-line net neutrality rules and the public utility treatment of broadband will transport the internet back in time to an era like the Wild West or Dark Ages. While it is true that the regulatory framework governing broadband service will look like something of the past, the commission is merely returning online regulation back to what it was in 2015 — a time when the internet thrived.
This piece examines some of the myths and facts about returning to a pre-public utility internet, explains that consumers will still be able to access the internet in the foreseeable future as they know it, and shows why Chairman Pai’s efforts do not merit the threatening rhetoric.
Myth: Consumers will be without any legal protections
While it is true that Chairman Pai’s plan eliminates the Title II classification of broadband and bright-line net neutrality rules, the plan also imposes a transparency requirement on IPSs. This transparency requirement in Pai’s plan mandates that broadband providers disclose, among other things, whether they engage in blocking, throttling, or paid prioritization.
With this knowledge consumers can choose to switch to a competing ISP or seek redress with federal regulators like the Federal Trade Commission, which has the authority to take enforcement action against anticompetitive, unfair, or deceptive trade practices on a case-by-case basis. The legal authority for the FTC to take action against such behavior is rooted in laws like the Sherman Antitrust Act and Section 5 of the FTC Act barring unfair and deceptive trade practices. Most of the alleged incidents of blocking or throttling — although relatively rare — that spurred the net neutrality debate in the first place could have been regulated under these frameworks.
Myth: The benefits of the FCC’s plan to end Title II are outweighed by the costs
Critics of the plan to end the public-utility treatment of broadband maintain that consumers will be harmed and will now pay more to access content. If the history of the pre-2015 internet is any guide, these fears are premature. Some activists have erroneously pointed out that eliminating the current net neutrality regulations will make our internet service look like Portugal, and that consumers will have to pay a la carte to view certain websites. To the contrary, Portugal has net neutrality protections under European Union regulation and the example they use of paying additional fees to access certain websites in Portugal is misleading because these additional fees are meant to save consumers money who are using data exceeding their general data caps.
Additionally, under the General Conduct Rule authorized by the Title II regulatory framework imposed by the previous FCC, similar benefits to consumers would have been outlawed. In January before the change in administrations, the commission stated that under its Title II authority, some free data plans could be illegal. Such plans, which are highly popular, allow consumers to view sponsored content like streaming versions of their cable or satellite television service without being charged for data. Consumers are still able to access other lawful content and are merely incentivized to use a particular service.
Another cost of the Title II designation of broadband is investment in broadband networks. Regulatory uncertainty generally leads to a decrease in capital investment. Broadband investment, according to studies, decreased after the adoption of Title II in both 2015 and 2016 — the first time any such drop has occurred outside of a national recession. Title II, and not net neutrality, has created regulatory uncertainty and threatened investment. What this means is that broadband firms are spending less to boost internet speeds and connect rural and tribal Americans to the Internet.
Myth: Congress is powerless to intervene
While it is true that Congress cannot prevent the commission from voting to adopt the Restoring Internet Freedom Order, Congress can pass legislation that imposes bright-line net neutrality rules without treating the internet like a public utility. This would encourage certainty in the marketplace while limiting regulatory burdens and ensuring consumer protection.
Even though Congress can act to permanently codify net neutrality principles, in the meantime the current regulatory regimes in place, public commitments by ISPs not to block or throttle, industry competition, and the transparency requirement put in place by the FCC should be able to prevent egregious net neutrality violations. While net neutrality advocates and most Americans are in general agreement that ISPs should not block or throttle lawful content, the baggage associated with Title II public-utility treatment of broadband providers does not justify the costs it imposed on consumers and the Internet ecosystem.
Internet users and consumers can rest assured that a free and open internet, through which they can engage in civil discourse, will continue to exist for the foreseeable future.