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Few who follow the Federal Communications Commission (FCC) and the history of its efforts to enshrine network neutrality rules into law were surprised yesterday when Chairman Ajit Pai announced that he would make public a proposal to deregulate broadband Internet access by “reclassifying” it as an information service under the Communications Act of 1934.
But many expected the Chairman to at least propose retaining some of the rules that protect consumers and competition online, like a prohibition against broadband providers blocking or throttling online content and services. After all, since 2002 FCC chairs of both parties believed that at a minimum, FCC policy should ensure that consumers are able to access the content, applications, and services of their choosing without interference by gatekeeping broadband providers.
Not Pai. In doing away with the 2015 rules that prohibit broadband providers from discriminating against or favoring certain content, applications and services (that is, no blocking, no throttling, no fast lanes and a general rule against discrimination), Pai has radically departed from bipartisan FCC precedent. This opens the door for companies like Comcast, AT&T, Verizon, and Charter to pick winners and losers on the Internet by controlling which online companies get faster and better quality of service and at what price.
Sounds bad, right? Believe it or not, the proposed order is worse than that.
The proposed order would leave broadband providers largely if not completely free of oversight
While there’s a lot of focus on repeal of the rules, even more damaging is the proposal to reverse the FCC’s decision under Tom Wheeler to classify broadband Internet access as an essential “telecommunications service” subject to Title II of the Communications Act. Without such a ruling, the 2015 rules would not have been possible in the first place.
Reversing that classification would do more than invalidate the rules. It would also remove the FCC’s ability to protect consumers and competition in the broadband market. Among other things, Title II gives the FCC the legal power to protect consumers from fraudulent billing, price gouging, anticompetitive behavior, data breaches, and other practices that violate users’ privacy.
Chairman Pai’s answer is that the Federal Trade Commission (FTC) “will once again be able to police ISPs, protect consumers, and promote competition, just as it did before 2015.” What he doesn’t say is that the FTC, unlike the FCC, doesn’t have the power to make rules that protect consumers and innovators before they are harmed. Nor does he say that the FTC’s authority wouldn’t prohibit fast lanes, blocking or throttling so long as the broadband provider tells you it’s engaging in those practices.
Finally, there’s nothing the FTC can do if one day your broadband provider decides to double its prices. As FTC Commissioner Terrell McSweeny testified earlier this month: “[i]t is wrong to assume that a framework that relies solely on backward-looking consumer protection and antitrust enforcement can provide the same assurances to innovators and consumers as the forward-looking rules contained in the FCC’s Open Internet Order.”
Moreover, it’s unclear whether the FTC will be able to police some broadband providers at all. Still pending in the 9th Circuit Court of Appeals is a case that holds that if a broadband provider also provides a service regulated under Title II (for example, landline and mobile phone service), then the FTC has no legal authority to oversee its practices. Should that case stand, broadband providers, nearly all which provide some Title II services, would be entirely free of oversight from both the FCC and FTC.
The proposed order would prohibit states and localities from protecting their citizens
Not content to repeal the pro-consumer net neutrality rules and neuter his agency, Pai is also proposing to prohibit states and localities from adopting their own broadband consumer protection laws, including laws that protect consumer privacy.
In some circumstances, a federal agency like the FCC can “preempt” state and local laws and rules when they are inconsistent with federal laws and rules. Comcast and Verizon asked for this preemption after Congress repealed the FCC’s strong broadband privacy rules and some 16 states introduced laws that would protect users’ privacy. As usual, Pai gave these powerful companies exactly what they asked for.
The hypocrisy is staggering. When the FCC in 2015 voted to help consumers by pre-empting the laws of two states that prohibit communities from expanding and building their own broadband networks, Pai dissented vociferously. In this case, where the FCC is removing pro-consumer protections, Pai is delighted to preempt the states from ensuring that their citizens are protected from anti-consumer and anti-competitive practices of broadband companies. The result? Broadband providers win and you lose.
What’s next?
Pai’s proposed order is now “circulating” among the other four Commissioners, some of whom may offer edits to the document. For the next two weeks, the FCC will take public comment on the proposal and then one week before the FCC’s December 14 meeting, it will go into its “Sunshine” period, in which comment from the public is prohibited.
Pai made clear that he doesn’t value public comments, so the best thing for you to do is to contact your representatives in Congress. Now. Just yesterday, some 175,000 calls opposing the proposal went to members of Congress. The goal is to get Republicans to urge Pai not to proceed once they recognize that repeal of the net neutrality rules, like repeal of the broadband privacy rules before it, is extremely unpopular and will hurt them at the ballot box in 2018.
If that doesn’t happen, the FCC will vote on Pai’s proposed order on December 14, where it is expected to pass. After that, get ready for a bunch of lawsuits and at least an 18-month to two-year wait for a court to decide the fate of the rules and the FCC’s ability to protect consumers and competition.
Gigi Sohn is a Fellow with Georgetown Law’s Institute for Technology Law & Policy, the Open Society Foundations and Mozilla. She served as Counselor to former FCC Chairman Tom Wheeler from November 2013-December 2016.
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