FCC Votes to Reverse Net Neutrality & No Longer Regulate Broadband Internet Services

 Overview:

By a 3 to 2 vote along party lines, the Federal Communications Commission (FCC) voted on Thursday to dismantle landmark rules regulating the businesses that connect consumers to the internet, granting broadband ISPs the power to potentially reshape Americans’ online experiences.  The agency scrapped the so-called net neutrality regulations that prohibited broadband providers from blocking websites or charging for higher-quality service or certain content. The federal government will also no longer regulate high-speed internet delivery as if it were a utility, like phone service.  The upshot is that the “Restoring Internet Freedom” order passed today, removes the FCC as a regulator of the broadband industry and relegates rules that prevented blocking and throttling content to the honor system.

That means a consumer or business is helpless if they have a complaint against an ISP or broadband service provider although there’s lip service saying that “the FCC and FTC will securely share consumer complaints pertaining to the subject matter of the Internet Freedom Order’s requirements to the extent feasible…….”  FTC enforcement action is mentioned, but from our experience the FTC does nothing when it receives a complaint!  They don’t even contact the business you’re complaining about (like the BBB does).

From the FCC’s Memorandum of Understanding (bold font added– see other FCC.gov references below):

(1) Pursuant to the FCC’s authority under the Communications Act of 1934, as amended, on December 14, 2017, the FCC adopted a Declaratory Ruling, Report and Order, and Order in the proceeding Restoring Internet Freedom, WC Docket No. 17-108, Declaratory Ruling, Report and Order, Order, FCC 17-166 (Dec. 14, 2017) (“Internet Freedom Order”), which, in principal part, restores broadband Internet access service to its Title I information service classification,reinstates the private mobile service classification of mobile broadband Internet access service, and returns to the Transparency Rule the FCC adopted in 2010 with certain limited modifications to promote additional transparency. As authority for the Transparency Rule, the FCC relies on Section 257 of the Communications Act, among other provisions, which requires the FCC to identify and eliminate market entry barriers for entrepreneurs and other small businesses in the provision and ownership of telecommunications services and information services and to report to Congress on how such marketplace barriers have been addressed by regulation or could be addressed by recommended statutory changes; and

(2) Congress has directed the FTC to, among other things, prevent unfair methods of competition and unfair or deceptive acts or practices in or affecting commerce under Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45, and has charged the FTC with enforcing a number of other specific rules and statutes.

Therefore, it is agreed that:

1. Consistent with its jurisdiction and to fulfill its duties under Section 257 of the Communications Act, among other provisions, the FCC will monitor the broadband market and identify market entry barriers by, among other activities, reviewing informal complaints filed by consumers, and will investigate and take enforcement action as appropriate with respect to failures by an Internet service provider to comply, in whole or in part, with the Internet Freedom Order’s requirements to file with the FCC or display on a publicly available, easily accessible website the specified subjects of disclosure.
2. Consistent with its jurisdiction, the FTC will investigate and take enforcement action as appropriate against Internet service providers for unfair, deceptive, or otherwise unlawful acts or practices, including but not limited to, actions pertaining to the accuracy of the disclosures such providers make pursuant to the Internet Freedom Order’s requirements, as well as their marketing, advertising, and promotional activities.
3. Consistent with each agency’s jurisdiction and to maximize the resources of each agency, at the regular coordination meeting established by the Agencies’ 2015 Memorandum of Understanding, the Agencies will discuss potential investigations against Internet Service Providers that could arise under each agency’s jurisdiction, and coordinate such activities to promote consistency in law enforcement and to prevent duplicate or conflicting actions, to the extent appropriate and consistent with law.
4. To further support coordination and cooperation on these matters, the Agencies will continue to work together to protect consumers, including through:
• Consultation on investigations or enforcement actions that implicate the jurisdiction of the other agency;
• Sharing of relevant investigative techniques and tools, intelligence, technical and legal expertise, and best practices in response to reasonable requests for such  assistance from either Agency; and
• Collaboration on consumer and industry outreach and education efforts, as appropriate.
5. The FCC and FTC will securely share consumer complaints pertaining to the subject matter of the Internet Freedom Order’s requirements to the extent feasible and subject to the Agencies’ requirements and policies governing, among other things, the protection of confidential, personally identifiable, or nonpublic information.
6. The Agencies may coordinate and cooperate to develop guidance to assist consumers’ understanding of Internet service provider practices.
7. In seeking to encourage and facilitate the enforcement of applicable law, the Agencies recognize that decisions by one agency to take or withhold action are not, except by operation of law, binding on or intended to restrict action by the other agency.
8. To ensure the effective exchange of information between the Agencies, the persons signing below and their successors shall be deemed Designated Liaison Officers to serve as the primary sources of contact for each agency. Formal meetings between appropriate senior officials of both Agencies to exchange views on matters of common interest and responsibility shall be held from time to time, as determined to be necessary by such liaison officers…..blah, blah, blah!

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Analysis:

The action reversed the agency’s 2015 decision, during the Obama administration, to better protect Americans as they have migrated to the internet for most communications. It will take a couple of weeks for the changes go into effect, but groups opposed to the action have already announced plans to sue the agency to restore the net neutrality regulations. Those suits could take many months to be resolved.

FCC chairman Ajit Pai said the rollback of the rules would eventually help consumers because broadband providers like AT&T and Comcast could offer people a wider variety of service options. We are helping consumers and promoting competition,” Mr. Pai said in a speech before the vote. “Broadband providers will have more incentive to build networks, especially to under-served areas.”   We think that’s disingenuous nonsense!

The discarding of net neutrality regulations is the most significant and controversial action by the F.C.C. under Mr. Pai. In his first 11 months as chairman, he has lifted media ownership limitseased caps on how much broadband providers can charge business customers and cut back on a low-income broadband program that was slated to be expanded to nationwide carriers.

His plan for the net neutrality rules, first outlined early this year, set off a flurry of opposition. Critics of the changes say that consumers may have more difficulty finding content online and that start-ups will have to pay to reach consumers. In the past week, there have been hundreds of protests across the country, and many websites have encouraged users to speak up against the repeal. After the vote, numerous groups said they planned to file a lawsuit challenging the change.

As expected, the five FCC commissioners were fiercely divided along party lines. In front of a room packed with reporters and television cameras from the major TV networks, the two Democratic commissioners warned of consumer harms to come from the changes.

Mignon Clyburn, one of the Democratic commissioners, presented two accordion folders full of letters in protest to the changes, and accused the three Republican commissioners of defying the wishes of millions of Americans.  “I dissent, because I am among the millions outraged,” said Ms. Clyburn. “Outraged, because the F.C.C. pulls its own teeth, abdicating responsibility to protect the nation’s broadband consumers.”

“I dissent from this rash decision to roll back net neutrality rules,” said FCC Commissioner Rosenworcel. “I dissent from the corrupt process that has brought us to this point. And I dissent from the contempt this agency has shown our citizens in pursuing this path today. This decision puts the Federal Communications Commission on the wrong side of history, the wrong side of the law, and the wrong side of the American public.”

On the other hand, Brendan Carr, a Republican FCC commissioner, said it was a “great day” and dismissed “apocalyptic” warnings. “I’m proud to end this two-year experiment with heavy-handed regulation,” Mr. Carr added.

During Mr. Pai’s speech before the vote, security guards entered the meeting room at the F.C.C. headquarters and told everyone to evacuate. Commissioners were ushered out a back door. The hearing restarted a short time later.  That shows you how unpopular the repeal of Internet Neutrality really is!

Despite all the uproar, it is unclear how much will change for internet users. The rules were essentially a protective measure, largely meant to prevent telecom companies from favoring some sites over others. And major telecom companies have promised consumers that their experiences online would not change.

Mr. Pai and his Republican colleagues have echoed the comments of telecom companies, who have told regulators that they weren’t expanding and upgrading their networks as quickly as they wanted to since the creation of the rules in 2015.

“There is a lot of misinformation that this is the ‘end of the world as we know it’ for the internet,” Comcast’s senior executive vice president, David Cohen, wrote in a blog post this week. “Our internet service is not going to change.”  We certainly hope so!

But with the F.C.C. making clear that it will no longer oversee the behavior of broadband providers, telecom experts say, the companies could feel freer to come up with new offerings, such as faster tiers of service for business partners such as HBO’s streaming service or Fox News. Such prioritization could stifle certain political voices or give the telecom conglomerates with media assets an edge over rivals.

Is this net neutrality repeal set in stone? Not necessarily. The repeal could be overturned in court or by Congress. A Democratic senator is already working on legislation. Net neutrality advocates are also saying they’ll push ahead with both options to fight the repeal. In order for the repeal to go into effect, it must be approved by the Office of Management and Budget — a process that could take several months.

Other Voices:

Consumer groups, start-ups and many small businesses say there are examples of net neutrality violations by companies, such as when AT&T blocked FaceTime on iPhones using its network.

These critics of Mr. Pai, who was nominated by President Trump, say there isn’t enough competition in the broadband market to trust that the companies will try to offer the best services for customers. The providers have the incentive to begin charging websites to reach consumers, a strong business model when there are few places for consumers to turn when they don’t like those practices.

“Let’s remember why we have these rules in the first place,” said Michael Beckerman, president of the Internet Association, a trade group that represents big tech firms such as Google and Facebook. “There is little competition in the broadband service market.”

Mr. Beckerman said his group was weighing legal action against the commission. Public interest groups including Public Knowledge and the National Hispanic Media Coalition said they planned to challenge Mr. Pai’s order in court. Eric T. Schneiderman, the New York attorney general, also said he would file a lawsuit.

Dozens of Democratic lawmakers, and some Republicans, have pushed for Congress to pass a law on the issue, if only to prevent it from flaring up every couple of years at the F.C.C. — and then leading to a court challenge.

One Republican commissioner, Mike O’Reilly, said he supported a federal law created by Congress for net neutrality. But he said any law should protect the ability of companies to charge for faster lanes, a practice known as “paid prioritization.”  Any legislation action appears to be far off, however, and numerous online companies warned that the changes approved on Thursday should be taken seriously.

“If we don’t have net neutrality protections that enforce tenets of fairness online, you give internet service providers the ability to choose winners and losers,” Steve Huffman, chief executive of Reddit, said in an interview. “This is not hyperbole.”

Netflix, which has been relatively quiet in recent weeks about its opposition to the change, said that the decision “is the beginning of a longer legal battle.”  Netflix via Twitter (tweet) at 10:26 AM – Dec 14, 2017:

“We’re disappointed in the decision to gut  protections that ushered in an unprecedented era of innovation, creativity & civic engagement. This is the beginning of a longer legal battle. Netflix stands w/ innovators, large & small, to oppose this misguided FCC order.”

This author totally agrees with Netflix!  Let us know how you feel by leaving a comment in the box below this post. It can be anonymous if you like and your email address won’t be published!  Thanks, Alan

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References:

FCC Acts To Restore Internet Freedom (from FCC.gov website):
Reverses Title II Framework, Increases Transparency to Protect Consumers, Spur Investment, Innovation, and Competition
Documents:
Word : DOC-348261A1.docx  DOC-348261A2.docx  DOC-348261A3.docx  DOC-348261A4.docx  DOC-348261A5.docx  DOC-348261A6.docx
PDF : DOC-348261A1.pdf  DOC-348261A2.pdf  DOC-348261A3.pdf  DOC-348261A4.pdf  DOC-348261A5.pdf  DOC-348261A6.pdf
Text : DOC-348261A1.txt  DOC-348261A2.txt  DOC-348261A3.txt  DOC-348261A4.txt  DOC-348261A5.txt  DOC-348261A6.txt
12/14/2017
Restoring Internet Freedom FCC-FTC Memorandum Of Understanding
.
Documents:
PDF : DOC-348275A1.pdf
Text : DOC-348275A1.txt

4 thoughts on “FCC Votes to Reverse Net Neutrality & No Longer Regulate Broadband Internet Services

  1. First of all, Kudos to Alan Weissberger for writing this excellent blog with links to various documents and resources to provide a comprehensive analysis to the reader.

    At the core of this topic, I must say I am baffled by the FCC’s stance on this. FCC still regulates telecommunications, yet the Internet data pipelines used are the same as those of telecoms. From a policy perspective, how does FCC delineate Internet services from that of other telecom services?

    In my opinion, the fallback for consumers in the US would be the public utility commissions of various states. Treating the Internet as a public utility (FCC “Title II” order) is the way to go and protect consumers. However, that might require state legislative assembly bills to formalize it. So in my opinion, let the states mandate their own requirements for ISPs to operate.

  2. I go back to what many said before the Net Neutrality rules were put in place in 2015 and that is Congress needs to enact comprehensive legislation that updates all telecommunications law and regulations to reflect 21st century realities. In a world of converged networks, why are there so many FCC Titles/silos governing: broadcast, cable, satellite, telephone, etc.?

    –>Shouldn’t the rules and regulations also converge?
    The only way to do that is an act of Congress.

    Also, something that wasn’t widely reported is that the many municipal ISPs and cooperatives (owned by the customers) supported FCC Chairman Pai’s order ending net neutrality:

    https://www.ustelecom.org/sites/default/files/documents/171211%20Small%20Co%20Letter.pdf

  3. Divakar and Ken, Thanks very much for your on the mark comments. Many states plan to sue the FCC for repealing net neutrality. They include: New York, California, Washington, Illinois, Kentucky, Pennsylvania, Delaware, Oregon, Vermont, the District of Columbia, and Massachusetts.

    “California can regulate business practices to require net neutrality, condition state contracts on adhering to net neutrality, and require net neutrality as part of cable franchise agreements, as a condition to using the public right-of-way for internet infrastructure, and in broadband packages,” said CA State Senator Scott Wiener.

    References:
    http://www.slate.com/blogs/future_tense/2017/12/15/the_states_planning_to_sue_to_protect_net_neutrality.html
    https://www.cnet.com/news/california-washington-take-action-after-net-neutrality-vote/

  4. Letter to the NY Times Editor (published Saturday, Dec 16, 2017):

    “F.C.C. Reverses Rules Requiring Net Neutrality” (front page article, Dec. 15, 2017):

    The Federal Communications Commission on Thursday abrogated the very limited net neutrality regulations that the Obama administration had put in place. In a season when Washington politics has been overwhelmed by the naked greed of special interests, this may win pride of place as the single most greedy, corrupt and damaging such action.

    It is hardly a secret that American telecommunications markets are monopolized by a very few large corporations, and that the current F.C.C. chairman, Ajit Pai, worked for one of those large firms, Verizon. The end of net neutrality will allow Mr. Pai’s former employer to extract higher profits without returning better service to the American people.

    Who really thinks that allowing the large telecom corporations more control over what Americans see and read is a good thing? Giving monopolies more power will make it harder for new companies to enter the marketplace and limit the pace of innovation.

    In sum, Mr. Pai and the end of net neutrality exemplify everything that is currently wrong with Washington. Vested interests corrupt the policy process, lie to the American people and make decisions that further concentrate wealth and power in the hands of an elite few, with bleak consequences for the American people and our economy.

    Taking a clear stand against this may at the very least increase the chance that the inevitable next such outrage can be stopped.

    BARRETT L. MCCORMICK
    MILWAUKEE

    The writer is a professor of political science at Marquette University.

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