FCC Repeals Net Neutrality Rules

In controversial move to restore Internet freedom and increase transparency

Subscription News: FCC Repeals Net Neutrality Rules

Source: FCC

In a controversial move last Thursday, the Federal Communications Commission repealed net neutrality, voting to overturn what it called heavy-handed, unnecessary governmental oversight over internet service providers. Net neutrality was enacted under the Obama administration in 2015 to impose fairness and openness across the internet, prohibiting ISPs from blocking or slowing down certain websites or providing preferential treatment to companies willing to pay for premium access or service.

In addition, the FCC has reclassified broadband internet access as an ‘information service’ under Title I of the Communications Act and mobile broadband internet access as a private mobile service. The FCC returned oversight of broadband service providers to the Federal Trade Commission who can take action against ISPs who engage in unfair, deceptive or anticompetitive practices.

Under the order, ISPs are required to disclose information about their business practices, including any blocking, throttling, paid prioritization or affiliated prioritization. The FCC says these actions will protect consumers and entrepreneurs via greater transparency and provide a more favorable business climate for ‘network investment.’

In a separate statement, FCC Chairman Ajit Pai responded to comments from critics. Here is an excerpt:

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Subscription News: FCC Repeals Net Neutrality Rules

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‘So what is the FCC doing today? Quite simply, we are restoring the light-touch framework that has governed the Internet for most of its existence,’ Pai said. ‘It is not going to end the Internet as we know it. It is not going to kill democracy. It is not going to stifle free expression online.’

‘Simply put, by returning to the light-touch Title I framework, we are helping consumers and promoting competition,’ Pai added. ‘Broadband providers will have stronger incentives to build networks, especially in unserved areas, and to upgrade networks to gigabit speeds and 5G. This means there will be more competition among broadband providers. It also means more ways that startups and tech giants alike can deliver applications and content to more users. In short, it’s a freer and more open Internet.’

In an opinion column for The Drum, Andy Vogel highlighted potential pitfalls of the repeal of net neutrality:

  • ISPs can block, throttle or prioritize service and limit access for apps and devices.
  • With the proper disclosures, ISPs can regulate access to specific sites.
  • ISPs can block, limit or slow down access to media outlets or impose pay-to-play business models to charge higher fees for premium access.
  • Consumers may see an increase in prices for cell and broadband services, especially if they are heavy data users.
  • Costs for advertisers, publishers and consumers are expected to increase.
  • If publishers reduce higher-bandwidth ads, this will impact their revenue and advertising rates.
  • More consumers could employ ad blockers to reduce data usage.
  • Because video ads and streaming video services require the most bandwidth, it is possible they may get more expensive to access and use.

According to The New York Times, Comcast, AT&T and major trade groups for broadband and cable service provides have said they don’t and won’t block or throttle certain sites or offer premium access to companies who want faster or prioritized delivery of data, downloads and streaming content. State governments aren’t taking any chances though. Some are already announcing plans to challenge the repeal of net neutrality, including Washington, New York and California.

After the FCC made its announcement Thursday, Washington state attorney general Bob Ferguson announced his intent to challenge the repeal of net neutrality.

‘Allowing internet service providers to discriminate based on content undermines a free and open internet. Today’s action will seriously harm consumers, innovation and small business,’ said Ferguson. ‘I was proud to stand with Gov. Inslee yesterday when he announced that Washington state will step up to protect consumers in light of this disappointing federal action. I comment him for his leadership and look forward to continuing to work with him to that end.’

Insider Take:

The repeal of net neutrality will be far reaching, perhaps in ways we can’t yet imagine. It will impact anyone who uses the internet. As the legal arguments unfold, it is not likely that we will see major changes right away, but we expect broadband providers like Time Warner Cable, Comcast and AT&T to use this change to their advantage at some point, seeking ways to grow revenue and expand their empires. In a way, it will be a sweet victory for them to take back a little of the revenue they’re losing from cord cutters who’ve replaced their cable boxes with more flexible and more affordable streaming video services like Netflix and Amazon Prime.

There are arguments to be made on both sides, but the FCC seems to favor big business and internet growth under the veil of ‘transparency’ and a government with a light touch. We aren’t buying it, and neither should subscription companies who will be significantly impacted by forthcoming changes.