U.S. Markets closed

Trump's FCC chair issues attack on open internet rules

Rob Pegoraro
Contributing Editor
FCC Chairman Ajit Pai. (image: Wikimedia)

When FCC chairman Ajit Pai declared in a speech Wednesday that he would move to demolish existing net-neutrality rules, he didn’t explain what new regulations would keep internet providers from blocking, slowing or surcharging the legal sites and apps you visit. A lengthy filing posted Thursday provides some answers — and if you don’t completely trust your internet provider, you may not like them.

This “Restoring Internet Freedom” document — in technical terms, a notice of proposed rulemaking — goes on for 23,000-plus words before appendices. Here’s how it could change what your internet provider can do with your data.

You say telecommunications service, I say information service

The filing first makes the case for reclassifying internet providers from “telecommunications services” to “information services” — a wonky distinction that has made an enormous difference every time the FCC has tried regulating how internet providers treat your connection.

Today, wired and wireless providers are all labeled telecommunications services — defined in the Telecommunications Act of 1934 as “the offering of telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used.”

The FCC put those companies in that bucket — often called “Title II,” after the section of the 1934 telecom act covering it — and reclassified them as “common carriers” when it passed the current “Open internet” rules in 2015.

Prior to that, from 2002 until the reclassification, the commission labeled internet providers “information services,” a newer definition from the Telecommunications Act of 1996 that begins “the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing or making available information via telecommunications.”

The FCC can certainly change the current regulations — courts have long said regulatory agencies can do that — but it will have to explain what’s changed since Pai’s predecessor, former FCC Chairman Tom Wheeler, instated the net-neutrality rules in 2015 after years of regulatory futility.

But Pai’s document doesn’t do that. Instead it says the FCC erred in by introducing the open internet regulations. On a press call Thursday, a senior FCC official waved aside questions over whether this attempt would pass muster in the courts: “We’re at the beginning of the process and are not going to prejudge those issues.”

The document also doesn’t address a longer-term issue: As other telecom services, from texts to voice calls to TV, move to internet delivery, the entire telecommunications service category becomes irrelevant.

Maybe we don’t need any “bright-line” rules?

The document then inquires about the basic need for any “bright-line” bans (as in, “thou shalt not” prohibitions) while insisting that the commission supports the principle that “consumers should have access to the content, applications and devices of their choosing as well as meaningful information about their service.”

For instance, it wonders if we need to prohibit internet providers from blocking sites: “Do we have reason to think providers would behave differently today if the Commission were to eliminate the no-blocking rule? Is the no-blocking rule … necessary for or burdensome on smaller providers?”

It then asks the same of banning internet providers from slowing down legal traffic, often called “throttling”: “When is ‘throttling’ harmful to consumers? Does the no-throttling rule prevent providers from offering broadband internet access service with differentiated prioritization that benefits consumers?”

The current ban on paid prioritization, in which a site or an app pays an internet provider to put its data above that of others, gets an even more skeptical treatment: “Could allowing paid prioritization give internet service providers a supplemental revenue stream that would enable them to offer lower-priced broadband internet access service to end-users?”

It also wonders if we should treat wired and wireless providers differently, as earlier, looser net-neutrality rules did. You’ll also see a proposal to define mobile broadband as a “private mobile service”; that may sound like a euphemism for total deregulation, but Gigi Sohn, a lawyer who worked as a counsel for Wheeler under President Obama, said that’s not so.

One existing rule, a “general conduct” regulation allowing the FCC to police such issues as Netflix (NFLX) finding its video becoming unwatchable on some broadband providers, is clearly out under this proposal. In cases of clear abuse, a separate agency, the Federal Trade Commission, would recover some oversight authority to crack down on deceptive conduct and companies engaging in “practices that no reasonable customer would accept,” an FCC official said during Thursday’s call.

Will this promote competition?

The document repeatedly calls out real-world economic consequences. That’s good — too many tech-policy debates, especially in intellectual-property areas like copyrights and patents — disregard the economy as a whole to focus on the rights of a subset of companies.

But will this regulatory relief actually increase today’s inadequate competition between internet providers, which in theory should provide sufficient market pressure to ensure that no one company can abuse your data? That’s unclear.

I suspect other decisions in Washington — most important among them, easing obstacles to building out new broadband networks — will affect that far more. So will such FCC moves as Pai’s action in early April to drop a merger condition that would have required Charter (CHTR) to extend its network into the territory of competitors.

The other unknown is what sort of reaction this proposal will get from the public. That’s up to you, and you can start by leaving a comment at the FCC’s site or — if your internet connection is too slow — by sending a letter to the commission at 445 12th St. SW, Washington DC 20554.

More from Rob:

Email Rob at rob@robpegoraro.com; follow him on Twitter at @robpegoraro.