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FCC chief moves to eliminate net neutrality regulations

Ajit Pai says he's fixing an Obama-era mistake that allowed the US government to micromanage the internet. Democrats warn the move will harm consumers.

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FCC Chairman Ajit Pai wants to reboot the rules governing the internet. Critics say that will destroy regulations protecting net neutrality.

CNET

The Federal Communications Commission is planning a full repeal of Obama-era net neutrality rules, handing the broadband and wireless industries a big victory in the war against government oversight of the internet.

On Tuesday, FCC Chairman Ajit Pai issued his proposal for dismantling the 2015 net neutrality regulations, which ensure all traffic on the internet is treated equally, and prevent broadband and wireless providers from blocking or slowing online content. Pai has also eliminated the legal foundation that gives the FCC oversight over internet services providers.

The federal government will stop "micromanaging the internet" under the proposal, Pai said in a statement. Instead, broadband providers will be required to be "transparent" about how they manage their networks to allow consumers and businesses to buy the service they need.

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"Today, I have shared with my colleagues a draft order that would abandon this failed approach and return to the longstanding consensus that served consumers well for decades," he said.

The FCC is expected to vote on the proposal Dec. 14.

Net neutrality is the principle that all traffic on the internet should be treated equally, whether you're checking Facebook, posting pictures to Instagram or streaming movies from Netflix or Amazon. It also means that a company like AT&T, which is trying to buy Time Warner, or Comcast, which owns NBCUniversal, can't favor its own content over a competitor's. It prevents broadband companies from charging a tiny startup trying to break into the streaming video or music business extra to reach customers more quickly.

Many people agree with the basic premise of net neutrality, but the FCC's existing rules have become a lightning rod for controversy because they placed broadband providers under the same strict regulations that govern telephone networks.

Pai, who was appointed FCC chairman in January by President Donald Trump, has said he supports the principles of net neutrality but he objects to the utility-style legal framework the 2015 rules were based on.

The heart of the Pai's repeal of the net neutrality rules is rolling back this utility classification of broadband and stripping the FCC of its authority to regulate the internet. In so doing, the proposal undercuts the legal standing for the rest of the rules, even the parts that people agreed on. This means the new proposal eliminates the no-blocking, no-throttling and no paid-prioritization rules, which allowed broadband companies to charge internet companies for speedier access to their customers.

The transparency rule

The FCC did manage to keep one aspect of the former rules, which was the transparency rule. The new proposal, however, tweaks the old rule by eliminating what FCC officials call "burdensome reporting obligations," which were required by the utility classification. Instead, the FCC says it has returned, with a few minor adjustments, to the rule that was originally adopted in the 2010 Open Internet Order.

Specifically, the FCC will require internet service providers to disclose information about how it manages its network and information regarding the expected network performance and commercial terms of its service. Companies will also be required to disclose what circumstances would allow it to block or slow down service, as well as information about whether it prioritizes any of its own services and content over competitors' services. Companies will also be required to disclose any paid priority services they offer and explain how they manage network congestion.

If broadband companies violate terms of service or overstep in any way, Pai said the Federal Trade Commission will be able to step in and take action.  

"The Federal Trade Commission will once again be able to police ISPs, protect consumers, and promote competition, just as it did before 2015," he said in a statement. "Notably, my proposal will put the federal government's most experienced privacy cop, the FTC, back on the beat to protect consumers' online privacy."

But former FCC chairman Tom Wheeler, who was at the helm of the agency when it passed the 2015 rules, said Pai's plan to allow the FTC to take the lead in policing the internet isn't sufficient. He said the proposal "raises hypocrisy to new heights" as the agency abdicates its authority to the FTC.

"They are 'protecting consumers' by disavowing responsibility to do just that," he said in a statement. "They are providing for 'better regulation' by giving authority to the FTC, which has no regulatory authority."

Network investments

Broadband companies applauded the FCC's move, calling Pai's proposal for a "light touch" on regulation a "restoration of internet freedom." Companies like AT&T and Verizon have argued that the legal basis of the rules, which reclassified broadband as a public utility, provided a disincentive to invest in their networks.

They say they were less likely to build their networks in hard-to-reach areas like rural regions or to offer faster, more innovative service because they were afraid the government would regulate rates or force them to open the infrastructure to competitors, as it did with the old monopoly telephone network.

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"For decades, the internet flourished under a bipartisan regulatory approach that allowed it to operate, grow and succeed free of unnecessary government controls," Kathy Grillo, a Verizon senior vice president, said in a statement.  She called the FCC's rules outdated and unnecessary. "It undermined investment and innovation, and posed a significant threat to the internet's continued ability to grow and evolve to meet consumers' needs."

Consumer groups and Democrats on the FCC and in Congress say those fears are unfounded. They say the rules protect consumers' access to any website or service they want. They fear that broadband companies will use their control over infrastructure to dictate how consumers will access the internet. And they also say broadband companies can use their control to keep competitors out of the market.

Jessica Rosenworcel, who voted for the 2015 regulations and is one of two Democrats on the FCC, said the sweeping rollback of net neutrality rules is a gift to cable and telephone companies that will ultimately harm consumers.

"This proposal … hands broadband providers the power to decide what voices to amplify, which sites we can visit, what connections we can make, and what communities we create," she said in a statement. "It throttles access, stalls opportunity, and censors content. It would be a big blunder for a slim majority of the FCC to approve these rules and saddle every Internet user with the cruel consequences."

Gigi Sohn, a former adviser to Tom Wheeler, the FCC chairman who championed the 2015 rules, said a repeal will lead to higher prices for consumers and less privacy online.

"In a few short weeks, the big broadband providers will be free to double their prices, extract extra tolls on fast lanes for online businesses, and track and sell their customers' web browsing activity," she said. "When they're done, what will remain of consumer protection on the Internet will be nothing more than a carcass."

Democratic lawmakers also warned that a repeal will harm consumers.  

"If adopted, the FCC's plan will change the way every American gets information, watches movies, listens to music, conducts business, and talks to their families," Sen. Brian Schatz said in a statement. "By repealing basic net neutrality protections, the FCC is handing over full control of the internet to providers, leaving the American people with fewer choices and less access."

First published Nov. 21, 8:40 a.m. PT.
Update, 9:20 a.m. PT: This story was updated with additional comments. 
Update 2:13 p.m. PT: This story was updated with additional comments and more information about the proposal to repeal the 2015 net neutrality rules.

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