The telecom industry won a big victory in May when the FCC launched a repeal of its Obama-era net neutrality rules, over the objections of Democrats and tech giants like Google and Netflix.
Now both sides are about to find out how sweeping the reversal might be.
The FCC, under Trump-appointed Chairman Ajit Pai, is readying a final order that will spell out how thoroughly it intends to roll back the 2015 net neutrality order, which requires internet service providers like Verizon and Comcast to treat all web traffic equally. The release could come as early as next week, teeing up a possible commission vote in December.
So far, Pai has said he wants to scrap the legal foundation that the FCC’s old Democratic majority adopted to tighten federal oversight of ISPs, a move he contends has deterred the industry from investing in broadband networks. But he could also opt to eliminate the FCC’s core net neutrality rules altogether — which would in theory allow ISPs to block or throttle some types of web traffic, or charge websites for “fast lanes” to consumers.
Some FCC watchers believe the commission is likely to go that route, wiping the slate clean and relying on another agency, the FTC, to police whether internet providers are acting in an anti-competitive manner.
“I think right now that’s a strong contender for what the order might look like,” said Robert McDowell, a former Republican FCC commissioner who stepped down in 2013. Going back to a time before any net neutrality rules existed is “a legal and regulatory framework that seemed to serve entrepreneurs, ISPs and most of all consumers quite well as the internet blossomed,” he said.
As an alternative, the commission could rely on another legal provision to write new “light touch” net neutrality rules, or punt the issue of replacing the rules into another lengthy proceeding.
Whatever path the chairman takes, the public release of his plan is sure to reignite a policy debate that has smoldered for much of this year. The net neutrality proceeding has generated a record 22 million comments to the agency — more than five times the number that came in when the FCC initially approved the rules. Public interest groups warn that getting rid of the rules will let ISPs tip the scales in favor of some websites over others, and many expect a court challenge to any commission effort to gut the regulations.
The net neutrality rollback also underscores Pai’s effectiveness at deregulation since the longtime GOP commissioner took the helm of the FCC in January. While congressional efforts to repeal Obamacare have stalled and tax reform is still up in the air, Pai has steadily slashed regulations on everything from business broadband to media ownership. Anti-tax activist Grover Norquist lauded Pai this spring as President Donald Trump’s most important appointment after Supreme Court Justice Neil Gorsuch.
An FCC spokesman declined to comment on the upcoming rollout.
Supporters of the net neutrality rules want to keep the current legal framework, based on Title II of the Communications Act, which allows the FCC to more tightly regulate ISPs akin to a utility. They say it’s necessary to give the the commission enough authority to prevent bad practices by internet providers.
And, they argue, the FTC is not an adequate substitute, saying a clear set of FCC rules is preferable to the FTC’s method of after-the-fact enforcement.
“Rules are important because they moderate bad behavior and they let consumers know what their rights are,” said Gigi Sohn, an ex-aide to former Democratic FCC Chairman Tom Wheeler, who oversaw passage of the net neutrality rules. “It’s much harder when it’s case-by-case enforcement.”
Major telecom companies like Verizon and AT&T have been lobbying the FCC this month on what they’d like to see in the final order. While they support the chairman’s efforts to scale back the 2015 regulations, they also want the FCC to make it clear that states can’t jump into the void and pass their own versions of net neutrality rules.
A number of states introduced internet privacy bills earlier this year after Congress repealed the FCC’s privacy rules for broadband providers, heightening the industry’s fear that Democratically controlled state legislatures will do the same with net neutrality.
“(A)s the commission works to revive its historic light-touch approach to regulating these services, states and localities seeking to reinstate increased regulation could undermine the FCC’s efforts,” Verizon told the FCC.
FCC watchers agree that the agency is likely to revert to defining broadband as an “information service” with less stringent federal oversight, and jettison the so-called general conduct standard, which gives the FCC authority to police ISP behavior it deems as unreasonable.
The agency could also draw on another legal provision — Section 706 of 1996 Telecommunications Act — to write less onerous net neutrality rules. But GOP Commissioner Mike O’Rielly has said he doesn’t think the provision gives the FCC the power to do that. While Section 706 says the FCC should encourage broadband build-out and remove barriers to deployment, the agency’s Republicans have historically viewed that as more of a guiding principle, not a specific authority.
However, Comcast, Verizon and other telecom companies have urged the commission to consider using the provision to come up with rules that would be similar to, but not as stringent as, the current bans on blocking and throttling. Their arguments are bolstered by a D.C. Circuit Court of Appeals ruling in an earlier net neutrality case that indicated the provision could be used for some form of net neutrality rules.
Or the FCC could try to buy more time to work out new authority for rules by seeking additional comment on that issue.
Pai has said he intends to finish the net neutrality proceeding this year, making the December commission meeting his best shot. But given the likelihood of a legal battle, the FCC vote is unlikely to be the final word.
“It’s the end of the first round, and the second round is litigation,” Sohn said.