Mary Hanahan
Associate Editor
Loyola University Chicago School of Law, J.D. 2018

 

On November 21, 2017, FCC Chairman Ajit Pai announced his intent to roll back utility-style regulations on internet service providers promulgated in 2015. This issue will be called for a vote on December 14 at the FCC’s open meeting. President Obama pressured the FCC to promulgate rules to regulate the internet as a public utility and  preserve “net neutrality.” The FCC’s proposed repeal of these rules would restore internet service provider regulations to the framework established by the Telecommunications Act of 1996. This recent proposal has been divisive along party lines, and the FCC has reported receiving more than 22 million comments.

Background

The Telecommunications Act of 1996 passed with bipartisan support. It was designed to promote universal service, which is “the idea that the government should make sure that all Americans have access to communications services.” At the time this major legislation was passed, the internet was just beginning to take off. Supporters believed this would increase competition among telecommunications businesses by deregulating the market. Some critics of the Act, such as Common Cause Education Fund, say that after 10 years, “the public got more media concentration, less diversity, and higher prices.”

Since the Act was passed in 1996, technology continued to evolve at a rapid pace. In 2014, President Obama asked the FCC to classify the internet as a “Title II” utility. The President felt that regulating broadband internet as a public utility would guarantee access to this vital communication tool, while minimizing internet service provider access to information. Under the provisions of the Title II Order, passed in February of 2015, internet service providers are prohibited from slowing or blocking internet traffic in order to charge a fee for faster speeds or access to more sites.  Supporters of these measures include start-ups, public interest groups, internet companies (like Netflix and Amazon), and Democrats.

Republicans, cable television, and telecommunications companies were among the opponents to these regulations. Commissioner Pai, who served at the time, believed this order was unnecessary and would interfere with the competitive market, deterring investment and innovation. Opponents of these measures argued that these regulations would ultimately raise costs to consumers, due to the lack of competition and innovation.

 

The New Proposal

Commissioner Pai’s proposal currently exists in draft form and is titled “Restoring Internet Freedom Order.” The proposal repeals the 2015 regulations, and changes the classification of broadband internet access service from “public utility” to “information service.” It classifies mobile broadband internet access service (i.e. the data you use on your cellphone) as “interconnected service.” It also limits the ability of states to impose their own net neutrality rules. Finally, it requires internet service providers to disclose to consumers, entrepreneurs, and the FCC “information about their practices.”

This proposal has been divisive along party lines. Republicans, who support this measure, believe that the Obama-era regulations depress “investment in building and expanding broadband networks and [deter] innovation.”  Other supporters include AT&T, Comcast, and Verizon, which have said repealing the rules will lead to billions of dollars in broadband investment.

Democrats, opposed to the measure, argue that this proposal will increase costs to consumers and stifle their ability to stay informed and access various internet sites. By allowing internet service providers to control what websites and applications consumers may access and at what speed, internet service providers could stifle free expression and access to information.

Google, Netflix, and Facebook are all opponents of this repeal. Small businesses also argue that ending net neutrality would be harmful to them. They fear an increase in cost to access their data which has been stored in cloud-based data centers. They also fear this will inhibit their ability to market to consumers, who are less likely to see their websites if they are forced to pay extra for adequate download speeds. The American Sustainable Business Council pleads with the FCC in an open letter, stating that a repeal of these net neutrality regulations will impair their ability to compete in an open ecommerce market, by creating a “pay-for-play” internet system.

Update

Since the drafting of this article, the FCC cast its vote on net neutrality repeal. The votes were cast along party lines, with the Republican commissioners ultimately winning. Net neutrality will be repealed, however many anticipate lawsuits to be filed challenging the decision.