The FCC announced on November 21, 2017 that it will vote on the repeal of its Open Internet Order of 2015, which enshrines the principles of net neutrality. The proposal, called “Restoring Internet Freedom”, has been expected since the change in US administration at the start of 2017, and will likely result in a return to the pre-2015 status quo, pulling back the reclassification of broadband as a telecommunications service. Oversight of competition in the broadband market will likely go back into the hands of the Federal Trade Commission.
The 2015 decision reclassified broadband as a telecommunications service
The FCC adopted its Open Internet Order in February 2015. This was the FCC’s second attempt to enforce net neutrality, after the first one of 2010 faced legal challenges.
The order brought broadband back into the basket of telecommunications services (from which it was removed in 2005), which meant the FCC can have jurisdiction over it, rather than the FTC. It included three main provisions for ISPs, as part of an Internet Conduct Standard approved through the Order. Subject to reasonable traffic management, these were:
No blocking. Broadband providers couldn’t block lawful content, applications, services, devices.
No throttling. ISPs couldn’t impair or degrade lawful internet traffic on the basis of content, application, service, or device.
No paid prioritisation. Paid prioritisation occurs when an ISP is paid to manage its network to benefit particular content, services, or devices. To protect against “fast lanes,” the Order forbids this.
The new proposal keeps some transparency obligations and preempts regulation at state level
The FCC’s latest proposal, scheduled to be voted on on December 14, 2017, mainly relies on two pillars:
The Declaratory Ruling would restore the classification of broadband as an information service, as was the case before the approval of the 2015 Report and Order; reinstate the private mobile service classification of mobile broadband internet access; and explain the effects of reclassification on other frameworks, including the need for a federal regulatory approach to interstate information services such as broadband access. Any regulatory measures taken by individual states or local authorities are preempted to guarantee consistency and minimise uncertainty.
The Report and Order introduces transparency requirements for ISPs to disclose information about their practices to consumers, businesses, and the Commission. It will restore the FTC’s powers to protect consumers and tackle anticompetitive practices in the broadband market.
Telcos welcomed the proposal, whereas digital economy players are very vocal about their discontent
The FCC’s proposal did not come as unexpected. It has been in Chairman Ajit Pai’s plans since his appointment in January 2017, and it reflects the position that the US president and the Republican party have always had toward net neutrality rules. Nonetheless, the debate around it has remained lively throughout the whole year, and is heating up as the day of the vote approaches.
ISPs have been unsurprisingly supportive of the proposal; however, they have also made efforts to reassure their customers that, once the 2015 rules are repealed, they will not engage in behavior currently forbidden (e.g blocking or throttling websites and content). Both AT&T and Comcast have been explicit in saying this. On the other hand, players in the digital economy are less keen to repeal net neutrality rules, in line with the stance they have taken in the past. However, some of them (Twitter, AirBnB) have been more vocal than others (Facebook, Google, Netflix). Activist groups such as savetheinternet.com have also regained strength in opposing the new proposal.
Once internet regulation goes back under the FTC’s remit, it will likely return to the light-touch approach of the pre-Obama era. The last report on broadband competition policy issued by a Republican FTC dates back to 2007, and notes that the sector is heading toward more competition, not less, and should not be subject to more regulation as there are no market failures to address.
Opponents’ concerns of an internet where websites are suddenly blocked are probably exaggerated, seeing as ISPs have for a long time acclimatised their customers to a relatively high degree of freedom with their connection. However, for that to stay the case, the FTC will have to be thorough and objective in assessing levels of competition in the market.
