The future of net neutrality — the notion that internet access should be open and traffic should be treated equally — is uncertain as the White House changes leadership and President Donald Trump adds people to his administration who are hostile to consumer protections.
This week, Trump designated Ajit Pai as the Federal Communication Commission’s (FCC) new chairman. Pai voted against net neutrality and was one of the FCC’s two Republican commissioners originally appointed in 2012 by former President Barack Obama, who was a strong advocate for the rules. Pai now leads a team of three commissioners, fellow Republican Michael O’Reilly, who also voted against net neutrality, and Mignon Clyburn, a Democrat.
The FCC’s failure to prioritize consumer rights is an issue in both Democratic and Republican administrations, according to Sascha Meinrath, the director of the tech-focused think tank X-Lab in Washington, D.C., and Palmer chair in telecommunications for Penn State University.
But the regulatory area is so new that Trump’s administration may be able to have a lot of influence over this area moving forward.
“It may be possible to roll back the progress that was made,” he said.
In 2015, the FCC moved to reclassify the internet as a telecommunications service under Title II of the Communications Act to give the agency regulatory authority over internet service providers. The legal battle drew praise from consumer advocates and was decried by the telecom industry and lobbyists. But by waiting until recent years to solidify the FCC’s powers in regulating the internet, there’s not much law to support it, Meinrath said.
“There’s much less precedent on how the FCC will rule on certain things,” he said. “Because the FCC didn’t fix these problems [sooner] — kicked the can down the road — someone who is willing to make definitive decisions on this gets to make the rules of the road.”
What’s going to happen to net neutrality
Based on his past statements, Pai’s biggest concern regarding net neutrality has been that he thinks the FCC overreached, and only has legal authority to regulate the internet as an information service.
“It really is all about the Title II jurisdiction that is so objectionable to Pai, to most Republicans, and some Democrats as well,” said Doug Brake, a policy analyst for the Information Technology and Innovation Foundation in Washington, D.C. The ITIF was opposed to the net neutrality rules reclassification because of their potential to pose “undue influence on internet service providers,” he said.
“To my mind, there’s not going to be some radical break from the way we enjoy the internet now if we move away from Title II.”
“A lot of the dissents that Pai has written are grounded in really crisp legal interpretation of what the FCC’s legal statutory limit is…he’s been very clear in his distaste for Title II which was written for the telephone system.”
But undoing the FCC’s authority over net neutrality won’t come easy. “It’s not quite clear how Title II will be unwound,” Brake said. “I think more likely, in the short term, the FCC will reclassify the internet as a Title I information service,” which is how it was classified before the landmark 2015 vote and 2016 court victory upholding net neutrality.
Reverting back to the previous setup, when the internet was classified as an information service rather than a utility, would allow paid prioritization, which was commonly referred to as “fast lanes” and “slow lanes.” Brake said that while abuse of prioritization is possible, the benefit would be that data-sharing-intensive services, such as high-definition video calls, would get preference over other services in use, such as email.
“To my mind, there’s not going to be some radical break from the way we enjoy the internet now if we move away from Title II,” Brake said.
John Gasparini, a policy fellow at Public Knowledge, a telecom-focused think tank and advocacy group in Washington, D.C., said he expects the FCC to start the “complicated” and “messy” process of rolling back the FCC’s authority to regulate the internet.
“There’s a lot of complicated legal wrangling that will have to go on, and the politics of it are pretty messy. But given that we have a Republican Congress, a Republican FCC, and a Republican White House, I wouldn’t expect them to not try,” he said.
“We need to fire up the weed whacker and remove those rules that are holding back investment, innovation, and job creation.”
Should that happen, Gasparini believes the best chance to save net neutrality would be a similar to a bill originally floated by Sen. John Thune (R-SD) that enshrines the FCC open internet rules “in name but not in substance.” That means giving the FCC power to enforce against throttling, blocking, and slowing down access, but prohibits the agency from regulating other issues regarding broadband including the privacy and low-income and rural access issues.
But given the political climate and the likelihood that net neutrality could unravel, Gasparini said removing Title II would have a broader impact on consumers’ internet access.
“There needs to be a conversation about the serious negative impacts removing Title II will have on rural broadband deployment and broadband deployment everywhere,” he said of the reliance on phone connectivity for internet access. “Nobody on either side of the aisle says we need less broadband.”
‘The consumer outlook is grim’
Depending on who you ask, there’s a lot at stake with Pai at the FCC’s helm.
“The consumer outlook is grim,” Gasparini said, pointing to the telecom companies that are celebrating Pai’s nomination. As an FCC commissioner, “Pai, at every turn, has been opposed to every aggressive consumer action brought to the commission.”
Gasparini ticked off Pai’s record: He opposed Lifeline, a federal program that offers discounted phone and broadband service to low-income households; consumer privacy protections for broadband and telecom services; and net neutrality.
“We need to fire up the weed whacker and remove those rules that are holding back investment, innovation, and job creation. Free State and others have already identified many that should go,” Pai said in a December speech.
AT&T applauds President Trump’s decision to name @AjitPaiFCC as new FCC Chairman https://t.co/OEHaCVFpwU
— AT&T Public Policy (@ATTPublicPolicy) January 23, 2017
Telecom companies — some of which have celebrated Pai’s appointment — may breathe a little easier than before with Pai in charge.
Pai has a record of siding with telecom companies on zero-rating, when a wireless or internet provider allows consumers to view select content without counting against their paid data limits. Last year, the FCC launched an investigation into AT&T’s zero-rating practices for violating net neutrality. AT&T was singled out — but not punished — for being too aggressive in its Sponsored Data program because it made it “unreasonably” difficult for other content providers to compete with DirecTV, which is part of AT&T.
“With the rules that are already on the books now, they’re enforceable but enforcement tends to be discretionary.”
It’s unclear exactly what the Trump administration’s priorities will be for the FCC. The president has denounced net neutrality as a tool to discredit conservative media, but has been wary of mega mergers, such as the AT&T-Time Warner deal. It remains to be seen whether he’ll follow through because of his penchant for looser regulations.
Outside of the FCC’s legal authority over net neutrality, internet access in rural communities, consumer privacy protections, which were part of the net neutrality rules, regulation of broadband infrastructure, and regulations that influence cable and internet costs could all be affected in the next four years.
Is it really going to be that bad?
The FCC is ultimately a consumer protection agency, and the partisanship of the commission doesn’t change that. But it could affect how rules are enforced.
“With the rules that are already on the books now, they’re enforceable but enforcement tends to be discretionary,” said Gasparini, a policy analyst for Public Knowledge. “You can’t sue the FCC and force them to enforce a rule. They have to decide to it, the enforcement bureau has to decide to pursue it, and then the commission acts…and I wouldn’t expect Chairman Pai to be aggressive about that, at least in the consumer-facing spaces.”
The concern for many consumer advocates has been rising fees and bills for cable, wireless, broadband, and streaming services. Without strong regulation and oversight, consumers could end up paying more for the services they use as internet, cable, and streaming content providers pass costs of doing business onto the consumer.
“We think we’re buying internet access, but what we’re actually getting is bizarrely curated access,” said Meinrath, the director of the X-Lab think tank. “It’s not the internet. It’s something else.”
For example, services like Netflix pay broadband providers like Comcast for access to its customers and its broadband lines. The result is a two-sided market, in which the internet provider gets paid twice for the same service: The consumer and content providers pay for the internet access to downstream and upstream content, respectively. Those costs to companies like Netflix could then potentially be passed onto the customer.
Cable bills are “subject to the least amount of oversight and control to protect consumers,” Gasparini said. “And failing to pursue aggressive consumer protection policies only makes things worse and only takes more money out of people’s wallets, during times when that’s something folks don’t want to see.”
While the FCC’s priorities are still unfolding, telecom experts agree that everyone will have to wait and see.
“There’s a potential for abuse and there should be some oversight,” said the ITIF’s of practices like zero rating, but ultimately, the “open internet writ large is going to continue no matter who chairs the FCC.”