trending Market Intelligence /marketintelligence/en/news-insights/trending/iZffi8h30nI9qNS_H5hUzA2 content esgSubNav
In This List

FCC chairman circulates plan to overhaul net neutrality regulations


MediaTalk | Season 2
Ep.9 How Consumers Split Their Dollars, Time Among Streaming Services


MediaTalk | Season 2
Ep.8 The Masters Returns

Case Study

A Sports League Maximizes Revenue from Media Rights


Next in Tech Episode 162: The cloud native journey

FCC chairman circulates plan to overhaul net neutrality regulations

Federal Communications Commission Chairman Ajit Pai is moving forward with a plan to reclassify how broadband is regulated, a move that would limit the FCC's authority to enforce net neutrality rules in the future. The FCC will vote on the reclassification at its next open meeting, Dec. 14.

SNL Image
FCC Chairman Ajit Pai
Source: FCC

Pai, a Republican, said Nov. 21 that he shared a draft order with his colleagues that would overturn the Open Internet Order of 2015. The prior order classified broadband as a Title II service under the Communications Act, making it subject to more stringent regulatory authority. The 2015 order also enabled the FCC to enforce its net neutrality rules against blocking, throttling and paid prioritization, measures aimed at ensuring broadband service did not unfairly discriminate against or block access to legal content online.

In a Nov. 21 statement, Pai said the 2015 order "imposed heavy-handed, utility-style regulations" on the internet, while his new draft order, set to be publicly released Nov. 22, would take a "light-touch regulatory approach."

"Under my proposal, the federal government will stop micromanaging the Internet. Instead, the FCC would simply require Internet service providers to be transparent about their practices so that consumers can buy the service plan that's best for them and entrepreneurs and other small businesses can have the technical information they need to innovate," Pai said.

Proponents of the Open Internet Order were quick to criticize Pai's suggestion that consumers would have sufficient choices, however, given that in many U.S. markets, there are only one or two broadband service providers.

"Consumers have little choice in their ISP, and service providers should not be allowed to use this gatekeeper position at the point of connection to discriminate against websites and apps," Internet Association President and CEO Michael Beckerman said in an emailed statement. The Internet Association is a trade group that represents major internet companies such as Alphabet Inc. and Facebook Inc., among others.

FCC Commissioner Mignon Clyburn, one of two Democrats on the five-person commission, also criticized the draft order, saying it would "dismantle net neutrality as we know it by giving the green light to our nation's largest broadband providers to engage in anti-consumer practices, including blocking, slowing down traffic, and paid prioritization of online applications and services."

But others cheered the news of the draft order, with Kathy Grillo, Verizon Communications Inc. senior vice president and deputy general counsel for public policy and government affairs, arguing that the 2015 Open Internet Order imposed "a set of rules based on monopoly train and telephone regulation from previous centuries." As a Title II service, broadband in 2015 became subject to common carrier regulations. Common carriers such as public utilities and telcos are subject to different regulatory authority than non-common carriers, and are exempt from the Federal Trade Commission's jurisdiction.

Pai noted that as a result of his proposal, the FTC would "once again be able to police [internet service providers,] protect consumers, and promote competition, just as it did before 2015." He added that the FTC would also have the authority to regulate the online privacy practices of broadband service providers.

Following Pai's statement, Acting Federal Trade Commission Chairman Maureen Ohlhausen said the FTC "stands ready to protect broadband subscribers from anticompetitive, unfair, or deceptive acts and practices just as we protect consumers in the rest of the Internet ecosystem."

In supporting Pai's proposal, Grillo emphasized Verizon continues "to strongly support net neutrality and the open internet," adding that users should be able to access the internet when, where and how they choose. Grillo said she is confident "the FCC will reinstate a framework that protects consumers' access to the open internet, without forcing them to bear the heavy costs from unnecessary regulation that chases away investment and chills innovation."

Verizon has previously argued that even if broadband is reclassified as a Title I service, the FCC will have the necessary authority under Section 706 of the Telecommunications Act to adopt net neutrality protections. Republican FCC Commissioner Michael O'Rielly, however, has expressed doubt around the legal basis for that argument.