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Former FCC representatives weigh FTC's power on net neutrality

With the Federal Communications Commission set to vote on overhauling its net neutrality regulations soon, two industry experts with experience serving at the commission discussed the potential implications of the vote.

Speaking during an interview for C-SPAN's "The Communicators" series, Gigi Sohn, who held a senior staff position at the FCC under former Democratic Chairman Tom Wheeler, warned that the agency's proposed order "deregulates broadband" by taking "broadband oversight out of the FCC" and moving it to the Federal Trade Commission.

The proposed order, released by current FCC Chairman Ajit Pai at the end of November, seeks to reclassify broadband as a Title I service under the Communications Act, as opposed to the current Title II classification. Title II services are subject to more stringent "common carrier" regulatory authority. As such, the Title II classification allowed the FCC to impose and enforce net neutrality rules against blocking, throttling and paid prioritization. Pai's new order would eliminate those rules and instead rely on a transparency rule to protect consumers and businesses, as well as the Federal Trade Commission's protections against anticompetitive, unfair or deceptive acts and practices.

Sohn said a major problem with this change is that the FTC does not have "strong tools" to ensure a free and open internet, largely because the agency has no rulemaking authority. "They prevent harm before it happens — harm to consumers and harm to competition," she said.

Cooley LLP partner Robert McDowell, however, took umbrage at the idea that the FTC lacks strong tools. McDowell, who served as a Republican commissioner on the FCC between 2006 and 2013, noted that although the agency does not rely on pre-emptive rules, it does act to stop unfair business practices that are likely to reduce competition and lead to higher prices or reduced quality levels.

"The Federal Trade Commission is a $313 million agency with 640 lawyers and 70 Ph.D. economists," McDonnell said, noting that the commission serves as "a giant public interest law firm essentially, so the parade of horribles that come out from Title II proponents can all be cured by antitrust law."

Similar argument has been made by Federal Trade Commission Acting Chairman Maureen Ohlhausen. Speaking at an industry event after Pai's proposed order was released, Ohlhausen noted the agency has "a long history of actively protecting consumers and promoting competition across a wide range of industries." She pointed to the "multitude of cases" the FTC has brought against companies, including lawsuits against companies accused of "foreclosing rival content in an exclusionary or predatory manner." Ohlhausen said the agency has also "challenged problematic access, discrimination, pricing, and bundling practices."

Sohn, however, noted antitrust lawsuits can take years — time that a web-based startup business may not have. "You're going to be dead meat. This is why rules are so important," she said.

The FCC is scheduled to vote on the new order at its Dec. 14 meeting. With Republicans holding a one-vote majority on the five-seat commission, the order is widely expected to pass.