FCC overturns net neutrality

Thursday 14 December 2017 | 20:17 CET | News
Update: 15 December 2017 | 11:03 CET

The Federal Communications Commission has overturned net neutrality rules, saying the regulatory framework will go back to the “light-touch” that allowed the internet to flourish for nearly 20 years. The rules were voted in in 2015, also to increase transparency requirements for consumers. The FCC said the new vote also covers “robust” transparency requirements that will work for consumers and help government better oversee the conduct of broadband providers.

The FTC back in charge of internet, consumer protection

 In particular, the FCC’s action restores the jurisdiction of the Federal Trade Commission to act when broadband providers engage in anticompetitive, unfair, or deceptive acts or practices. Broadband consumer protection will also go back to the FTC. The FTC, an independent agency of the government, was established in 1914 to promote consumer protection and prevent anticompetitive behaviour. It cannot punish violators but can issue cease and desist orders, and argue cases in courts. Its remit covers all products and advertising, as well as the do-not-call-registry act. 

Internet is no longer considered a "utility" but an "opt in" product

With the classification of broadband internet access services and mobile broadband internet access services restored to “information service,” and “private mobile service”, these services lose their status as “utility” and become simple opt in products, open to all competition on the market and little regulation. The FCC said the 2015 rules hampered innovation, particularly among small ISPs serving rural consumers. The new classifications –or rather the return to the old ones- will therefore encourage investment into broadband and innovation, and close the digital divide. 

ISPs will still have to disclose practices, with market forces ensuring consumer protection

Under the new rules voted in today, ISP will have to disclose information about their practices to consumers, entrepreneurs, and the Commission, including any blocking, throttling, paid prioritization, or affiliated prioritization. The FCC believes that that transparency, combined with market forces as well as antitrust and consumer protection laws, will achieve just about the same results as the 2015 rules, at a lower cost. The new rules eliminate what the FCC calls the “vague and expansive Internet Conduct Standard, under which the FCC could micromanage innovative business models.” The FCC explained previously that the Standard gave it far-reaching discretion to prohibit any ISP practice that could “unreasonably interfere or unreasonably disadvantage” the ability of consumers to access the online content and services of their choosing, and the ability of online content and service providers to freely access customers.

The vote

The officially named Declatory Ruling, Report and Order was voted along party lines (3-2), and passed despite calls from public interest and consumer groups, as well as from FCC commissioners. FCC Chairman Ajit Pai was joined by commissioners Michael O’Rielly and Brendan Carr in voting for the measure, while commissioners Jessica Rosenworcel and Mignon Clyburn dissented.  


Reaction to the news was immediate. 

Washington public interest group Public Knowledge called the vote “deeply troubling” and a “radical break from an almost 20 years of bipartisan FCC tradition of protecting the Open Internet.” “Today’s vote is an unprecedented abdication of responsibility by the FCC to protect free expression online and to promote a free market for innovation,” the group said. 

Mimosa Networks said the biggest harm to the internet was the fundamental lack of broadband competition. With no guarantee of net neutrality and little competition, the operator said there will be little pressure on the mega-ISPS to compete on price, improve their networks and ensure fair treatment to all types of traffic. It is then now “crucial for the tech industry to quickly unite and adopt new tactics to overcome America’s broadband problems and elevate the digital economy.” Co-founder and CPO Jaime Fink therefore called on the FCC to open the radio airwaves fairly to ISPs of all size.

Internet Association CEO Michael Beckerman said relying on ISPs to live up to their own ‘promises’ is not net neutrality and is bad for consumers. “Let’s remember why we have these rules in the first place,” he said, adding that the Internet Association is currently weighing its legal options in a lawsuit against the Order.

New York's attorney general Eric Schneiderman said he will file a multi-state lawsuit to stop the rollback, the Washington Post reported.

ISPs say the new rules will not be the death of the internet, as some net neutrality activists have claimed, and that consumer experience will not change. "The Internet will continue to work tomorrow just as it always has," said AT&T in a statement. The officials also said the 2015 rules discouraged providers from making broadband faster and more reliable, according to the industry. USTelecom, a trade group representing AT&T, Verizon and others, said that annual broadband infrastructure spending fell from USD 78.4 billion in 2014, before the rules took effect, to USD 76 billion in 2016.

FCC Commissioner Jessica Rosenworcel, a Democrat, took aim at the public feedback process that led to the decision, alleging major irregularities in the record. She alleges that 2 million comments filed to the FCC on net neutrality were submitted under stolen identities, with half a million coming from Russian addresses. Another 50,000 net neutrality complaints seem to have gone missing, she continued.

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