The FCC is about to repeal net neutrality. Here’s why Congress should stop them.

Publication Type: 
Other Writing
Publication Date: 
November 26, 2017

On Wednesday November 22, FCC Chairman Ajit Pai published his draft order outlining his plan to undo the net neutrality protections that have been in place in the U.S. since the beginning of the Internet. His proposal would leave both the FCC and the states powerless to protect consumers and businesses against net neutrality violations by Internet Service Providers (ISPs) like Comcast, AT&T, and Verizon that connect us to the Internet.

His plan discards decades of careful work by FCC chairs of both political parties, who recognized and acted against the danger ISPs posed to the free markets that rose out of and depend on the Internet. If his plan takes effect, ISPs would be free to disrupt how the Internet has worked for 30 years.

His plan repeals the existing net neutrality protections without a replacement. Contrary to Chairman Pai’s assertions, the Federal Trade Commission won’t be capable of protecting the open Internet. ISPs say they support net neutrality and bipartisan legislation to settle the issue. But ISPs only support draft bills that are net neutrality in name only, and whatever the merits of a legislative solution, Congress isn’t ready to pass a net neutrality law.

The proposal is scheduled for a vote at the FCC on December 14.

In the rush to eliminate net neutrality protections, Chairman Pai failed to hold a single public hearing, and has ignored the chorus of entrepreneurs, investors, businesses and citizens asking him to stop.

Citizens across the political spectrum are now looking to their elected representatives to speak out on their behalf and call on Chairman Pai to cancel the vote.

Chairman Pai proposes to dismantle the existing net neutrality protections.

Chairman Pai’s plan has three components.

1. He proposes to eliminate all of the current net neutrality rules with the exception of a modified transparency rule.

That means ISPs would be free to block, speed up or slow down websites, applications, and services; charge online companies for access to an ISP’s customers and block those that don’t pay; and to enter into deals with online companies to put them in a fast lane to the ISP’s customers. All of these are prohibited by the current rules.

The only remaining constraint under Chairman Pai’s plan: ISPs have to tell their customers that they are engaging in these practices.

ISPs will also be free to favor some applications over others by exempting them from their customers’ data caps, a practice called “zero-rating” that the 2015 net neutrality protections left for the FCC to evaluate case-by-case.

Finally, the FCC would lose the authority to oversee the points where ISPs like AT&T and Verizon connect to the Internet at large, which ISPs have used to slow down and extract fees from online services in the past.

2. He proposes to move ISPs to a different part of the Communications Act called Title I.

ISPs are currently classified as common carriers under Title II of the Communications Act. That provides the legal foundation for the current net neutrality protections.

Reclassifying broadband Internet service under Title I of the Communications Act would make it impossible for the FCC to adopt or enforce any kind of meaningful net neutrality protections going forward. That’s because the Court of Appeals for the D.C. Circuit ruled in the 2014 Verizon case that net neutrality protections can only be imposed on entities that have been classified as common carriers under Title II of the Communications Act.

3. He proposes to ban states from adopting any net neutrality rules of their own.

That would make it impossible for states to react to the lack of protections at the federal level with net neutrality or broadband privacy protections of their own.

Chairman Pai’s plan is a radical break from FCC history and a fundamental departure from how the Internet has operated for the past 30 years.

This proposal is a radical break from the FCC’s history of protecting and enforcing net neutrality, including by Republican chairs Powell and Martin.

Net neutrality protections did not suddenly appear in 2015. Although the FCC formally adopted network neutrality rules for the first time in 2010, we have always had a de facto network neutrality regime in the U.S. — first, through the architecture of the Internet, and later, through a mix of formal and informal FCC regulation and action. This de facto regime prevented or at least deterred blocking and discrimination.

Since its inception, Internet access in the U.S. has been guided by one basic principle: ISPs that provide the on-ramps to the Internet should not control what happens on the Internet.

Originally, this principle was built into the architecture of the Internet. In the mid-1990s, however, technology emerged that allowed ISPs to interfere with the applications, content, and services on their networks.

In the face of this threat, the FCC has strongly supported Open Internet principles since 2004, has expressed its expectation that Internet service providers would live by these principles, and taken enforcement actions that stopped discriminatory conduct. Until 2005, DSL providers were directly banned from blocking and unreasonable discrimination under Title II of the Communications Act. In addition, the FCC imposed binding net neutrality merger conditions, attached net neutrality requirements to stimulus grants for broadband services and to certain parts of the wireless spectrum, and, in 2010 and 2015, promulgated enforceable net neutrality rules.

(I explain this history and prior Republican Chairmen’s actions in more depth in a piece that was published in Fortune on November 22.)

The FCC’s decades-long commitment to and enforcement of this basic principle — that ISPs don’t get to pick winners and losers on the Internet — means Internet users in the U.S. haven’t had to worry about whether ISPs might block or discriminate against certain kinds of content or applications. Entrepreneurs who have an idea for a new application have not needed permission from ISPs in order to innovate and have been able to realize their ideas at a low cost.

This is a well-oiled free market at work.

By contrast, from 2009 to 2015, European law allowed blocking and discrimination, as long as it was disclosed. ISPs engaged in widespread blocking and discrimination, such as prohibiting Skype to protect their traditional voice revenue.

That’s the regime Chairman Pai envisions for the United States.

His plan would also allow ISPs to charge websites for access to the ISPs’ customers, block those that don’t pay, and build pay-to play fast lanes. This would be a radical departure from how the Internet has operated over the past 30 years and would allow ISPs to increase costs for businesses across the entire economy.

In the U.S., companies that use the Internet to reach their customers have always simply paid for their own access to the Internet. They have never had to pay any additional fees to their customers’ ISPs.

ISPs have wanted to change that since 2006, and Chairman Pai’s plan would finally allow them to do so.

Verizon told a federal court in 2013 that it should have the right to charge any website any fee Verizon liked — and if, for instance, the Wall Street Journal didn’t pay up, Verizon should be allowed to block its site.

ISPs also want to be able to offer fast lanes that would give better service to companies that pay ISPs when their data travels to the ISPs’ customers over the ISPs’ networks. Websites that don’t pay would receive a slower speed.

But the FCC, lawmakers and the public have long pushed back against access fees and fast lanes, and in 2010, the FCC formally prohibited them for cable and DSL providers and expanded those prohibitions to mobile in 2015.

Allowing these fast lanes and fees for access to ISP customers would hurt every single sector of the economy.

Today, almost every company relies on the Internet one way or the other. Large corporations that pay these fees will have higher costs, so their customers will be forced to pay higher prices for products and services. Small businesses and startups that can’t afford a fast lane will find it harder to compete; those that can’t afford the access fees won’t be able to compete at all.

Thus, Chairman Pai’s plan would allow ISPs to distort the well-greased free markets that rely on the Internet and tax businesses in every single sector of the economy.

Now all eyes turn to Congress.

As I explain below, allowing Chairman Pai to move forward with his plan repeals all existing net neutrality protections without a replacement, leaving consumers and businesses without protections against ISP interference for the first time in U.S. history.

Chairman Pai’s plans are deeply unpopular with people across the political spectrum. According to a poll released in July 2017, 77% of Americans support keeping the FCC’s existing net neutrality protections in place. This issue is not about party: 73 percent of Republicans, 80 percent of Democrats, and 76 percent of independents want to keep the current protections.

Unfortunately, the FCC is not accountable to the public, and Chairman Paiand his Republican colleagues have made clear that they do not give much weight to public opinion or to the number of comments.

However, members of Congress care about an open Internet and what their constituents think, and since they oversee the FCC, they have the power to stop him. Already, three members of Maine’s four-member congressional delegation, including Sens. Susan Collins (R) and Angus King (I), have spoken out in opposition to Chairman Pai’s proposal.

Congressional pressure has stopped the FCC before. In the past, the FCC has responded to pressure from Congress by choosing not to vote on previously circulated draft orders. Just last year, for example, the FCC tabled a proposed change to cable set top box rules after the draft order had been circulated.

Voters understand Congress can stop Chairman Pai from eliminating net neutrality. In the first 24 hours after Chairman Pai announced the plan, Americans made more than 200,000 calls to Congress through alone, urging their representatives to do just that.

Is there really no other option?

Chairman Pai defends the immediate removal of the existing net neutrality protections, arguing that the FTC can effectively police ISPs. ISPs have said that they support net neutrality and would support Congress passing bipartisan legislation that settles the issue.

But the FTC doesn’t have the power and tools to adequately protect consumers and businesses against net neutrality violations, and ISPs don’t really want Congress to adopt meaningful net neutrality rules. And whatever the merits of a legislative solution, Congress is not ready to pass a net neutrality bill.

The Federal Trade Commission will not be capable of protecting net neutrality.

Chairman Pai claims that the FTC can protect the open Internet once the FCC has eliminated the existing protections and classified ISPs as an information service under Title I of the Communications Act.

But even when the FCC and FTC shared oversight of ISPs before 2015, the FTC never enforced any net neutrality protections. That’s always been done by the FCC. For example, the FCC stopped DSL provider Madison River from blocking the Internet telephony service Vonage in 2005; prohibited Comcast from blocking peer-to-peer file-sharing applications in 2008; and forcedVerizon Wireless to stop interfering with customers’ ability to use their mobile phones as wireless hotspots.

By contrast, the FTC focused on ISPs deviating from their published privacy policies and deceptively advertising “unlimited” Internet plans that were not actually unlimited.

That is not surprising.

The FTC lacks the power and tools to police net neutrality violations. The FTC can intervene if a company violates its stated policies. But if a company discloses that it has paid fast lanes, charges online companies for access to users, and blocks those that don’t pay, there is nothing the FTC can do.

Beyond that, the FTC’s role is limited to protecting consumers against practices that “harm competition,” a term of art in antitrust law, after the fact. As a result, the FTC cannot adopt rules proactively.

Nor can it adequately protect against threats to innovation and free speech. For instance, current net neutrality protections ban broadband providers from creating fast lanes to their customers for websites that pay the ISPs a fee. These fast lanes tilt the market in favor of deep-pocketed companies and speakers, making it harder for startups, small businesses, and low-cost speakers to compete and be heard. While clearly harmful to innovation and free speech, that’s not an antitrust violation.

The FTC does not oversee ISPs today because it does not have authority over common carriers, and ISPs are currently classified as common carriers. But it’s not clear whether the FTC gains authority to oversee ISPs if the FCC moves ISPs into Title I. According to a recent Ninth Circuit Court of Appeals decision, the FTC does not have authority over any company that offers one common carrier service such as landline or cellular telephony. If that interpretation prevails, the FTC would be powerless to police the Internet services offered by companies like AT&T and Verizon since they are also telephone companies.

ISPs do not want to secure net neutrality by law.

ISPs are trying to create the impression that Chairman Pai’s plans are not a big deal. In advertising and public statements, they say they support an open Internet and support Congressional action to end the debate.

But behind closed doors, the ISPs are pushing for bills that would eliminate key components of an effective net neutrality regime. Their vision of net neutrality is limited to some principles against blocking and slowing down sites. They want the law to allow them to charge websites for access to the ISPs’ customers and block sites that don’t pay. They want to be able to charge websites fees to reach people faster. And they oppose FCC oversight over interconnection practices and zero-rating.

This is not net neutrality.

Thus, ISPs don’t want to secure net neutrality in law, they want to get rid of net neutrality by law.

This is not surprising. As this article explains, ISPs have been fighting attempts to enact or enforce net neutrality protections in Congress, at the FCC, and in the courts for years. When blocking was found unacceptable, ISPs declared they intended to charge websites for access to ISP customers. When that led to a public outcry and draft bills in Congress, they came up with the idea of charging websites for a fast lane to ISP customers.

And when the FCC’s 2010 rules foreclosed charging websites for data traveling inside an ISP’s network, they found a way to charge websites at the point of interconnection where data entered the ISPs’ networks. To do that the six largest ISPs refused to widen the pipes into their networks in 2013–14, slowing millions of Americans’ access to huge swaths of the Internet.

Congress is not ready to protect net neutrality by law.

Some argue this issue is too important to be decided by an independent agency and that Congress should settle the issue with legislation. But whatever the merits of a legislative solution, Congress is not ready to adopt a net neutrality bill.

Congressional Republicans are divided on net neutrality. Some Republicans do not see a need for net neutrality rules; others support a legislative solution. However, powerful Republicans in the latter camp are split on key net neutrality protections like the ban on online fast lanes. For example, Sen. John Thune, who chairs the Commerce Committee and would spearhead legislation in the Senate, wants to ban fast lanes. Rep. Marsha Blackburn, who heads the relevant subcommittee in the House Energy and Commerce Committee, wants to allow them.

Net neutrality is a complicated topic, and many members are just starting to think about how to best protect the open Internet. As Chairman Pai rushes to abolish the current net neutrality protections, Congress is focused on passing tax reform, negotiating a spending bill and a potential increase in the debt limit, finding a solution for the Deferred Action for Childhood Arrivals (DACA) program, and avoiding a government shutdown.

All of this makes it all but impossible for Congress to have the time to replace the FCC’s existing rules with equally strong, carefully written net neutrality protections in the near future.

Now members of Congress have to make a choice.

The question right now is not whether Congress should ultimately resolve the issue through net neutrality legislation. The question is whether the FCC should rush to unilaterally dismantle the existing protections and revoke the FCC’s ability to react to net neutrality violations in the future, before Congress has had a chance to deliberate.

Despite the wide range of voices urging him to slow down, Chairman Pai is determined to move forward quickly with his plan to eliminate all existing net neutrality protections, undoing decades of effort by FCC chairmen and commissioners from both parties.

The process has been inadequate, given the gravity of the issue and the number of people and industries affected. The Commission had to process more than 22 million comments in just three months. Contrary to net neutrality proceedings in 2008, 2010 and 2014, the FCC held no hearings with experts or the public.

Over the last 30 years, Americans have experienced unparalleled freedom and opportunity online. The low barriers to entry have let millions of entrepreneurs and small business owners live the Internet version of the American dream. Free markets have flourished across the Internet, leaving no industry untouched.

Chairman Pai’s plan would change that.

For the first time in history, ISPs will be allowed to interfere with these free markets, limiting choice, distorting competition and raising the price of doing business for everyone, including entrepreneurs and small businesses.

And for the first time in history, the FCC will be powerless to stop them.

Only Congress can prevent this from happening.