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With his new proposal, FCC chair Ajit Pai seeks to end net neutrality debate

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The issue of net neutrality has resurfaced in the U.S., thanks to President Donald J. Trump’s administration’s new Federal Communications Commission (FCC) chairman, Ajit Pai.

Pai recently unveiled his plan to scrap net neutrality rules, despite widespread opposition, as reported by NBC News.

With Republicans holding a 3-2 majority on the FCC board, the plan is likely to be approved when voting takes place on December 14.

What is net neutrality?

It may sound like something Switzerland did in World War II, but net neutrality is actually a shorthand term for regulation designed to keep the internet as open and free as possible. It’s there to make sure your experience on the web is not dependent on your internet service provider, or ISP.

Publicknowledge.org, an organization advocating for net neutrality (whose funders, which include a mix of massive corporations like AT&T, Facebook, and Google, as well as smaller orgs like American Hospital Association and Writers Guild of America, can be found here), defines it this way:

Net neutrality is the principle that individuals should be free to access all content and applications equally, regardless of the source, without Internet Service Providers discriminating against specific online services or websites. In other words, it is the principle that the company that connects you to the internet does not get to control what you do on the internet.

The idea is to ensure that service providers – Comcast, Verizon, AT&T, and others – won’t be able to function as information gatekeepers, tailoring what you do and don’t see, and can and can’t access, to their own interests. Instead, under net neutrality rules adopted in early 2015, service providers are required to provide equal access to all content and services.

A brief history of net neutrality in the U.S.

Under President Obama, the Democrat-majority FCC went through a series of moves to implement net neutrality. In December 2010, the FCC enacted its Open Internet Order 2010, which established three basic rules “grounded in broadly accepted Internet norms”:

  • transparency, in which fixed and mobile broadband providers were required to “disclose the network management practices, performance characteristics, and terms and conditions of their broadband services”;
  • no blocking, which is what it sounds like; service providers were not allowed to block lawful content or any applications that “compete with their voice or video telephony services”;
  • no unreasonable discrimination, meaning fixed broadband providers could not choose to slow down or speed up any lawful traffic online.

After the D.C. Court of Appeals ruled the Order invalid in 2014 because the FCC had previously classified the service providers “in a manner that exempts them from treatment as common carriers,” the Commission reclassified them as telecommunications services under Title II of the Communications Act of 1934 and voted 3-2 along party lines (The Washington Post) to implement a new net neutrality plan establishing three “Bright Line Rules”:

  • No blocking;
  • No throttling, or slowing down lawful traffic;
  • No paid prioritization, or “fast lanes.”

After surviving a difficult legal challenge from service providers in June of 2015, the new rules went into effect. However, after being elected president, Donald Trump appointed a new FCC chair, Ajit Pai, who believes the “heavy-handed, utility-style regulation of internet service providers (ISPs)” has stifled innovation and competition, and is the reason that “broadband investment has fallen for two years in a row.”

His two fellow Republican commissioners, Michael O’Rielly and Brendan Carr, agree, according to the Los Angeles Times. After Pai released his plan, Carr publicly endorsed it, and O’Rielly, who has said he wants to review it before deciding, voted against the 2015 implementation.

Why is the FCC chair trying to kill what seems to be a popular regulation?

Pai’s plan to repeal current net neutrality rules involves three components, according to an FCC statement: reclassifying ISPs as “information services,” deregulating mobile broadband services and transferring policing responsibility to the Federal Trade Commission (FTC), meaning it’s the FTC, and not the FCC, that would be responsible for ensuring ISPs don’t engage in anti-competitive practices.

In his proposal, he explains the rationale behind these moves:

  • Regulating ISPs as public utilities will – and already has, according to the figures he presents – stifle industry investment and innovation;
  • Classifying ISPs under Title II is “a solution in search of a problem” – in other words, the evidence does not back up the assertion that stricter regulation was needed to ensure an open internet;
  • The Federal Trade Commission (FTC) has the power to prosecute consumer protection and antitrust violations, particularly given the pledges ISPs have made to engage in net neutrality practices;
  • Small ISPs, which tend to serve rural areas, are harmed under the current regulation, through legal costs incurred to ensure compliance, and because the “‘black cloud’ of common carriage regulations” makes it harder to attract investors.

As evidence for the claim that public utility-style regulation stifles investment and innovation, Pai observes in the Los Angeles Times that “among our nation’s 12 largest internet service providers, domestic broadband capital expenditures decreased by 5.6 percent, or $3.6 billion, between 2014 and 2016 … the first time that such investment declined outside of a recession in the internet era.”

Although Pai points out in his new plan that “trends in the data” don’t necessarily establish causation, he still concludes that “the stark trend reversal that has developed in recent years suggest that changes to the regulatory environment created by the Title II Order have stifled investment.”

Pai also cites telephone service as a telling precedent, observing that within the communications industry, “it is apparent that the most-regulated sectors, such as basic telephone service, have experienced the least innovation, whereas those sectors that have been traditionally free to innovate, such as internet service, have greatly evolved.”

As evidence for his “solution in search of a problem” claim, Pai cites “the paucity of evidence” that “ISPs engage in conduct that harms internet openness,” and argues that “other legal regimes — particularly antitrust law and the FTC’s authority under Section 5 of the FTC Act to prohibit unfair and deceptive practices — provide protection for consumers.”

The ISPs’ recent pledges to uphold net neutrality principles constitute legally binding agreements that, if violated, could be prosecuted by the FTC under consumer protection or antitrust law, Pai suggests, arguing that “the case-by-case nature of antitrust allows for the regulatory humility needed when dealing with the dynamic internet.” Another benefit of transferring policing responsibility back to the FTC is that “the same long-practiced and well-understood laws apply to all internet actors,” including edge providers such as Facebook and Google.

As evidence for his claim that small ISPs, and the rural communities they serve, are harmed by the current net neutrality rules, in the Los Angeles Times Pai cites negative feedback the FCC received from “nearly two dozen of them.”

What do ordinary Americans think of Pai’s plan to roll back net neutrality rules?

In standard federal practice, Pai’s proposal also called for public comments “on whether to keep, modify, or eliminate” the Bright Line Rules of 2015. The Washington Post reports that around 800,000 of the 22 million comments submitted contain generic text critical of net neutrality, raising doubts about the integrity and accuracy of public feedback.

New York Attorney General Eric Schneidermann has been investigating for potential fraud (Medium) after many people complained that they hadn’t written the comments attributed to them. The FCC, however, has “declined to cooperate with [Schneidermann’s] investigation … rebuffing requests for logs and other records associated with the comments.”

Schneidermann said he’d made at least nine requests for records since June, and all have gone unanswered. In a statement on November 22, the day after Schneidermann published an open letter to Pai, the FCC denied Schneidermann’s account, reports ABC Newsarguing it was motivated by politics: “This so-called investigation is nothing more than a transparent attempt by a partisan supporter of the Obama Administration’s heavy-handed internet regulations to gain publicity for himself.”

The FCC also said that most of the suspicious activity came from comments supporting net neutrality, “including 7.5 million copies of another form message it said came from a fake email generator and 400,000 comments … from one address in Russia.”

Another 1.3 million comments came from addresses in France, Russia, and Germany, according to the National Legal and Policy Center, a conservative political nonprofit that “promotes ethics in public life through research, investigation, education and legal action.”

Elsewhere, Reddit, the “front page of the internet,” was “awash with red in protest over net neutrality,” according to CNET’s Claire Reilly, “as dozens of subreddits lit up the social network, all linking to the same thing: the pro-net neutrality website called Battle for the Net.”

And as Ars Technica’s Timothy B. Lee reports, protests against Pai’s plan to scrap net neutrality will be held on December 7 in front of Verizon stores nationwide – chosen because Verizon has led the fight against net neutrality.

How are internet giants like Facebook and Google reacting?

Facebook, Google, and Netflix, along with thousands of small businesses around the country, have all come out publicly against Pai’s plan.

In an emailed statement to Business Insider, a Facebook spokesperson said: “We are disappointed that the proposal announced today by the FCC fails to maintain strong net neutrality protections that will ensure the internet remains open for everyone.”

A Google spokesperson said: “The FCC’s net neutrality rules are working well for consumers and we’re disappointed in the proposal announced [on Tuesday].”

Netflix, in a tweet, said, “We oppose the FCC’s proposal to roll back these core protections.”

A Reddit spokesperson said, “We will continue to advocate for and work constructively to maintain a free and open internet.”

The Internet Association, which represents Amazon, Dropbox, Microsoft, and Uber, among others, released a statement saying: “Chairman Pai’s proposal, if implemented, represents the end of net neutrality as we know it and defies the will of millions of Americans who support the 2015 Open Internet Order. This proposal undoes nearly two decades of bipartisan agreement on baseline net neutrality principles that protect Americans’ ability to access the entire internet.”

Some of the ISPs – most notably Comcast and Verizon – have pledged to uphold net neutrality principles regardless of the outcome. But past conduct indicates otherwise, according to Lifehacker’s Thorin Klosowski, who compiled a list of “the tricks broadband companies have pulled” since 2003.

 

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