US net neutrality rules get short shrift

The chairman of the US Federal Communications Commission outlined a sweeping plan to loosen the government’s oversight of high-speed internet providers, a rebuke of a landmark policy approved two years ago to ensure that all online content is treated the same by the companies that deliver broadband service to Americans.

The chairman, Ajit Pai, said high-speed internet service should no longer be treated like a public utility with strict rules, as it is now. The move would, in effect, largely leave the industry to police itself. The plan is Pai’s most forceful action in his race to roll back rules that govern telecommunications, cable and broadcasting companies, which he says are harmful to business.

But he is certain to face a contentious battle with consumers and tech companies that rallied around the existing rules, which are meant to prevent broadband providers like AT&T and Comcast from giving special treatment to any streaming videos, news sites and other content. “Two years ago, I warned that we were making a serious mistake,” Pai said. “It’s basic economics. The more heavily you regulate something, the less of it you’re likely to get.”

His plan, though still vague in details, is a sharp change from the approach taken by the last FCC administration, which approved rules governing a concept known as net neutrality in 2015. The rules were intended to ensure an open internet, meaning that no content could be blocked by broadband providers and that the internet is not divided into pay-to-play fast lanes for internet and media companies that can afford it and slow lanes for everyone else.

The policy was the signature telecom regulation of the Obama era. It classified broadband as a common carrier service akin to phones, which are subject to strong government oversight. President Barack Obama made an unusual public push for the reclassification in a video message that was widely shared and appeared to embolden the last FCC chairman, Tom Wheeler, to make the change.

The classification also led to the creation of broadband privacy rules in 2016 that made it harder to collect and sell browsing and other user data. Last month, President Donald Trump signed a bill overturning the broadband privacy regulations, which would have gone into effect at the end of the year.

Pai announced a plan to undo that classification. Pai said he was generally supportive of the idea behind net neutrality but said the rules went too far and were not necessary for an open internet. The new plan could include only voluntary commitments by broadband companies.

He said he would also seek public comment on how to preserve the basic principles of net neutrality — the prohibitions of blocking, throttling and paid priority for online traffic. Pai has opposed the current rules for years, and he voted against them as a commissioner. Critics of his ideas for changing the rules say any voluntary commitments would pave the way for the creation of business practices that harm competition.

“It would put consumers at the mercy of phone and cable companies,” said Craig Aaron, president of the consumer advocacy group Free Press. “In a fantasy world, all would be fine with a pinky swear not to interrupt pathways and portals to the internet despite a history of doing that.”

The new policy faces several hurdles before going into effect, including months of comments and revisions. But Republicans have a 2-1 majority on the commission, including Pai, so most proposals he puts up for a vote will generally be expected to pass.

Consumer groups and tech companies have warned of a legal challenge, however. The current net neutrality rules were affirmed by a federal appeals court, which could put an extra burden on Pai to justify his changes.

Pai’s rewrite of net neutrality rules is expected to take months and result in far weaker rules, which could include only voluntary commitments by broadband companies. Pai went to Silicon Valley to meet with executives of tech companies like Facebook, Oracle, Cisco and Intel to solicit their support for revisions to the broadband rules.

The Silicon Valley companies are divided on their views about the existing policy, with internet companies like Facebook supporting strong rules and hardware and chipmakers open to Pai’s changes. The FCC’s policing of broadband companies has drawn greater interest with recent proposals for big mergers, such as ATT’s $85 billion bid for Time Warner, that create media conglomerates that distribute and own video content.

Already, AT&T is giving mobile subscribers free streaming access to television content by DirecTV, which it owns. Consumer groups have complained that such practices, known as sponsored data, put rivals at a disadvantage and could help determine what news and information is most likely to reach consumers.

Telecom and cable companies have applauded the announcement. Since Pai’s appointment in January by Trump, their lobbyists have flooded the agency and the offices of Congress, pushing for an unwinding of rules that hamper their businesses. The No. 1 target has been the rules on broadband providers, which they complain has crimped their willingness to invest in their networks.

Pai has been an active figure in the Trump administration’s quest to dismantle regulations created by its predecessor. He froze a broadband subsidy programme for low-income households, eased limits on television station mergers and eased caps on how much a company like AT&T or Comcast can charge another business to get online.

Consumer groups challenged the assertions of telecom companies that broadband regulations harm their businesses. They said that publicly traded broadband companies have increased investments in their networks 5 per cent since the current rules went into effect.

About 800 tech start-ups and investors, organised by the Silicon Valley incubator Y Combinator and the New York-based policy advocacy group Engine, protested the unwinding of net neutrality in a letter sent to Pai. “Without net neutrality, the incumbents who provide access to the internet would be able to pick winners or losers in the market,” they wrote in the letter. So far, Google and Netflix, the most vocal proponents of net neutrality in previous years, have not spoken individually about Pai’s proposal.

Speaking through their trade group, the internet Association, they said the broadband and net neutrality rules should stay intact. “Rolling back these rules or reducing the legal sustainability of the order will result in a worse internet for consumers and less innovation online,” Michael Beckerman, chief executive of the internet Association, said in a statement.

Pai vowed a strong commitment to the plan: “Make no mistake about it: This is a fight that we intend to wage and it is a fight that we are going to win.”

— New York Times News Service