Breaking down the FCC’s proposal to destroy net neutrality

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Last week, the Federal Communications Commission voted to start a proceeding to repeal the 2015 network neutrality rules and the legal authority underlying it, Title II of the Communications Act of 1934. The rules ensure that internet users can access the online content and services of their choosing without interference from ISPs like Comcast, AT&T, Verizon, and Charter.

Yesterday the FCC made its final proposal to repeal the rules public. This document, known as a Notice of Proposed Rulemaking, or NPRM, is nearly identical to the draft Chairman Ajit Pai made public on April 27th. The NPRM starts the official period for public comment on the FCC’s proposal — comments are due on July 17th, and reply comments are due on August 16th. If you’ve already filed a comment, don’t worry — those count just as much as comments filed during the “official” comment period.

Normally, the purpose of an NPRM is to provide an agency with a record so that it can decide whether and how to regulate. But the net neutrality repeal NPRM leaves little doubt that this FCC is intent on completely abdicating its role in overseeing broadband internet access.

The first half of the NPRM sets out the FCC majority’s proposal for reversing classification of broadband internet access services as “telecommunications services” governed by Title II of the Communications Act. Among other things, this section discusses the effect this reversal would have on the FCC’s ability to enforce its privacy laws and implement its Lifeline program, which provides a subsidy to low-income households for broadband.

The second half purports to “re-evaluate” the existing net neutrality rules, the mechanisms that enforce them and any legal authority (other than Title II) that could be used to support them. The FCC majority proposes to eliminate the “general conduct standard,” which prohibits ISP practices that “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. With regard to the remaining rules (no blocking, no throttling, no paid prioritization, transparency), the majority doesn’t make firm proposals on whether to retain or repeal them. Instead, it asks questions about whether the rules are even necessary.

Back to Title I

The NPRM makes very clear the FCC majority’s distaste for the 2015 decision to reclassify both fixed and mobile broadband internet access services as telecommunications services under Title II, saying, among other things, that it “put at risk online investment and innovation, threatening the very open Internet it purported to preserve.”

The FCC majority makes three arguments in support of its proposal to reverse the 2015 classification decision:

  • First, it argues that the plain language, structure, and history of the Communications Act makes clear that broadband internet access services are “information services,” which would subject them to weaker oversight by the FCC.
  • Second, the majority argues that FCC precedent supports this reclassification, relying on what it claims are bipartisan decisions to that effect.
  • Third, citing nothing more than ISP-funded studies, it argues that Title II classification has “resulted in negative consequences for American consumers — including depressed broadband investment and reduced innovation because of increased regulatory burdens and regulatory uncertainty…”
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The NPRM asks about some aspects of the proposal to reclassify broadband internet access providers, but the leading questions it asks make the ultimate outcome clear.

For example, the NPRM asks about ways in which consumers were harmed prior to the 2015 decision, referring to “only four articulated examples” of harm from discriminatory ISP actions. The NPRM then asks: “Do these isolated examples justify the regulatory shift that Title II reclassification entailed? Do such isolated examples constitute market failure sufficient to warrant pre-emptive, industry-wide regulation?” These inquiries are hardly objective.

Asking if we need net neutrality rules at all

The NPRM first proposes to eliminate the general conduct standard, which ensures protection from discriminatory conduct not captured by the other bright line rules, including new practices in which an ISP might engage in the future. Making clear its intentions, the FCC majority “seek[s] comment on whether eliminating this vague standard will spur innovation and benefit consumers.” Importantly, the majority proposes “not to adopt any alternatives” to the rule.

With regard to the basic rules of net neutrality — no blocking, no throttling, no paid prioritization and transparency — the NPRM asks the same general question: are they necessary? Here again, the text of the NPRM and leading questions reveal the majority’s preference: to have no net neutrality rules at all. For example, the NPRM asks:

whether…regulatory intervention in the market is necessary in the broadband context. Beyond the few scattered anecdotes cited in the Title II Order have there been additional, concrete incidents that threaten the four Internet Freedoms sufficient to warrant adopting across-the-board rules? Is there any evidence of market failure, or is there likely to be, sufficient to warrant pre-emptive, comprehensive regulation?

Is there other legal authority to adopt rules?

If there was any question that the FCC majority has no intention of retaining or replacing any of the current net neutrality rules, the NPRM’s discussion of other possible sources of legal authority for future rules leaves no doubt. Put simply, the majority doesn’t think such authority exists.

Most telling is the NPRM’s discussion of the most likely source of authority, Section 706 of the Telecommunications Act of 1996. Section 706 requires the FCC to 1) encourage deployment of broadband “on a reasonable and timely basis” by utilizing a number of different regulatory mechanisms, and 2) eliminate barriers to broadband deployment if it finds broadband is not being deployed on a reasonable and timely basis.

While the federal courts on several occasions have upheld Section 706 as an independent grant of legal authority for certain broadband rules (for example, rules that require mobile wireless providers to enter into data roaming agreements), the majority asks if “better reading” of the law is that the language is not a grant of authority but merely “hortatory” (encouraging). It appears the majority intends to adopt an interpretation of Section 706 that would render it largely useless, leaving the FCC without any ability whatsoever to oversee the broadband market.

Impact of reclassification on privacy and Lifeline

The discussion of the impact of reclassification on privacy and Lifeline is brief. The majority recognizes that its proposal would strip the FCC of any ability to adopt rules to protect consumers’ broadband privacy, but it is content to cede that authority to the Federal Trade Commission. The FTC, as I’ve written about previously, can only enforce its governing laws — it can’t adopt rules to protect consumers before they’re harmed.

The majority also concludes without much discussion that its ability to support broadband with Lifeline funds is not jeopardized. Not that it would care much if Lifeline was endangered — Chairman Pai has made clear in word and deed that he dislikes the program. Interestingly, the NPRM does not ask whether the universal service program that provides subsidies to rural ISPs would be at risk under the majority’s proposal. The chairman has made providing such subsidies a cornerstone of his FCC agenda.

I’ve painted a bleak picture of the NPRM and the outcome its authors are driving toward. But that should not discourage you or anyone who cares about the future of an open internet. The publication of the final NPRM restarts the comment period and it’s imperative that everyone who wants to preserve net neutrality leave a comment. You can do so here and here. Jake Kastrenakes gives you the step-by-step here.

If you can, you should address some of the issues I’ve raised. If you can’t and just want to tell the FCC why you think the 2015 rules and Title II classification should be preserved, that’s great, too. If you have the time, send your comment to your member of Congress and your senators, or just call their offices.

Already over 2 million comments have been filed in the net neutrality proceeding, and the vast majority of those comments support the 2015 rules. Your participation will demonstrate to the FCC and your elected representatives in Congress that you and millions of other Americans care deeply about this issue. In light of the continued uproar over Congress’ repeal of the FCC’s 2016 broadband privacy rules, enormous public opposition to repeal of the net neutrality rules should give policymakers pause before stripping internet users of yet another important protection.

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