The Federal Communications Commission (FCC) has announced plans to repeal net neutrality regulations, putting the Federal Trade Commission (FTC) in charge of overseeing the internet. However, one FTC commissioner says users will be negatively affected by the change.
FCC chairman Ajit Pai released a draft order Tuesday, calling for the reversal of net neutrality regulations put in place under former President Barack Obama in 2015.
The FCC established net neutrality regulations to reclassify broadband as Title II “common carriers” under the Communications Act of 1934. Under the rules, the FCC was given the authority to regulate Internet service providers (ISPs) such as AT&T, Comcast and Verizon – similar to utilities – subjecting the entities to more government oversight.
The FCC prohibited ISPs from speeding up, slowing down or blocking any legal content, applications, services, or websites. ISPs were also banned from giving or selling access to “fast lanes” where traffic could be prioritized.
If the rules were reversed, broadband would be reclassified as a Title I “information service,” and ISPs would be allowed to charge users more to access certain websites, slow down services to websites they don’t agree with, or block websites entirely.
Many fear this could lead to ISPs deciding which websites, content or applications would succeed and which ones would fail.
Pai claims that the FTC, which was charged with overseeing ISPs before net neutrality was established, will “once again be able to police ISPs, protect consumers, and promote competition, just as it did before 2015.”
Pai paints the FTC as the “federal government’s most experienced privacy cop,” but one FTC commissioner disagrees.
Earlier this year, the FTC commissioner Terrell McSweeny testified on repealing net neutrality regulations before the House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law on net neutrality, where she warned about relying on the agency to hold ISPs accountable.
McSweeny points to a 2016 ruling from the Ninth Circuit Court of Appeals, which bars the FTC from regulating Title II common carriers, even if the carriers also practice non-common carrier activities. The ruling meant the FTC could not enforce its laws against any ISP that also provides any common carrier services, such as telephone services.
Since most major ISPs also have some kind of common carrier activities, the FCC became the only agency that could regulate ISPs. Congress would need to repeal the common carrier exemption on the FTC Act, or ISPs would not have any oversight from selling user’s data to the highest bidder, McSweeny said.
— Terrell McSweeny (@TMcSweenyFTC) November 21, 2017
In order to ensure that ISPs do not take advantage of users, Pai said the FCC would still require them to “be transparent about their practices.” However, McSweeny said ISPs will be able to change their terms and services regarding nondiscrimination on their networks without violating the FTC “so long as they provide clear notice of changes.”
“If these disclosures are truthful, there is no deception for the FTC to police,” McSweeny said.
The FTC commissioner added that since 58 percent of households have only one option for a broadband internet provider, neither the FTC nor competition would not force ISPs to “offer consumers better contract terms or quality of service or limit discriminatory conduct.”
McSweeny also questioned whether existing competition laws would be sufficient to protect free speech on the internet.
“Determining whether to allow ISPs to block or interfere with consumer expression and speech requires consideration of non-economic factors that antitrust law may not take into account,” McSweeny said.
McSweeny said antitrust enforcement would not prevent ISPs from taking discriminatory actions against competitors. She said it is “costly, difficult, and time consuming to detect and document” anticompetitive discrimination. She provides a real-life case of an ISP taking advantage of the FTC’s laws to put a competitor out of business.
“For example, assume a content provider foresees a threat from an upstart rival and pays for exclusive ‘fast lane’ access, thereby gaining a competitive advantage over the rival and ultimately driving it from the market. Even if the FTC were to detect the practice, investigate, and conclude that it was competitively harmful, we could not travel back in time to undo the harm to the excluded rival or to the competitive evolution of the marketplace. An up-front rule, by contrast, would be more likely to prevent the harm in the first place,” McSweeny said.
The FCC will vote on the proposal to reverse net neutrality laws on December 14.
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