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FCC Chairman’s Net Neutrality Proposal Questions Need for Any Rules at All

Variety logo Variety 4/27/2017 Ted Johnson
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FCC Chairman Ajit Pai this week proposed reversing the regulatory framework for net neutrality, leaving vague the question of just what the rules of the road for the internet should be.

The text of his proposal, unveiled on Thursday, asks whether many of the most significant rules are needed at all.

It seeks public comment on whether some of the most significant regulations that govern how internet providers handle traffic — such as those prohibiting blocking or throttling of content — are necessary, or if the commission still needs to keep or modify the existing rules.

“The Commission partially justified the 2015 rules on the theory that the rules would prevent anti-competitive behavior by broadband internet access providers’ seeking to advantage affiliated content,” the proposal noted. “With the existence of antitrust regulations aimed at curbing various forms of anticompetitive conduct, such as collusion and vertical restraints under certain circumstances, we seek comment on whether these rules are unnecessary in light of these other regulatory regimes.”

The proposal is just the first step in a months long process as Pai seeks to repeal the underpinnings of his predecessor’s net neutrality rules. After a commission vote on May 18, the proposal and its questions posed will go up for public comment, which is expected to be a big battle to win consumer interest and sentiment.

Pai’s proposal notes that before 2015, many large ISPs voluntarily abided by a blocking rule “in the absence of a regulatory obligation to do so.”

“Do we have reason to think providers would behave differently today if the Commission were to eliminate the no-blocking rule?” the proposal asks.

Pai’s proposal also is skeptical of an existing rule banning so-called paid prioritization, or the ability of internet providers to sell to content companies or other internet sites speedier access to the consumer. The fears and warnings that, left unchecked, the internet would devolve into fast lanes and slow lanes, giving an advantage to big media and internet companies, helped drive support for the FCC’s 2015 action.

“What are the trade-offs in banning business models dependent on paid prioritization versus allowing them to occur when overseen by a regulator or industry actors?” Pai’s proposal asks. “Is there a risk that banning paid prioritization suppresses pro-competitive activity? For example, could allowing paid prioritization give internet service providers a supplemental revenue stream that would enable them to offer lower-priced broadband internet access service to end-users? What would be the impacts on new startups and innovation?”

Pai makes the case that the FCC’s current rules, adopted in 2015, have diminished investment largely because the commission, in a party-line vote, reclassified the internet as a common carrier. That regulatory maneuver, referred to as “title II,” gave them the legal grounds to pass a robust set of rules that ban ISPs from blocking or throttling traffic, or from selling “fast lanes” to whoever wants to pay for the speediest access to the consumer.

The proposal makes clear that Pai wants to repeal title II, but it still leaves unclear what, if any, rules the FCC should adopt if the commission takes that action. Instead, it leaves it up for public comment on whether the no blocking, no throttling and no paid prioritization rules should be kept, modified or eliminated altogether.

But a read through the proposal leaves little doubt that Pai and his staff are skeptical of the need for many of the FCC rules, which critics have long characterized as “a solution in search of a problem,” and advocates say are at the heart of net neutrality. Pai has said that he is a fan of a set of guiding principles for the industry that were introduced in 2004 by then-FCC Chairman Michael Powell, who now leads NCTA — the Internet & Television Association.

Another question in the proposal, left up for comment: “Is there any evidence of market failure, or is there likely to be, sufficient to warrant pre-emptive, comprehensive regulation?”

Some Republicans on Capitol Hill hope that as the FCC process moves along, Democrats will want to negotiate on legislation to settle the issue once and for all.

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