The Federal Communications Commission (FCC) voted yesterday to repeal the Obama Administration’s net neutrality regulations, also known as the “Open Internet Order.” That order, adopted by the FCC in 2015, reclassified broadband internet access providers as communication service providers for regulation under Title II of the Telecommunications Act, providing the FCC broad authority to regulate “common carriers” and created explicit prohibitions on broadband providers to block or throttle sites or apps or offer paid prioritization of any Internet content.
The new rules put in place by the FCC, officially referred to as the “Restoring Internet Freedom Order,” have been touted as “light touch” regulation by Chairman Ajit Pai, whereby broadband providers will still be required to adhere to transparency requirements regarding their treatment of content, which will be regulated by the Federal Trade Commission (FTC). Earlier this week, the FCC and FTC unveiled a draft Memorandum of Understanding (MOU) allocating regulatory authority under the new rule, outlining the FTC’s duties to regulate broadband provider practices under their FTC Act Section 5 authority to regulate unfair and deceptive practices, and to police anti-competitive practices. Under the MOU, the FTC and FCC have identified the following guidelines:
- Should an ISP fail to make the required disclosures—either in whole or in part—the FCC will take enforcement action.
- The FTC will investigate and take enforcement action as appropriate against ISPs concerning the accuracy of those disclosures, as well as other deceptive or unfair acts or practices involving their broadband services.
- The FCC and the FTC will broadly share legal and technical expertise, including the secure sharing of informal complaints regarding the subject matter of the Restoring Internet Freedom Order. The two agencies also will collaborate on consumer and industry outreach and education.
SIIA submitted comments on the initial proposal in August, urging the FCC to maintain strict prohibitions of content throttling and blocking, and a system for the FCC to effectively police anticompetitive practices by broadband service providers. Yesterday, in the wake of the Commission’s vote, SIIA released a statement calling for a legislative solution to achieve these goals. As a practical matter, given the likelihood of this issue remaining a political football at future FCCs, as well as the imprecise nature of Title II regulation of broadband service providers, this is an issue where Congressional action is necessary to create a more modern regulatory framework. Several bills have already been introduced, and more will be in the weeks ahead. However, the deep partisan divide in Congress and the upcoming election year will make for a difficult road in 2018.
Going forward, it is not likely there will be any significant changes to broadband internet access service in the near future. Like previous FCC net neutrality rules, this order is widely expected to generate lengthy legal proceedings, as advocacy groups and NY Attorney General Eric Schneiderman have vowed to file suit in the days ahead. Additionally, states such as California and Washington have vowed to pursue legislation that will at least maintain substantial public focus on this issue. Therefore, broadband providers are likely to be cautious about making significant changes immediately following approval of the new framework. That said, SIIA agrees with many critics that the new framework is likely to fall short of creating internet policy framework that ensures providers of innovative content are not disadvantaged in the marketplace. In 2018, we will closely assess legislative and other opportunities to achieve our goal of ensuring effective, enforceable net neutrality rules that will protect competition on the internet.