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Rushing to Gut Net Neutrality May Leave Internet Providers With No Federal Oversight

Tuesday, December 05, 2017 By Mike Ludwig, Truthout | News Analysis
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FCC Chairman Ajit Pai is interviewed by Stuart Varney of Fox Business Network at FOX Studios on November 10, 2017 in New York City. (Photo: John Lamparski / Getty Images)FCC Chairman Ajit Pai is interviewed by Stuart Varney of Fox Business Network at FOX Studios on November 10, 2017, in New York City. (Photo: John Lamparski / Getty Images)

New York City's chief technology officer and a coalition of internet rights and consumer protection groups are asking the Federal Communications Commission (FCC) to delay a vote on a proposal to repeal its net neutrality rules until a federal appeals court rules on whether the Federal Trade Commission has the authority to protect the internet instead.

The groups fear that the proposed repeal, coupled with the upcoming court ruling, could leave internet service providers like AT&T and Comcast without federal oversight and put consumers at their mercy. Internet service providers, or ISPs, consistently rank at the bottom of the American Customer Satisfaction Index.

The vote is currently scheduled for December 14, when the FCC's Republican majority is expected to approve Chairman Ajit Pai's proposal to gut the agency's 2015 net neutrality protections and return federal oversight of ISPs back to the Federal Trade Commission (FTC). In a letter sent to Pai on Monday, the groups argue that the FCC must wait to make sure that the Ninth Circuit Court of Appeals doesn't strip the FTC of that authority first.

FCC Chairman Ajit Pai is following the Trump administration's pattern of getting the dirty jobs done as quickly as possible.

The Ninth Circuit is considering a case that dates back to 2010, when AT&T stopped offering "unlimited" mobile data plans to iPhone customers for a set monthly rate. Wary of losing customers to other providers, AT&T allowed those who signed up before the change to keep their "unlimited" plans, but began quietly throttling their service by slowing the internet connection on their smartphones to a crawl after they reached a certain data threshold.

The Federal Trade Commission cried foul and filed a consumer protection action against AT&T in 2014, arguing the company did not adequately inform its customers about the throttling and essentially engaged in false advertising, according to Harold Feld, the senior vice president of Public Knowledge, one of the groups calling for a delay on the net neutrality vote. A federal district court denied AT&T's motion to dismiss the FTC action.

AT&T appealed, arguing that a federal regulatory exemption places the company outside of the FTC's jurisdiction. The company's rationale: In addition to offering internet services, it also offers traditional phone lines that are regulated as "common carriers" by the FCC. A three-judge panel on the Ninth Circuit sided with the company last year and threw out the FTC's action, but the court has since put that ruling on hold while it conducts a review of the case with a number of additional judges.

Meanwhile, the FCC's 2015 net neutrality rules that Pai wants to repeal have reclassified the internet itself as a "common carrier" service that falls under its jurisdiction, further muddying the waters.

The FCC's Open Internet rules seek to protect net neutrality -- the idea that ISPs should not play favorites with content on their networks -- by classifying the internet as a "common carrier" under Title II of the Communications Act. This allows the FCC to regulate broadband like an essential public utility rather than a luxury service, giving regulators broad authority to step in on behalf of consumers and content providers if ISPs try to shape internet access around schemes that maximize revenues or stifle competition.

Pai argues that the net neutrality rules are stifling innovation and competition by preventing ISPs from experimenting with new ways to raise the revenues needed to expand infrastructure and saddling startup providers with red tape. He is calling for a "light-touch" regulatory regime that would once again rely on the FTC to step in and file legal actions against ISPs if they violate net neutrality or engage in other anticompetitive behaviors without disclosing their plans to consumers first.

However, if the Ninth Circuit sides with AT&T in its case against the FTC after Pai and the FCC repeal the net neutrality rules and ditch the internet's common carrier status, neither agency would have jurisdiction over any telecom company that provides both internet and telephone service, which most ISPs do. In fact, AT&T has argued that neither the FCC nor the FTC have the legal power to punish the company for throttling its customers.

"If Chairman Pai and his fellow Republicans truly believe that the FTC will protect consumers, they have a responsibility to wait for the Ninth Circuit to decide if the FTC can actually do the job," Feld said in a statement.

In his draft order to repeal the net neutrality rules, Pai argues that the Ninth Circuit has already vacated the panel ruling in favor of AT&T that the larger bench is currently reviewing, so the FCC can move forward with its plans.

"But wait a minute -- we don't actually know how the Ninth Circuit ruling is going to come down," Feld told Truthout.

As chairman, Pai has the power to set the FCC's agenda and could easily decide to delay the vote on the net neutrality repeal. However, Feld said Pai wants to get the job done as quickly as possible because killing net neutrality is politically unpopular, and the more time passes before a vote, the more opportunity there is for significant opposition.

"He's not even getting support from the conservative base," Feld said. "We are seeing that Republicans who are worried about running for reelection now have to worry about this issue; they are getting a lot of phone calls."

As of Monday night, members of Congress had received 771,904 calls opposing Pai's proposal to gut the net neutrality rules since the chairman announced his plan, according to the pro-net-neutrality site battleforthenet.com. A recent poll by Morning Consult and Politico found that 52 percent of respondents support the current net neutrality rules, including 55 percent of Democrats and 53 percent of Republicans. Only 18 percent oppose the rules.

Democrats are gearing up to punish Republicans for repealing telecom regulations meant to protect consumers, including the net neutrality rules and popular privacy protections that Republicans in Congress rolled back earlier this year. If Pai delays the net neutrality repeal, Feld said, he may come under increasing pressure from lawmakers to ditch the effort as midterm elections draw near. So, Pai is following the Trump administration's pattern of getting the dirty jobs done as quickly as possible.

 "This is kind of the standard tactic of this administration with just about anything ... trying to ram it through before anybody has a chance to think about it," Feld said.

Copyright, Truthout. May not be reprinted without permission.

Mike Ludwig

Mike Ludwig is a staff reporter at Truthout and a contributor to the Truthout anthology, Who Do You Serve, Who Do You Protect? In 2014 and 2017, Project Censored featured Ludwig's reporting on its annual list of the top 25 independent news stories that the corporate media ignored. Follow him on Twitter: @ludwig_mike.

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Rushing to Gut Net Neutrality May Leave Internet Providers With No Federal Oversight

Tuesday, December 05, 2017 By Mike Ludwig, Truthout | News Analysis
  • font size decrease font size decrease font size increase font size increase font size
  • Print

FCC Chairman Ajit Pai is interviewed by Stuart Varney of Fox Business Network at FOX Studios on November 10, 2017 in New York City. (Photo: John Lamparski / Getty Images)FCC Chairman Ajit Pai is interviewed by Stuart Varney of Fox Business Network at FOX Studios on November 10, 2017, in New York City. (Photo: John Lamparski / Getty Images)

New York City's chief technology officer and a coalition of internet rights and consumer protection groups are asking the Federal Communications Commission (FCC) to delay a vote on a proposal to repeal its net neutrality rules until a federal appeals court rules on whether the Federal Trade Commission has the authority to protect the internet instead.

The groups fear that the proposed repeal, coupled with the upcoming court ruling, could leave internet service providers like AT&T and Comcast without federal oversight and put consumers at their mercy. Internet service providers, or ISPs, consistently rank at the bottom of the American Customer Satisfaction Index.

The vote is currently scheduled for December 14, when the FCC's Republican majority is expected to approve Chairman Ajit Pai's proposal to gut the agency's 2015 net neutrality protections and return federal oversight of ISPs back to the Federal Trade Commission (FTC). In a letter sent to Pai on Monday, the groups argue that the FCC must wait to make sure that the Ninth Circuit Court of Appeals doesn't strip the FTC of that authority first.

FCC Chairman Ajit Pai is following the Trump administration's pattern of getting the dirty jobs done as quickly as possible.

The Ninth Circuit is considering a case that dates back to 2010, when AT&T stopped offering "unlimited" mobile data plans to iPhone customers for a set monthly rate. Wary of losing customers to other providers, AT&T allowed those who signed up before the change to keep their "unlimited" plans, but began quietly throttling their service by slowing the internet connection on their smartphones to a crawl after they reached a certain data threshold.

The Federal Trade Commission cried foul and filed a consumer protection action against AT&T in 2014, arguing the company did not adequately inform its customers about the throttling and essentially engaged in false advertising, according to Harold Feld, the senior vice president of Public Knowledge, one of the groups calling for a delay on the net neutrality vote. A federal district court denied AT&T's motion to dismiss the FTC action.

AT&T appealed, arguing that a federal regulatory exemption places the company outside of the FTC's jurisdiction. The company's rationale: In addition to offering internet services, it also offers traditional phone lines that are regulated as "common carriers" by the FCC. A three-judge panel on the Ninth Circuit sided with the company last year and threw out the FTC's action, but the court has since put that ruling on hold while it conducts a review of the case with a number of additional judges.

Meanwhile, the FCC's 2015 net neutrality rules that Pai wants to repeal have reclassified the internet itself as a "common carrier" service that falls under its jurisdiction, further muddying the waters.

The FCC's Open Internet rules seek to protect net neutrality -- the idea that ISPs should not play favorites with content on their networks -- by classifying the internet as a "common carrier" under Title II of the Communications Act. This allows the FCC to regulate broadband like an essential public utility rather than a luxury service, giving regulators broad authority to step in on behalf of consumers and content providers if ISPs try to shape internet access around schemes that maximize revenues or stifle competition.

Pai argues that the net neutrality rules are stifling innovation and competition by preventing ISPs from experimenting with new ways to raise the revenues needed to expand infrastructure and saddling startup providers with red tape. He is calling for a "light-touch" regulatory regime that would once again rely on the FTC to step in and file legal actions against ISPs if they violate net neutrality or engage in other anticompetitive behaviors without disclosing their plans to consumers first.

However, if the Ninth Circuit sides with AT&T in its case against the FTC after Pai and the FCC repeal the net neutrality rules and ditch the internet's common carrier status, neither agency would have jurisdiction over any telecom company that provides both internet and telephone service, which most ISPs do. In fact, AT&T has argued that neither the FCC nor the FTC have the legal power to punish the company for throttling its customers.

"If Chairman Pai and his fellow Republicans truly believe that the FTC will protect consumers, they have a responsibility to wait for the Ninth Circuit to decide if the FTC can actually do the job," Feld said in a statement.

In his draft order to repeal the net neutrality rules, Pai argues that the Ninth Circuit has already vacated the panel ruling in favor of AT&T that the larger bench is currently reviewing, so the FCC can move forward with its plans.

"But wait a minute -- we don't actually know how the Ninth Circuit ruling is going to come down," Feld told Truthout.

As chairman, Pai has the power to set the FCC's agenda and could easily decide to delay the vote on the net neutrality repeal. However, Feld said Pai wants to get the job done as quickly as possible because killing net neutrality is politically unpopular, and the more time passes before a vote, the more opportunity there is for significant opposition.

"He's not even getting support from the conservative base," Feld said. "We are seeing that Republicans who are worried about running for reelection now have to worry about this issue; they are getting a lot of phone calls."

As of Monday night, members of Congress had received 771,904 calls opposing Pai's proposal to gut the net neutrality rules since the chairman announced his plan, according to the pro-net-neutrality site battleforthenet.com. A recent poll by Morning Consult and Politico found that 52 percent of respondents support the current net neutrality rules, including 55 percent of Democrats and 53 percent of Republicans. Only 18 percent oppose the rules.

Democrats are gearing up to punish Republicans for repealing telecom regulations meant to protect consumers, including the net neutrality rules and popular privacy protections that Republicans in Congress rolled back earlier this year. If Pai delays the net neutrality repeal, Feld said, he may come under increasing pressure from lawmakers to ditch the effort as midterm elections draw near. So, Pai is following the Trump administration's pattern of getting the dirty jobs done as quickly as possible.

 "This is kind of the standard tactic of this administration with just about anything ... trying to ram it through before anybody has a chance to think about it," Feld said.

Copyright, Truthout. May not be reprinted without permission.

Mike Ludwig

Mike Ludwig is a staff reporter at Truthout and a contributor to the Truthout anthology, Who Do You Serve, Who Do You Protect? In 2014 and 2017, Project Censored featured Ludwig's reporting on its annual list of the top 25 independent news stories that the corporate media ignored. Follow him on Twitter: @ludwig_mike.