Tech companies and Internet providers are poised for another dramatic showdown as the head of the Federal Communications Commission revealed a plan Wednesday for rolling back his predecessor's rules mandating an open Internet.
Pai's attempt to reverse the net neutrality regulations rekindles a high-stakes debate over the future of the Web. Internet providers argue they need weaker rules to continue upgrading their networks and to find new ways of making money. Consumer groups say giving ISPs freer rein will cause them to abuse their powerful position as gatekeepers between customers and the rest of the Internet, controlling what Web users can see and do, and at what cost, online.
Pai said that his predecessor's net neutrality rules were “all about politics,” in a speech at the Newseum in Washington on Wednesday.
“Two years ago, I warned that we were making a serious mistake,” Pai said. “It’s basic economics: The more heavily you regulate something, the less of it you’re likely to get.”
Pai's proposal is set for a vote at the FCC's May 18 open meeting. If it is approved, Pai will begin seeking public feedback on the plan.
Pai argued that rolling back the rules will encourage ISPs to spend more on their broadband networks, speeding the spread of high-speed Internet across the country. He also claimed it would create new jobs and help protect Internet users' privacy by returning some authority to the Federal Trade Commission to sue companies that violate their own privacy policies.
Internet activists are gearing up for a war of public opinion over the proposal. The last time the FCC considered the rules, in 2015, critics and advocates of net neutrality flooded the FCC's electronic systems — submitting millions of comments, and setting an agency record, before the creaky database ground to a halt.
“Millions of people engaged in 2014-2015 to make sure these rules were instituted in the first place,” said David Segal, executive director of the advocacy group Demand Progress. “As Trump and his FCC seek to roll back the rules and let corporations manipulate Internet traffic in service of private profit, I'm sure we will see millions of Americans fight back.”
The stakes are as high as ever, as Republicans and broadband companies prepare to overturn an aspect of the policy they dislike the most: the classification of ISPs as “common carriers.” In a move led by Pai's Democratic predecessor, Tom Wheeler, that decision triggered a change in how the government may regulate the industry.
Classifying ISPs as common carriers enabled the government to legally ban some practices, such as the outright blocking of Internet traffic. And it also allowed the FCC to investigate other practices it viewed as potentially anticompetitive — such as when companies like AT&T and Verizon began exempting certain proprietary apps from their own wireless data limits. Critics of that tactic, known as zero-rating, say allowing it could give telecom companies the power to pick winners and losers in the Internet ecosystem.
Internet providers feared that the FCC could someday use its common-carrier authority to impose direct price regulations on the broadband industry. While the FCC under Wheeler refrained from doing so, the industry fought back with a high-profile lawsuit and allegations that the net neutrality policy was damping network investments. AT&T welcomed Pai's decision on Wednesday, saying that while it supported net neutrality in principle, the FCC's existing policy was “illogical.”
“We applaud FCC Chairman Pai’s initiative to remove this stifling regulatory cloud over the Internet,” chief executive Randall Stephenson said in a statement.
Tech companies nationwide have urged the FCC to keep the rules in place. Etsy, Vimeo, the start-up incubator Y Combinator and 800 other start-up firms sent a letter to Pai on Wednesday arguing that weakening the net neutrality rules would allow ISPs to “impede traffic from our services to favor their own services or established competitors.” And the Internet Association, a major trade group representing Google, Facebook, Netflix and others, said repealing the common-carrier classification would result in “a worse Internet for consumers.”
Earlier this month, Pai visited Facebook, Apple and other major firms to discuss his plan, as well as groups representing the cable and cellular industries. Although Pai had initially considered repealing the 2015 common carrier decision as part of his plan, he said Wednesday that the best path forward was not such an aggressive step, but an “open and transparent process.”
With the fate of a major Internet policy in the balance, Pai's proposal may lend momentum to U.S. lawmakers who have proposed replacing the current FCC rules with congressional legislation. Republican members of Congress have said they are ready to craft a bill that enshrines some of the existing regulations permanently into law. But that effort is expected to stall without support from Democrats, such as Sens. Edward J. Markey (Mass.) and Ron Wyden (Ore.) who argue the FCC can and should regulate ISPs more heavily.
Some Democrats, such as Sen. Richard Blumenthal (Conn.), signaled on a call with reporters Wednesday that they would support litigation against Pai's FCC to defend the net neutrality rules — much as broadband industry advocates sued to overturn the regulations in 2015.
But opponents of the FCC's regulations say the government should not replace the net neutrality regulations at all.
“The government should do nothing,” said Daniel Berninger, a network engineer who joined ISPs in suing to overturn the FCC's rules. “The government did nothing from 1995 to 2015, and everything worked fine.”