The FCC abandons the net

Chairman Ajit Pai unveils a proposal to repeal net neutrality rules but not replace them.

To the new Republican majority on the Federal Communications Commission, the biggest problem online is not the lack of competition among broadband internet access providers, even though more than 60% of the country has access to only one truly high-speed internet service — or none. Nor is the problem the possibility that broadband providers could interfere with the data their customers send and receive, picking winners and losers online.

Instead, in the GOP’s view, the problem is the tough set of net neutrality rules the commission’s previous Democratic majority adopted in 2015 in response to those two issues. So on Tuesday, the commission’s chairman, Ajit Pai, circulated a proposal that would treat those rules like an insect that needed to be sprayed, squashed and, just to make sure, flushed down the toilet.

Pai has sought to eliminate or dilute a slew of regulations in his first year as chairman, but this proposal may be the most consequential. At stake is whether the internet will remain a wildly innovative, start-upfriendly incubator of the new businesses that are transforming industries around the globe, or if broadband providers will become the net’s gatekeepers.

Six months in the making, Pai’s proposal — which is due to be released Wednesday and probably approved on Dec. 14 — would cancel seemingly every provision of the 2015 rules. Instead of clear prohibitions against broadband providers blocking legal sites, throttling content or collecting fees for prioritizing traffic (“paid prioritization”), the Pai plan would simply require them to notify the public when they do any of those things.

Not that the FCC would intervene if a broadband provider should abuse its chokehold on its customers’ on-ramps to the internet — say, by cutting off access to a competing service or driving customers to its affiliates’ websites. Pai’s proposal would leave the FCC toothless when it came to the internet. It would not only exempt broadband providers and wireless phone companies from the strict, utility-style regulation the commission imposed in 2015, it would eliminate the regulatory authority the commission used for a weaker set of rules in 2010.

In short, the proposal would be the most dramatic step backward on net neutrality since former FCC Chairman Michael Powell (a Republican) set out four fundamental “internet freedoms” as guiding principles for the nascent broadband industry in 2004.

Pai and his allies — as well as leading broadband providers — insist that they are committed to preserving an open internet where start-ups and conglomerates alike are free to innovate. They simply believe that net neutrality advocates have exaggerated the threat, and see the 2015 rules as costly handcuffs that prevent broadband providers from innovating. Pai seems particularly keen on paid prioritization, arguing that it could lead to new services — for example, online health monitoring — while generating revenue that could lower the price of broadband access.

But it’s naive at best to expect broadband providers that face little or no competition to lower prices as revenue goes up. And the current rules don’t block the sort of prioritization that sensitive health services might need — they just prohibit broadband providers from charging fees in exchange for bestowing a competitive advantage.

Pai’s proposal also ignores real incentives for broadband providers — especially those that are investing heavily in content, such as Comcast, AT&T and Verizon — to play favorites online. While some executives (such as Comcast’s David Cohen) have pledged to stay the course on the open internet, others have indicated that they plan to pursue paid prioritization. And with Pai’s blessing, AT&T and Verizon are already favoring their affiliates’ content in their wireless services through a “sponsored data” arrangement that lifts the usual data caps.

Supporters of Pai’s plan say that having the FCC stand down on the internet is no big deal, given that broadband providers will have to reveal what they are doing — with antitrust and consumer protection enforcers from the Justice Department and the Federal Trade Commission ready to pounce. Good luck with that. The FTC’s mission is to protect against misleading and deceptive practices, so broadband providers may be able to inoculate themselves just by being transparent about the favors they sell.

The new rule will almost certainly draw a lawsuit from online content and service providers. The best hope for consumers is that the courts will find that the FCC didn’t have sufficient grounds for its sudden about-face on net neutrality. Failing that, Congress should do what it should have done years ago: Grant the FCC specific authority to preserve a free and open internet, then order the commission to use it.