Repeal of Net neutrality rules takes effect

Service providers dismiss consumer advocates’ worries about fast and slow lanes

It’s official. The Federal Communications Commission’s repeal of Net neutrality rules, which had required Internet service providers to offer equal access to all Web content, took effect Monday.

The rules, enacted by the administration of President Barack Obama in 2015, prohibited Internet providers from charging more for certain content or from giving preferential treatment to certain websites.

After the commission voted to repeal the rules in December, it has faced a public outcry, legal challenges from state attorneys general and public interest groups, and a push by Democratic lawmakers to overturn the decision. The opponents argue that the repeal would open the door for service providers to censor content online or charge additional fees for better service — something that could hurt small companies — and several states have taken steps to impose the rules on a local level.

Still, the repeal was a big win for Ajit Pai, the FCC’s chairman, who has long opposed the regulations, saying they impeded innovation. He once said they were based on “hypothetical harms and hysterical prophecies of doom.”

In an op-ed column published on CNET on Monday, Pai argued that the repeal was good for consumers because it restored the Federal Trade Commission’s authority over Internet service providers.

“In 2015, the FCC stripped the FTC — the nation’s premier consumer protection agency — of its authority over internet service providers. This was a loss for consumers and a mistake we have reversed,” Pai wrote.

The original rules laid out a regulatory plan that addressed a rapidly changing Internet. Under those regulations, broadband service

was considered a utility under Title II of the Communications Act, giving the FCC broad power over Internet providers. The rules prohibited these practices:

■ Blocking: Internet service providers could not discriminate against any lawful content by blocking websites or apps.

■ Throttling: Service providers could not slow the transmission of data because of the nature of the content, as long as it was legal.

■ Paid prioritization: Service providers could not create an Internet fast lane for companies and consumers who paid premiums and a slow lane for those who didn’t.

OBJECTIONS TO REPEAL

Many consumer advocates argued that once the rules were scrapped, broadband providers would begin selling the Internet in bundles, not unlike cable television packages.

Want access to Facebook and Twitter? Under a bundling system, getting on those sites could require paying for a premium social media package.

Another major concern is that consumers could suffer from pay-to-play deals. Without rules prohibiting paid prioritization, a fast lane could be occupied by big Internet and media companies, as well as affluent households, while everyone else would be left in the slow lane.

Some small-business owners are worried, too, that industry giants could pay to get an edge and leave them on an unfair playing field.

E-commerce startups have feared that they could end up on the losing end of paid prioritization, with their websites and services loading more slowly than those run by Internet behemoths. Remote workers of all kinds, including freelancers and franchisees in the so-called gig economy, could similarly face higher costs to do their jobs from home.

“Internet service providers now have the power to block

websites, throttle services and censor online content,” Jessica Rosenworcel, a Democratic member of the commission who voted against the repeal, said in an emailed statement Monday. “They will have the right to discriminate and favor the Internet traffic of those companies with whom they have pay-for-play arrangements and the right to consign all others to a slow and bumpy road.”

The FCC said it had repealed the rules because they restrained broadband providers like Verizon and Comcast from experimenting with new business models and investing in new technology. Its chairman has long argued against the rules, pointing out that before they were put into effect in 2015, service providers had not engaged in any of the practices the rules prohibited.

“America’s Internet economy became the envy of the world thanks to a market-based approach that began in the mid-1990s,” Pai said in a speech at the Mobile World Congress in February.

“The United States is simply making a shift from pre-emptive regulation, which foolishly presumes that every last wireless company is an anti- competitive monopolist, to targeted enforcement based on actual market failure or anti-competitive conduct,” he said.

Perhaps the repeal won’t change the direction of the Internet. In November, Farhad Manjoo argued in his New York Times column that the Internet had already been dying a slow death and that the repeal of Net neutrality rules would only hasten its demise.

He wrote that the biggest U.S. Internet companies — Amazon, Apple, Facebook, Google and Microsoft — controlled much of the online infrastructure, from app stores to operating systems to cloud storage to nearly all of the online ad business.

STATES TAKE ACTION

Several states have taken measures to ensure the rules stay in effect. For example, in March, Gov. Jay Inslee of

Washington, a Democrat, signed a law that effectively replaced the federal rules. Others, including the governors of Montana and New York, used executive orders to force Net neutrality.

As of late May, 29 state legislatures had introduced bills meant to ensure Net neutrality, according to the National Conference of State Legislatures.

Still, several of these measures have failed, some are still pending, and not every state has taken such actions.

For now, broadband providers insist they won’t do anything that would harm the “Internet experience” for consumers. Most currently have service terms that specify they won’t give preferential treatment to certain websites and services, including their own.

However, companies are likely to drop these self-imposed restrictions; they will just wait until people aren’t paying a lot of attention, said Marc Martin, a former FCC staff member who is now chairman of communications

practice at the law firm Perkins Coie. Any changes now, while the spotlight is on Net neutrality, could lead to a public relations backlash.

Companies are likely to start testing the boundaries over the next six months to a year. Expect to see more offers like AT&T’s exemption of its DirecTV Now streaming TV service from customers’ mobile data limits. Rival services such as Sling TV and Netflix count video against data caps, essentially making them more expensive to watch.

Although the FCC issued a report in January 2017 saying such arrangements, known as “zero rating,” are probably anti-consumer, the agency did not require companies to change their practices right away. After President Donald Trump appointed Pai chairman of the FCC, the agency reversed its stance on zero rating and proceeded to kill Net neutrality.