Net neutrality supporter holding a placard

FCC votes to roll back Obama-era net neutrality regulations in US

Image credit: Reuters/Yuri Gripas

The Federal Communications Commission (FCC) has voted three to two to scrap net neutrality regulations introduced by the Obama administration in a move that critics argue could allow internet service providers (ISPs) greater control over the web.

Net neutrality is the principle that all content on the internet is treated equally. Regulations introduced under President Barack Obama enshrined net neutrality into law, forbidding ISPs from speeding up content, or slowing down or blocking specific content that may be associated with a competitor.

This is significant in the US, where many telecommunications giants own major content providers: this is known as “vertical integration”. Verizon, for instance, has acquired Yahoo! and AOL.

In the US, there have been reports of cases in which ISPs have attempted to deprioritise or block content produced by rivals in the past, such as in 2012 when AT&T announced that it would disable the FaceTime app – a competitor to its own products – on its customers’ iPhones unless they upgraded to a more expensive plan. Supporters of net neutrality protections are concerned that the repeal of the Obama-era protections will leave no barriers to prevent such attempts succeeding in the future.

Following the repeal, telecommunications companies will still be subject to the Federal Trade Commission's authority, to general antitrust rules, and regulators will require ISPs to disclose how they are treating web content, although there will be no legal requirement to treat all content equally.

The repeal was spearheaded by FCC Chairman Ajit Pai, a former lawyer for Verizon, who was appointed to the position by Donald Trump in January 2017. The repeal of net neutrality protections, he argues, will lead to a more “free” internet and encourage innovation by ISPs.

“Following today’s vote, Americans will still be able to access the websites they want to visit,” said Pai. “The main complaint consumers have about the internet is not and has never been that they are service providers blocking access to content; it’s that they don’t have access at all or not enough competition.”

According to Dr Konstantinos Stylianou, a lecturer in competition law and regulation at the University of Leeds, it is possible that customers will benefit from the move towards deregulation. Customers may be able to access free or subsidised access to content or enhanced features for certain apps, he told E&T. Discrimination and exclusionary practice are an “inherent component of the competitive process”, he says; for instance, Amazon routinely promotes its own products over those of its rivals.

“I believe that because of the very close scrutiny ISPs are under even absent net neutrality rules, and because of the very well-shaped expectations of consumers in terms of large variety and few limitations, the newly enabled offerings will be about expanding choice and features rather than restricting them,” he said.

“This will of course influence consumer behaviour, which may turn out to disfavour some services and apps, but this is the result of consumers responding to choice, which is welcome. The more important question is: what will ISPs do with the extra revenue?”

“If they use [it] to offer consumers even better deals or invest in infrastructure or new services then this is a great outcome for all. If the additional revue becomes shareholder value, it’s not ideal. But this is an issue that goes well beyond net neutrality.”

The FCC’s repeal was firmly backed by the White House, with Sarah Huckabee Sanders, White House Press Secretary, stating that: “The Trump administration supports the FCC’s effort to roll back burdensome regulations.”

Pai’s rollback of the legislation has been riddled with controversies, in part due to his former role as a lawyer for Verizon – one of the largest ISPs in the US – but also due to its inaction in the face of mounting evidence of fraud during the public consultation on the repeal, which attracted a record 22 million comments.

A study by the Pew Research Centre found that 57 per cent of comments were submitted using temporary or duplicate email addresses and 94 per cent of comments were submitted multiple times. There is extensive evidence of comments being submitted by bots and using the identities of people who are deceased. The fraudulent comments are overwhelmingly in favour of the FCC’s repeal.

“[There is] clear evidence of organised campaigns to flood the comments with repeated messages,” the Pew Research Centre study concluded.

Senators, Congressmen, Attorneys General and other representatives called on Pai to delay the vote in order for a proper investigation into the public consultation to take place. In a letter to Pai, 18 Attorneys General state that evidence of fraud in the consultation “should raise alarm bells for every American about the integrity of the democratic process”.

However, Pai rejected these calls, stating that the vote would go ahead as planned and describing net neutrality supporters as “more desperate by the day”.

During yesterday’s vote, protesters congregated outside the FCC headquarters and called on net neutrality supporters in Congress to block the repeal. Republican FCC Commissioners Ajit Pai, Brendan Carr and Michael O’Rielly voted for the repeal, while Democrat FCC Commissioners Mignon Clyburn and Jessica Rosenworcel voted to save the regulations.

Politicians and lawyers have already promised to challenge the rollback; Democratic New York Attorney General Eric Schneiderman – who has been investigating the identity theft of his constituents during the public consultation on the repeal – has denounced the FCC’s vote as “illegal”. He is joined by Attorneys General of Washington and Pennsylvania in declaring intent to file cases against the FCC.

“Allowing [ISPs] to discriminate based on content undermines a free and open internet. Today’s action will seriously harm consumers, innovation and small businesses,” said Bob Ferguson, Washington Attorney General, in a statement.

The Internet Association – which represents Alphabet, Facebook and other internet giants – and the American Civil Liberties Union have stated that they are considering legal action against the FCC.

Meanwhile, state legislators in Washington and California have announced their intentions to retain net neutrality regulations at a state level.

In Europe, net neutrality is protected by EU regulations on open internet access. However, critics have argued that these protections still leave loopholes open for ISPs to exploit, such as through the option of providing faster access to “specialised services” or allowing the practice of “zero rating”, whereby certain websites or apps can be used without contributing to data limits.

Before the introduction of EU regulation, the UK had a voluntary system for open internet access. Whether the UK will choose to retain these net neutrality regulations, or implement similar protections, or return to softer-touch regulation under Ofcom when it withdraws from the EU is not yet known.

According to Professor Tommaso Valletti, Chief Competition Economist of the European Commission, a Europe without net neutrality regulations could look very different from a US without similar protections.

“The key [issue] here, which is ignored in the debate to a large extent, is the extent to which the ISPs compete; this is a huge problem in the US [where] there is vertical integration between ISPs and content providers, such as Comcast and Time Warner, so they have an extra incentive to exclude some rivals, which is made easier by abandoning net neutrality,” Professor Valletti told E&T.

If ISPs truly compete, this could bring some benefits to customers, as websites paying for faster speeds could result in reductions in subscription fees, Professor Valletti suggested, although this is “a big if”.

“In Europe, I would say personally that (1) ISPs are typically more competitive than [in the] US, (2) there is no vertical integration,” he continued. “Hence, abandoning net neutrality, while still controlling for market power, is an order of magnitude less worrying than in the US.”

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