FCC Chairman Ajit Pai Sets in Motion Reversal of Title II Net Neutrality

Ajit Pai - Getty - H 2017
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FCC chairman Ajit Pai is introducing a proposal intended to reverse the Obama-era reclassification of broadband as a utility under Title II of the Telecommunications Act. If adopted, it will sweep away the underpinning of the agency's net neutrality rules adopted in 2015.

Pai showcased his plan at an eagerly awaited speech on Wednesday at the Newseum in Washington, D.C.. Although the cable news networks were focused on President Donald Trump's tax-cut proposals being revealed at the same moment, those introducing Pai spoke of how his new approach to light regulation would have sweeping and lasting impact. One speaker even went so far as to suggest it would have an even greater legacy than the president's changes to the makeup of the U.S. Supreme Court.

"The internet is the greatest free-market success story in history," said Pai, crediting former President Bill Clinton and a Republican Congress in the 1990s with deciding that the web should operate unfettered by federal or state regulation. "But two years ago, the federal government’s approach suddenly changed. The FCC, on a party-line vote, decided to impose a set of heavy-handed regulations upon the internet. It decided to slap an old regulatory framework called 'Title II' — originally designed in the 1930s for the Ma Bell telephone monopoly — upon thousands of internet service providers, big and small. It decided to put the federal government at the center of the internet."

At the time, the U.S. Court of Appeals for the District of Columbia had just put out a ruling that the FCC had exceeded its authority in issuing rules intended to require broadband providers like AT&T and Verizon to treat internet traffic equally. The appeals court held that anti-discrimination and anti-blocking measures couldn't stand if broadband providers were treated as information services, but didn't rule out allowing the FCC could do this under Title II. And so, the agency under the former leadership of Tom Wheeler did.

Pai didn't discuss this background. In his speech, he said the agency made the change and it had "nothing to do with the law or the facts."

"No, it was all about politics," continued Pai. "Days after a disappointing 2014 midterm election, and in order to energize a dispirited base, the White House released an extraordinary YouTube video instructing the FCC to implement Title II regulations. This was a transparent attempt to compromise the agency’s independence. And it worked."

Pai recalled warnings that "the internet would suddenly devolve into a digital dystopia of fast lanes and slow lanes" — the common example given is Verizon potentially deciding to choke Netflix's traffic without payment — and added, "Strangely, the case for Title II was a fact-free zone. ... Did these fast lanes and slow lanes exist? No. The truth of the matter is that we decided to abandon successful policies solely because of hypothetical harms and hysterical prophecies of doom."

And so, with hype that a different approach would encourage investments in infrastructure and mean more jobs, the FCC chairman announced he was issuing a Notice of Proposed Rulemaking that would return the classification of broadband service from Title II to a Title I information service. This will set off a comment period. Pai says he hopes to vote on it at an agency meeting next month. That's scheduled for May 18, and what likely will ensue over the next few weeks will be a fervent period where telecommunication companies stand in support and some digital giants attempt to rally efforts to "save net neutrality."

Comcast has already issued its applause of the move.

In a statement, Comcast CEO Brian Roberts said, "We fully support reversal of Title II classification, a 1930s statute that is outdated and harms consumers by creating a cloud over broadband investment decisions and innovation. Chairman Pai's proposed reversal of Title II does not mean there will be no open internet protections, but rather creates an environment where we can have a fresh constructive dialogue."

On the other side, INCOMPAS — a tech trade group whose membership includes Amazon, Facebook, Netflix and Twitter — issued its own call to arms. 

"Any effort to weaken open internet protections must be rejected as it could toss the streaming and internet economy back into chaos, taking consumers back to a time when ISPs like Comcast throttled Netflix and consumers had to buffer their way through a binge," said CEO Chip Pickering. "We believe the risks of FCC action far outweigh any reward."

In making the announcement, Pai spoke how he elected not to reverse Title II immediately via a declaratory ruling. He also promised to be transparent by detailing the full rule before it gets adopted. Additionally, Pai has previously expressed support for net neutrality principles like ISPs not being able to block or throttle traffic, and during his speech on Wednesday he said the FCC would be seeking comment on how to approach "so-called bright-line rules adopted in 2015."

Said Pickering, "Thankfully, Chairman Pai will conduct a public comment period, and we are willing to work with all stakeholders to achieve and maintain objectives that protect a free and open internet. But INCOMPAS will fight and oppose any effort to harm Americans’ abilities to access the content of their choice and weaken the most successful economic and free expression policy in American history.”