A federal appeals court on Monday rejected a request to review its prior decision upholding the Federal Communications Commission’s rules on net neutrality. The decision is a setback for the FCC’s current leadership.
Under Trump appointee Ajit Pai, the FCC has made a bid to scrap the net neutrality rules that have stopped broadband service providers from blocking or favoring certain companies and websites. The Open Internet Order rules, implemented under President Obama, are crucial to keeping a level playing field on the internet. Broadband companies however, have declared the rules to be excessive regulation.
Pai called the Monday decision “not surprising.” The next step for opponents of the neutrality rules may be to take the case to the Supreme Court. If this happens, the courts should continue to uphold the net neutrality rules, as an essential protection for consumers, innovators, and small businesses.
Pai outlined plans to roll back the rules last week, that would allow internet providers to make a voluntary promise to follow net neutrality principles, by including them in their terms of service with customers. Under his plan, the FCC would transfer oversight responsibility to the Federal Trade Commission (FTC). Pai’s proposed plans, officially a “notice of proposed rulemaking,” called for feedback from experts and the public. However, the Republican FCC commissioners have had longstanding problems with the net neutrality rules, and the FCC currently has a 2-1 Republican majority.
The rules were put in place under the prior FCC chairman, Tom Wheeler, and were upheld last year by the United States Court of Appeals for the District of Columbia Circuit.
Pai also wants to remove the designation of “common carriers” from companies like Verizon and Comcast, which allowed the FCC to regulate them similarly to utility companies. Without that designation, they would be regulated by the Federal Trade Commission. However, critics say the FTC lacks the power to regulate these companies as effectively as the FCC has. The FTC is a smaller agency, without the authority to make pre-emptive rules, able to act only if companies fail to honor their terms of service with customers.
Notably, Pai is a former lawyer for Verizon.
On Wednesday the 26th, eight hundred investors, startups, and innovators sent a letter to Pai, calling on him to preserve net neutrality rules.
There are many ways a rollback of net neutrality rules would have been damaging.
Large telecom companies want to receive special treatment, and better internet service, than their partners and subsidiaries. Called paid prioritization, this is a practice partially already in place by Verizon, Comcast, and AT&T. Loss of net neutrality would allow these corporations to demand fees from companies like Netflix and YouTube that depend on their ability to stream video to customers without interference. Scrapping the neutrality rules would limit competition and consumer choice, while raising prices. Without net neutrality, established companies will easily dominate smaller startups, which have been responsible for the innovation seen in the first decades of the internet.
Senators Ron Wyden of Oregon, Al Franken of Minnesota and former FCC chairman Tom Wheeler said in a Washington Post op-ed Wednesday that this neutrality, and the absence of paid fast lanes, allowed YouTube to overtake Google Video when it started in 2005.
“Internet service providers treated YouTube’s videos the same as they did Google’s, and Google couldn’t pay the ISPs to gain an unfair advantage, like a fast lane into consumers’ homes. Well, it turned out that people liked YouTube a lot more than Google Video, so YouTube thrived,” they wrote.
“Without net neutrality, the incumbents who provide access to the Internet would be able to pick winners or losers in the market. They could impede traffic from our services in order to favor their own services or established competitors. Or they could impose new tolls on us, inhibiting consumer choice.”
Opponents argue that companies that take up a lot of bandwidth should have to pay for it, but Pai’s alternative would make it very difficult for small companies and startups to get a foothold in an internet landscape dominated by large companies paying for access.
It is our opinion that ultimately, these changes would have hurt consumers, who would have fewer choices, and more limited access to internet services, so they must be prevented in the future at all costs. The courts should continue to uphold the safeguards.
If the rules are rolled back, the innovation that has been essential to the growth of the internet we know today would be stifled in the short term. In the long term, that lack of competition could lead to a slump in quality and higher prices for consumers. In theory, without net neutrality rules, ISPs could potentially stifle grassroots social and political movements that depend on the internet as a platform. A rollback would allow ISPs to pick and choose which websites are most easily accessed by viewers. While the immediate effects would seem to focus on the business world and the ability of small companies to innovate, a rollback of these rules could ultimately threaten free speech and equal access to the internet.