Net Neutrality May Be on Its Way Back in the U.S. If Biden Appoints a New FCC Commissioner

The White House has asked the Federal Communications Commission to restore the Obama-era net neutrality rules along with a few new regulations such as broadband nutrition labels and more. However, the directive means little unless the president exercises his powers to appoint a fourth FCC commissioner to break the 2-2 vote deadlock between Democrats and Republicans.

President of the United States Joe Biden on Friday made good on his administration’s plans to promote competition in the American economy by signing an executive orderOpens a new window that has once again kicked off the discussion on Net Neutrality. Biden’s order came days after the White House press secretary Jen Psaki revealed that the administration is planning to give consumers leeway, and more importantly the rights to repair consumer electronics, agritech equipment, etc.

Besides throwing its support behind the rights to repair movement, the presidential directive contains 72 initiatives, one of which is the restoration of the now-repealed net neutrality laws. These laws were first brought in during the previous Democrat administration of former POTUS Barack Obama.

Now, midway through the first year of the Democrat establishment after four years under Donald Trump-led Republicans, the spotlight seems to be back on these regulations. Net neutrality or Open Internet as the Federal Communications Commission (FCC) terms it, is designed for something that has underpinned the economic prosperity and productivity for businesses and consumers alike: the internet infrastructure.

Going by the provisions under the directive, clearly, the intention seems to be the consolidation of the corporations. The sector has remained unregulated since the former chairman of the FCC Ajit Pai repealed the laws in 2017.

The White House statedOpens a new window , “For decades, corporate consolidation has been accelerating. In over 75% of U.S. industriesOpens a new window , a smaller number of large companies now control more of the business than they did twenty years ago. This is true across healthcare, financial services, agriculture, and more.”

“That lack of competition drives up prices for consumers. As fewer large players have controlled more of the market, mark-ups (charges over cost) have tripledOpens a new window . Families are paying higher prices for necessities—things like prescription drugs, hearing aids, and internet service,” they added.

Background

The concept of Net Neutrality basically means fair and equal treatment of all data and traffic over the internet. Net neutrality is aimed to ensure the protection of rights to equal access to content on the internet wherein any internet service provider, whether broadband, wireless or otherwise, cannot and should not unfairly discriminate against any of the websites, online services by slowing down, or blocking access to them.

The term itself was coined way back in 2003 by Tim WuOpens a new window , an attorney and law professor at Columbia University, through his paper Network Neutrality, Broadband DiscriminationOpens a new window . Wu put forward the necessity of regulating this particular area in the broader telecommunications sector.

His arguments stemmed from the conviction that internet service providers should not have the power to prioritize content by categorizing and denying users access to some web pages. On the other hand, network and telecom operators are of the opinion that somehow their investments amounting to $1.5 trillion in the past two decadesOpens a new window offset the right to choose the rate at which, if at all, data is transmitted over their networks.

Wu was even invited by the FCC in 2006 to draft the first of the net neutrality regulations needed during the AT&T and BellSouth merger. FCC’s Open Internet Framework of 2010 failed to gather enough traction among the public, but five years later in 2015, the initiative was passed when the FCC under the Obama administration ruled in favor of the rules.

With Lina Khan at today’s signing of the Competition Executive Order. pic.twitter.com/d5hoz1ardTOpens a new window

— Tim Wu (@superwuster) July 9, 2021Opens a new window

Wu justified the need for net neutrality or Open Internet regulations by comparing the power of the present-day network providers to the influence the Telegraph wielded in the 19th century on the flow of information. “You know, it goes back to the Telegraph,” he said.

“In the 19th century, the Telegraph had such control over the wire news that they tried — would use their power to try to throw elections for the Republican Party. It has been the tension between the people who own the wires and the stuff on top of the wires that has been with us since the wires existed. And I don’t think it goes away. That’s why I think it’s you know, at some level, there always needs to be government oversight.”

See Also: United States Possibly Back on Track to Bring Right to Repair Regulations

Why Net Neutrality Rules Are Opposed?

Open Internet rules which enforced transparency, and outlawed blocking and unreasonable discrimination of traffic were vehemently opposed by a section of the stakeholders in the telecom and tech industries. Some companies such as Comcast and Verizon even took the FCC to court citing.

The main argument is that it’ll hold back investment in broadband. Additionally, it’ll also increase the cost to access the internet and related services.

Before long, in 2017, the rules were repealed when Pai voted against the Open Internet.

The FCC just voted to restore the long-standing, bipartisan approach to protecting Internet freedom #OpenMtgFCCOpens a new window

— The FCC (@FCC) December 14, 2017Opens a new window

Before acting on repealing the laws, Pai, then the chairman of FCC, saidOpens a new window , “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.”

Pai is referring to the more than 80 years old laws enacted to control the telephone monopoly. He added, “Two years ago, I warned that we were making a serious mistake. Most importantly, I said that Title II regulation would reduce investment in broadband infrastructure. It’s basic economics: The more heavily you regulate something, the less of it you’re likely to get.”

And that was that.

What Would the New Net Neutrality Rules Do?

If things go as planned, the revival of net neutrality as a federal measure would eliminate paid prioritization, access blocking, and equity in internet speed for all. Think of it as a public park that is freely accessible to all without any restriction over who gets to use the swings, and the slides, and so on.

Biden’s executive order encourages the Chair of the FCC to adopt net neutrality rules “similar to those previously adopted under Title II of the Communications Act of 1934 (Public Law 73-416, 48 Stat. 1064, 47 U.S.C. 151 et seq.), as amended by the Telecommunications Act of 1996, in “Protecting and Promoting the Open Internet,” 80 Fed. Reg. 19738 (Apr. 13, 2015).”

The new regulations would also require ISPs to provide Broadband Nutrition Labels akin to those provided on food products. The use of broadband nutrition labels or consumer labels as referenced above can help consumers with details on any hidden fees. It would require ISPs to provide pricing, internet speed, latency, modem costs, cancellation fees, data caps details, etc. Plans for broadband nutrition labels were abandoned in 2016.

ISPs would also be required to appraise the FCC of any and all broadband prices, as well as any changes in them for greater transparency. As such, the new rules should entail the following:

• Conducting future spectrum auctions under rules that are designed to help avoid excessive concentration of spectrum license holdings in the United States, so as to prevent spectrum stockpiling, warehousing of spectrum by licensees, or the creation of barriers to entry, and to improve the conditions of competition in industries that depend upon radio spectrum, including mobile communications and radio-based broadband services;
• Providing support for the continued development and adoption of 5G Open Radio Access Network (O-RAN) protocols and software, continuing to attend meetings of voluntary and consensus-based standards development organizations, so as to promote or encourage a fair and representative standard-setting process, and undertaking any other measures that might promote increased openness, innovation, and competition in the markets for 5G equipment;
• Prohibiting unjust or unreasonable early termination fees for end-user communications contracts, enabling consumers to more easily switch providers;
• Initiating a rulemaking that requires broadband service providers to display a broadband consumer label, such as that as described in the Public Notice of the Commission issued on April 4, 2016 (DA 16–357), so as to give consumers clear, concise, and accurate information regarding provider prices and fees, performance, and network practices;
• Initiating a rulemaking to require broadband service providers to regularly report broadband price and subscription rates to the Federal Communications Commission for the purpose of disseminating that information to the public in a useful manner, to improve price transparency and market functioning; and
• Initiating a rulemaking to prevent landlords and cable and Internet service providers from inhibiting tenants’ choices among providers.

The push for net neutrality is a part of Biden’s comprehensive plan to curtail dominance by network providers and big technology companies.

Acting Chairwoman of the FCC Jessica RosenworcelOpens a new window saidOpens a new window , “Our economy thrives on competition. It is the reason the United States is home to some of the most dynamic companies in the world. I welcome this effort by the President to enhance competition in the American economy and in the nation’s communications sector.”

However, FCC Commissioner Brendan CarrOpens a new window has a different opinion. He believes that the directive is “a big gift to Big Tech.” The success of Big Tech companies such as Google and Facebook, none of which are ISPs, is inherently dependent on cheap and free access to the internet. So how exactly these companies benefit from the ISPs and network carrier domain is questionable.

Carr goes on to say that the order seems to “double down on price controls, government-run networks, and monopoly-style regulations — actions that would only make it harder for smaller providers and new entrants to compete.”

See Also: Led by California, Net Neutrality Court Ruling Shifts Fight to States

Closing Thoughts

Biden has in the recent past indicated his will to create public networks, not just by functioning, but also by ownership. He also said he’d lower internet prices, prioritize ‘future-proof’ networks, and even called on Congress to allocate $100 billionOpens a new window for this under the American Jobs Plan.

In response, AT&T CEO John StankeyOpens a new window said, “It would be a shame that we take taxpayer money or ask local governments to go into a business that they don’t run today. You know, their job is to deliver water, patch streets, things like that, not be in a capital-intensive technology business that requires constant refresh and constant management.”

Stankey’s thoughts were echoedOpens a new window by Michael PowellOpens a new window , president and CEO of NCTAOpens a new window – The Internet & Television Association. The NCTA also criticized the recent developments and saidOpens a new window , “We are disappointed that the Executive Order rehashes misleading claims about the broadband marketplace, including the tired and disproven assertion that ISPs would block or throttle consumers from accessing the internet content of their choice.”

“As policymakers and industry share the goal of connecting every American to robust and reliable broadband service, we hope the Administration will put the rhetoric aside and focus on constructive solutions,” the association added. Strong lobbying is expected from NCTA, AT&T, Verizon, Comcast, and other ISPs and network carriers in the coming months.

But before the FCC proceeds with implementing the proposed rules, the independent federal body will have to vote on Biden’s order. Currently, FCC has three sitting commissioners (two Republicans and one Democrat) along with democrat Rosenworcel as the acting chairwoman and is tied 2-2. So Biden needs to appoint another commissioner to break the deadlock and to actually get things moving for the net neutrality regulations.

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