"Net neutrality" vote: FCC repeals rules that affect internet speed

The Federal Communications Commission on Thursday voted to overturn "net neutrality," the regulations ensuring that internet service providers such as AT&T (T), Comcast (CMCSA) and Verizon (VZ) treat all websites and online content equally.

The meeting was highly charged, reflecting the public controversy over whether to preserve or eliminate the Obama-era rules. As if to punctuate the drama, attendees at the FCC hearing were forced to abruptly clear the room over unspecified security concerns before Chair Ajit Pai cast his vote.

The debate ran along party lines, with the commission's Republican members voting to unravel the 2015 net neutrality rules and its two Democratic members voting against the measure. In casting the deciding vote, which put the final tally at 3-2 in favor of overturning net neutrality. Pai said, "The sky is not falling, consumers will remain protected."

While internet service companies say consumers won't notice a change, they have also lobbied hard to eliminate net neutrality, arguing that fewer regulations will allow them to innovate and deliver new services. Yet net neutrality has become a rallying cry for consumers regardless of political affiliation, with many expressing fears that the end of net neutrality will dampen free speech, create higher costs for internet users and allow ISPs to control what services they use on the web.

"We will have a Cheshire cat version of net neutrality," said FCC Commissioner Mignon Clyburn, who voted against the measure. "We will be in a world where regulatory substance fades to black and all that is left is a broadband provider's toothy grin." 

In her comments, which she described as a "eulogy" for net neutrality, she added, "What saddens me the most today is that the agency that is supposed to protect you is actually abandoning you." 

The proposal will not only roll back restrictions that keep broadband providers from blocking or collecting a toll for services they don't like -- it also bars states from imposing their own rules.

FCC commissioner Brendan Carr, who voted in favor of the repeal, said overturning net neutrality won't lead to the kind of problems the rules' defenders fear.

"This is no free-for-all," he said. "This is no Thunderdome. The FCC is not killing the internet." 

As the FCC moved closer to striking down net neutrality, protests have erupted online and in the streets as some Americans worry that cable and phone companies will be able to control what they see and do online. Such concerns cut across political lines, with a University of Maryland poll finding that 83 percent of voters favored keeping net neutrality intact, with 75 percent of Republicans and 89 percent of Democrats backing the regulations. 

Content providers such as Netflix (NFLX) expressed dismay with the decision, with the online video giant calling it "misguided." Some consumers also vented their disapproval on social media, questioning how the decision will affect their access to content and broadband speeds. 

"People feel sold out and they feel unlistened to," said Ryan Singel, media and strategy fellow at Stanford Law School's Center for Internet and Society. "The FCC process here was shameful. They rushed the process. They didn't hold a single public hearing. They allowed their comments to be overrun by fake comments, and they wouldn't run an investigation into it."

He added, "Most people feel Comcast and Verizon do not have people's best interests at heart." 

Pai's supporters say those concerns are overblown, but critics contend the end of net neutrality could create a tiered internet system that would hurt poorer Americans and small businesses, while fattening the internet gatekeepers' coffers.

That growing public movement suggests that the FCC vote won't be the end of the issue. New York's attorney general, Eric Schneiderman, on Thursday announced he is launching a "multistate lawsuit" against the FCC's action. Opponents of the move are planning other legal challenges, and some net neutrality supporters hope to ride that wave of public opinion into the 2018 elections.

Schneiderman's office claims that roughly 2 million comments submitted as part of the FCC's process to solicit public feedback on its plan to repeal net neutrality were fake.

Concern about the FCC plan

Pai, a former Verizon attorney who was appointed FCC chief by President Donald Trump, said his plan eliminates unnecessary regulation that stood in the way of connecting more Americans to the internet. Under his proposal, the Comcasts and AT&Ts of the world will be free to block rival apps, slow down competing service or offer faster speeds to companies who pay up. They just have to post their policies online or tell the FCC.

The change also axes consumer protections, bars state laws that contradict the FCC's approach and largely transfers oversight of internet service to another agency, the Federal Trade Commission.

After the FCC released its plan in late November, well-known telecom and media analysts Craig Moffett and Michael Nathanson wrote in a note to investors that the FCC plan dismantles "virtually all of the important tenets of net neutrality itself."

That could result in phone and cable companies forcing people to pay more to do what they want online. The technology community, meanwhile, fears that additional online tolls could hurt startups who can't afford to pay them - and, over the long term, diminish innovation.

"We're a small company. We're about 40 people. We don't have the deep pockets of Google, Netflix, Amazon to just pay off ISPs to make sure consumers can access our service," said Andrew McCollum, CEO of streaming-TV service Philo.

Portugal may offer insight into what types of plans Americans could see without net neutrality. Services slice and dice programs and data by types of applications, such as "messaging" or "music." While Portugal is bound by the European Union's net neutrality laws, it does have some freedom in "zero-rating" plans, or providing data from certain sites or services that might be unlimited as part of a monthly package. 

That type of plan can become problematic if ISPs decide to favor data from their own businesses or services that pay up for preferential treatment. Currently, American consumers typically pay their ISPs for a certain amount of bandwidth, regardless of which services they use. 

Broadband providers pooh-pooh what they characterize as misinformation and irrational fears. "I genuinely look forward to the weeks, months, years ahead when none of the fire and brimstone predictions comes to pass," said Jonathan Spalter, head of the trade group USTelecom, on a call with reporters Wednesday.

But some of these companies have suggested they could charge some internet services more to reach customers, saying it could allow for better delivery of new services like telemedicine. Comcast said Wednesday it has no plans for such agreements.

Cable and mobile providers have also been less scrupulous in the past. In 2007, for example, the Associated Press found Comcast was blocking or throttling some file-sharing. AT&T blocked Skype and other internet calling services on the iPhone until 2009. They also aren't backing away from subtler forms of discrimination that favor their own services.

There's also a problem with the FCC's plan to leave most complaints about deceptive behavior and privacy to the FTC. A pending court case could leave the FTC without the legal authority to oversee most big broadband providers. That could leave both agencies hamstrung if broadband companies hurt their customers or competitors.

Critics like Democratic FTC commissioner Terrell McSweeny argue that the FTC won't be as effective in policing broadband companies as the FCC, which has expertise in the issue and has the ability to lay down hard-and-fast rules against certain practices.

Public outcry

Moffett and Nathanson, the analysts, said that they suspect the latest FCC rules to be short-lived. "These changes will likely be so immensely unpopular that it would be shocking if they are allowed to stand for long," they wrote.

There have been hundreds of public protests against Pai's plan and more than 1 million calls to Congress through a pro-net neutrality coalition's site. Smaller tech websites such as Reddit, Kickstarter and Mozilla put dramatic overlays on their sites Tuesday in support of net neutrality. Twitter on Wednesday was promoting #NetNeutrality as a trending topic. Other big tech companies were more muted in their support.

Public-interest groups Free Press and Public Knowledge are already promising to go after Pai's rules in the courts. There may also be attempts to legislate net neutrality rules, which the telecom industry supports. Sen. John Thune, a South Dakota Republican, on Tuesday called for "bipartisan legislation" on net neutrality that would "enshrine protections for consumers with the backing of law."

But that will be tough going. Democrats criticized previous Republican attempts at legislation during the Obama administration for gutting the FCC's enforcement abilities. Republicans would likely be interested in proposing even weaker legislation now, and Democrats are unlikely to support it if so.

Some Democrats prefer litigation and want to use Republican opposition to net neutrality as a campaign issue in 2018. "Down the road Congress could act to put in place new rules, but with Republicans in charge of the House, Senate, and White House the likelihood of strong enforceable rules are small," Rep. Mike Doyle, a Pennsylvania Democrat, wrote on Reddit last week. "Maybe after the 2018 elections, we will be in a stronger position to get that done."

A future FCC could also rewrite net-neutrality regulation to be tougher on the phone and cable industry. That could bring a whole new cycle of litigation by broadband companies.

The Associated Press contributed reporting. 

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• Federal Communications Commission
• Ajit Pai