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What Exactly Is Net Neutrality?

By:Christine Fettinger

The FCC’s vote for net neutrality is December 14th and it looks like very little can be done to stop the Title II regulations on internet service providers (ISPs) from being thrown out.

The members of the FCC are expected to vote along party lines, with a 3-2 vote in favor of Pai’s plan.

Net Neutrality

FCC chair, Ajit Pai, wants to replace net neutrality with requirements that ISPs be transparent about their practices. No legal mandate would require them to include net neutrality promises, although they would have to disclose if they do block access, slow down or speed up services.

What does this mean?

ISPs would essentially be able to decide for themselves whether to follow net neutrality principles or not. Ajit Pai’s plan eliminates the legal justification for net neutrality rules. Blocking, throttling, and paid prioritization, the cornerstones of net neutrality, are not banned in this new plan. However, ISPs would be required to publicly disclose if they block, throttle, or prioritize online content.

This public disclosure of previously prohibited practices is supposed to allow consumers the ability to make more informed decisions about their internet provider. Theoretically, if your ISP is engaging in a practice you do not agree with, then you could take your business to another provider.

Unfortunately, it is not that simple for most of America. Broadband service is simply not competitive enough. Only 22% of developed areas in America have 2 or more providers to choose from. Even armed with knowledge that your ISP is engaging in anti-net neutrality practices, switching providers is not an option for people in many areas of the country. This places a large amount of faith and trust in ISPs that operate for profit.

Also, if ISPs manage to classify things like throttling a ‘reasonable network management,’ which they have done before, they won’t have to share it publicly.

This plan places more power in the hands of the Federal Trade Comission (FTC) instead of the FCC. The FTC has the authority to prevent deceptive and unfair practices, but it is a smaller agency with a more limited authority and less punitive power than the FCC. It cannot create hard and fast rules that ISPs must follow. ISPs will still be beholden to anti-trust and consumer laws.

If Title II is thrown out, it would be harder for the FTC to respond to complaints filed by businesses. Individual internet customers have contractual agreements with ISPs, but online content providers may not. Complaints filed by businesses whose websites are blocked or throttled would fall more into an antitrust framework instead of the authority of the FTC. Currently, both consumers and businesses can complain to the FCC about violations or behavior that harms an ISP’s customers or competitors.

What Is Title II?

Title II is a utility style regulation that was created by Congress in 1934 to regulate AT&T’s telephone monopoly. In 2015, the FCC began classifying both home and mobile broadband as a telecommunications service, meaning that ISPs would be regulated as common carriers under Title II.

However, the FCC could pick and choose which parts of Title II to apply to ISPs and the most onerous restrictions were not imposed. The FCC forbore things like rate of return price regulations and tariffs from consumer broadband.

The core of Title II was used to prohibit ISPs from blocking or throttling lawful Internet content and prohibit paid prioritization. These are the main principles of net neutrality. It creates a fair playing field for businesses, from start-ups to behemoths like Netflix, and for those who surf the internet – aka everyone. No one likes dealing with a slow connection. ISPs could hypothetically pick and choose which websites to load faster or slow down, which would influence consumer habits a lot. Giant ISPs like AT&T, Comcast, and Verizon could start favoring online content and services they own over competitors. Major companies like Netflix, Amazon and Google may be able to negotiate deals, but smaller start-ups do not have the clout or money to play this game, which could stifle competition.

Title II was also used to increase consumer protections. Under Title II, ISPs must be ‘just and reasonable’ in their rates and practices. They cannot make any unjust or unreasonable discrimination in rates, practices, or offerings of services. Title II expanded the FCC’s pre-existing transparency rules by requiring public disclosures of data caps and hidden fees to be more prominent and clear. In 2016, the FCC came up with broadband ‘nutrition labels’ of fees, data caps, and network performance that would be easier for consumers to understand and help ISPs comply with the expanded transparency rules.

Why Is It Important to Net Neutrality?

Before Title II, the FCC essentially had no teeth in enforcing net neutrality principles. They lost in court when net neutrality principles were challenged.

In 2010, for example, the FCC imposed rules against blocking, throttling, and paid prioritization with authority under Title I, but Verizon challenged those rules. They won. The rules were thrown out by a federal appeals court. The court said that the FCC was imposing common carrier regulations on ISPs without declaring them common carriers. This court case meant that if the FCC wanted strong, enforceable protection on net neutrality then ISPs would have to be regulated under Title II as common carriers, not Title I.

Is This Decision Permanent?

Not necessarily. The FCC could choose to regulate ISPs under Title II again. However, it is not going to happen under this administration. A future Democratic FCC chair could put the Title II rules back on the books, as former Chairman Tom Wheeler did in the Obama era.