The Federal Communications Commission on May 8 denied a request from a group of cable companies, ISPs and industry groups, including US Telecom and CTIA, to delay implementation of the order placing those groups under Title II of the Communications Act.
Title II is the portion of the law that governs the operations of landline telephone companies. The reclassification would force ISPs to accept the FCC’s net neutrality rules.
The petition was filed with the FCC asking the agency to hold off on Title II until the courts have heard the various lawsuits alleging that the FCC acted improperly when it adopted its Open Internet order.
The FCC, as you might expect, disagreed that it has acted improperly and it didn’t agree with the petitioners’ assertion that the lawsuits were likely to be successful, which is normally a requirement for the FCC issuing a stay in implementation.
What this means is that net neutrality will go forward as part of the Title II change while the court challenges from the carriers and others go on simultaneously. This, of course, assumes that one or more of the lawsuits doesn’t also result in a court-ordered stay that would keep the commission from actually implementing Title II.
Such a stay is possible, and perhaps even likely. Two major cable associations have already indicated that they will request stays with the appeals courts, according to reports in Broadcasting & Cable. The reason that the stay may be likely is partly due to the FCC’s checkered past in regards to net neutrality and partly because some of the cable and wireless companies may be able to show harm.
At least one member of the FCC indicates that he already sees harm. Commissioner Ajit Pai said in remarks to the International Institute of Communications in London that the Title II move would cause a reduction in investment in the Internet, among other problems.
“It will lead to less investment, less competition, slower speeds and higher prices for consumers,” Pai said. “And it was entirely unnecessary. The Internet was open and vibrant before the FCC acted. Or to put it another way, the Internet wasn’t broken. The U.S. government didn’t need to fix it.”
Commissioner Pai explained his concerns a few weeks earlier when providing testimony to Congress on the Title II move. “Reclassifying broadband, applying the core of Title II rules and half-heartedly forbearing from applying the rest ‘for now’ or ‘at this time’ (as the Order suggests) will drive smaller competitors out of business and leave the rest in regulatory vassalage,” Pai suggested.
“Monopoly rules designed for the monopoly era will inevitably move us in the direction of a monopoly. In that regard, this plan is little more than a Kingsbury Commitment for the digital age,” Pai said.
FCC Rejects Net Neutrality Delay, but Court-Ordered Stay Possible
The problem doesn’t appear to be that the carriers, ISPs and associations object to net neutrality per se. The real problem and the one that may already be causing concern among Internet companies is the fact that Title II wasn’t really intended to apply to the Internet. Title II was written to regulate landline telephone companies as a way to make sure that they didn’t use their monopoly power (which they still have in most places) to discriminate unfairly.
Because Title II was written for a heavily regulated communications business environment, it also included regulations that are totally inappropriate for Internet providers, including things like rate setting. In its Open Internet order, the FCC said it would forbear from imposing those regulations, thus relieving the Internet from such limitations.
But it’s this promise of forbearance that poses a risk to ISPs. Just as the FCC can decide to forbear from imposing such regulations, the agency can also change its mind. A different FCC with different members can change things if they so desire.
While the federal Administrative Procedures Act includes rules that the FCC and other agencies are supposed to follow when they make such changes, those same agencies have been known to play fast and loose with the rules when it suits them.
While the FCC would certainly issue formal notices of proposed rulemaking and it would certainly request comments, the agency has in the past adopted rules that were far different from what was originally proposed and commented on when it suited its purposes, including the current net neutrality rules.
While it’s true that FCC Chairman Tom Wheeler has repeatedly said that the Open Internet order won’t be changed, the fact is that he doesn’t know this to be true. The reason is simple—once the FCC chairman steps down, so does control over the FCC agenda. Wheeler, as is the case with all other chairmen before him, can’t predict nor can he control the future.
Of course, what may happen is that net neutrality legislation currently making its way through Congress will eventually be voted out of committee and voted on by the full House of Representatives and Senate. If the president signs it, the FCC can’t change regulations established by legislation. While President Barack Obama probably won’t sign a bill that changes things too much, he’s only going to be president for two more years.
As you probably know by now, two years is no time at all in Washington. When the next administration takes office, if some kind of net neutrality legislation isn’t already in place, there’s absolutely no way to assure the ISPs that things won’t change, and given the mood in Washington, there’s every reason to believe that things will change—unpredictably.