FCC Kills Net Neutrality Rules, Hands Internet Back to FTC

The Federal Communications Commission is repealing Obama-era net neutrality regulations that gave the government oversight of internet service providers like Verizon, AT&T and Comcast.

After security staff briefly evacuated Thursday’s hearing, commissioners passed FCC Chairman Ajit Pai’s controversial “Restoring Internet Freedom” order on a 3-to-2 vote along party lines. The measure rolls back rules that prohibited broadband companies from prioritizing certain websites or users over others by charging more for faster speeds.

The decision comes after months of contentious debate between over how repealing the rules will impact the country’s online future and the legitimacy of public comments on the policy change.

Pai and deregulation proponents argue the measure will increase online competition and spur investment in broadband infrastructure. But internet freedom advocates say the rules are necessary to keeping the web free and open, and keeping major providers and platforms from stifling potential competition.

“The government shouldn’t be in the business of picking winners and losers in the internet economy,” Pai said at the hearing. “We should have a level playing field and let consumers decide who prevails.”

The plan will transfer authority over the internet back to the Federal Trade Commission, which was responsible for internet oversight before FCC took over in 2015. In a memorandum of understanding that went into effect after the repeal vote, Pai and Acting FTC Chairman Maureen Ohlhausen detailed how both agencies will work together to police the internet.

While the FCC is largely giving up its online authority, the agency will still be responsible for enforcing transparency rules for internet service providers, according to the MOU. The measure requires providers to publicly disclose information about their network management, performance and terms of agreement while eliminating previous transparency requirements the commission deemed “burdensome.”

The FTC will take charge of ensuring providers don’t engage in any deceptive, unfair or illegal practices that harm consumers, just as it does in other areas of the economy. FTC will also be responsible for enforcing rules related to the collection and sharing of personal data.

In the MOU, both agencies promised to coordinate efforts in investigations and enforcement actions, as well as public education efforts to teach people about provider practices.

After the vote, Ohlhausen said the FTC is prepared to “resume its role as the cop on the broadband beat,” but many others have called into question the agency’s ability to police the modern internet.

In a Quartz op-ed published last week, FTC Commissioner Terrell McSweeny highlighted the FTC’s lack of specialists in the telecommunications market, which could hamper efforts to keep internet service providers honest. And even if the agency finds a company engaged in harmful activities, she said, it could take years to legally put an end to them.

“Competitive pressure will not sufficiently limit harmful discriminatory conduct in these markets,” she said in a statement after the hearing. “After-the-fact antitrust and consumer protection enforcement by the FTC cannot substitute for clear upfront rules.”

FCC Commissioner Mignon Clyburn called the MOU between the two agencies “a confusing, lackluster, reactionary afterthought,” and said during the hearing that by shirking its responsibility to police the internet, the FCC won’t fully understand the consequences of its actions.

“This item ensures that the FCC will never be able to fully grasp the harm it may have unleashed on the internet ecosystem,” she said.

While many lawmakers condemned the commission’s decision repeal net neutrality rules, others said Congress should take up the mantle with bipartisan legislation.

“I favor Congress enacting net neutrality protections and establishing sensible limits on the power of regulators,” said Sen. John Thune, R-S.D., in a statement. “I call on Democrats and Republicans who want to preserve a free and open internet to work together on permanent consumer protections.”