Net Neutrality Repeal: What Could Happen and How It Could Affect You

What Might Happen?

The biggest concern is that the internet will become pay-to-play technology with two tiers: one that has speedy service and one that doesn’t. The high-speed lane would be occupied by big internet and media companies, and affluent households. For everyone else there would be the slow lane.

The brand-name internet companies like Google, Facebook, Amazon and Netflix, analysts say, will comfortably be able to pay the higher rent. It will not affect their business, though it may crimp their profits. Avoiding higher prices is one reason the major internet companies have been champions of net neutrality.

But higher prices may be prohibitive for start-up companies and new voices in the media and entertainment worlds. W. Kamau Bell, a comedian and host of the CNN documentary series “United Shades of America,” recently described in The New York Times how the internet is so often the path to popular and commercial success for newcomers. They upload a video and it goes viral.

That will no longer be true, Mr. Bell wrote, without net neutrality rules that “ensure that anyone who puts something on the internet has a fair shot at finding a life-changing audience.”

The government-backed guarantee of equal access is why public interest groups, nongovernmental organizations, charities and millions of private citizens wrote to the F.C.C. in support of the net neutrality rules.

But the broadband and telecom companies — and some economists — say that the freedom to charge different prices for different products and services is vital to healthy markets. That kind of “price discrimination,” they say, is the fuel of innovation and efficiency.

In a public comment earlier this year to the F.C.C., AT&T called the Obama-era rules “an unprecedented regulatory overreach for which there is no economic or marketplace justification.”

The F.C.C. rules mandated net neutrality principles under a utility-style telecommunications law, called Title 2, that dates to 1934. The carriers fear that it all but ensures price regulation.

“What they really object to is Title 2, not the net neutrality principles,” said Craig Moffett, an independent analyst.

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Major telecommunication and broadband companies including Comcast have argued that the internet should not be subject to utility-style government regulation. They say that reduces their incentives to invest and improve service. But supporters of net neutrality rules say repeal will give internet providers too much power. Credit Cindy Ord/Getty Images for Comcast

So Whom Do You Trust?

The answer, like so many these days, is politically charged. The repeal reflects the conservative backlash against government regulation, which has been a hallmark of the Trump administration.

Tim Wu, a law professor at Columbia University who is credited with coining the phrase “net neutrality,” said the repeal plan not only rolls back the Obama-era rules, it goes further. It specifically permits broadband carriers to block media content, Mr. Wu said, an added power which was not the case during the administration of George W. Bush.

“An allowance of blocking is really pretty shocking.” Mr. Wu said in an email.

Yet if government is in retreat, then consumers are left to trust the behavior of the internet-access companies like Charter and AT&T. In their filings with the F.C.C., the companies have claimed that faith would be well founded. Market incentives, Charter told the F.C.C., push the companies to provide the best service to its customers, catering to consumer demand.

Charter said it voluntarily adheres to net neutrality principles, and will continue to do so. “We do not block, throttle, or otherwise interfere with the online activity of our customers,” the company said.

But a weakness in the free-market argument, industry analysts say, is that in some regional and rural markets, households have only one internet provider available to them. That undermines the theory that competition will protect consumers.

Roger L. Kay, an independent technology analyst, predicted that larger bills — not content blocking — would be the most likely result. If the big internet and media companies will have to pay their carriers more for high-speed services, the expenses will trickle down to households.

Consumers, Mr. Kay said, “will end up paying higher prices for essentially the same service.”

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Net Neutrality Hits a Nerve, Eliciting Intense Reactions

But none of that has overshadowed the heated reaction to the agency’s proposal.

“There doesn’t seem to be middle ground on this issue,” said John Beahn, a lawyer at Skadden Arps who specializes in regulation.

At the center of the debate is whether telecom companies like AT&T and Verizon should be able to charge internet sites for delivering their data to consumers’ homes. In 2015, the F.C.C. voted to prohibit those charges, in a policy often called net neutrality.

But Mr. Pai, a Republican nominated for the chairmanship by President Trump, said the regulations were heavy-handed and prevented telecom companies from pursuing new business models. His proposal, by stripping away the existing rules, would allow telecom companies to charge websites to deliver their data at higher speeds.

In a speech on Tuesday, Mr. Pai addressed some of the concerns that have been voiced since he released his proposal, pointing specifically to comments by celebrities like Cher and Kumail Nanjiani of “Silicon Valley.” He said their tweets warning that his rules would lead to authoritarianism and a handout to big cable companies were “utterly absurd.”

“I’d like to cut through hysteria and hot air and speak in plain terms about the plan,” Mr. Pai said, adding that the plan would bring back the regulation-free policy that helped the internet thrive. He said big tech companies might be a bigger threat to online speech than telecom companies.

The proposal is expected to be approved at a meeting of the five F.C.C. commissioners on Dec. 14. The two other Republican commissioners have already expressed their support for Mr. Pai.

The 2015 rules also elicited strong interest. The F.C.C. site was overwhelmed with comments after a monologue from the late-night host John Oliver went viral online. Some people who wanted the stronger rules blocked the driveway of the chairman at the time, Tom Wheeler, to try to persuade him to change the agency’s plan.

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Big web companies like Google and Netflix played activist roles as well, supporting the stronger rules. They argued that telecom companies should not be able to split sites into fast lanes and slow lanes, because that would allow them to become a sort of gatekeeper for information and entertainment. In addition, they say, it would hurt start-ups without the money to pay for the faster lanes.

Mr. Pai, who opposed the rules as a commissioner in 2015, gave broad outlines of his plans early this year. For months, comments to the F.C.C. website piled up, to more than 20 million. President Barack Obama’s clean power plan, perhaps his biggest policy change at the Environmental Protection Agency, attracted 4.3 million comments over six months.

But the intensity has increased even more since Mr. Pai released the details of the proposal — perhaps in part because few people expected him to try to strip all of the existing rules.

“We never expected this,” wrote Craig Moffett, an analyst at the research firm MoffettNathanson.

Lawmakers, celebrities, founders of start-ups and consumers have continued to hash out the debate into this week.

Conservative groups like FreedomWorks and the Competitive Enterprise Institute praised the rollback. The radio host Rush Limbaugh defended Mr. Pai’s plan on Monday in an online post. He dismissed concerns by supporters of the rules, whom he described as liberal “millennials and tech bloggers.”

“What the tech bloggers and the left don’t like is that there are options and that there is a freedom in the marketplace and that people can choose superior service if they’re willing to pay for it,” Mr. Limbaugh said. “And if somebody’s willing to pay for superior service, the providers had better provide it.”

Public interest groups like Free Press and organizations like Mozilla, the nonprofit behind the popular Firefox browser, said they were prepared to file suit against the plan as soon as the vote on Dec. 14.

“The action hit a nerve because the internet is central to the vast majority of people’s daily lives, and so people were very eager to understand what was happening over the weekend,” said Denelle Dixon, chief legal officer for Mozilla.

The reaction from the biggest tech companies, however, has been noticeably subdued. Instead of forceful pleas from their executives, like those in years past on this issue, they are largely speaking through their trade group, the Internet Association, which has expressed disappointment over Mr. Pai’s plan.

“Internet companies are firm supporters of the 2015 Open Internet Order and will continue our push for strong, enforceable net neutrality rules going forward,” said Noah Theran, a spokesman for the Internet Association. “We are reviewing the draft order and weighing our legal options.”

Taking their place are start-ups such as Airbnb, Twitter and Reddit, which joined dozens of smaller start-ups on Monday warning Mr. Pai that the rules would hurt innovation and the economy.

Sorting out the real individual commenters from fake or automated accounts is far more tricky. The F.C.C. said it did not have the resources to investigate every comment on its site.

Eric Schneiderman, the New York attorney general, said that after a six-month investigation, his office had found that the identities of tens of thousands of state residents were fraudulently used to post comments to the F.C.C.

“If law enforcement can’t investigate and (where appropriate) prosecute when it happens on this scale,” Mr. Schneiderman said, “the door is open for it to happen again and again.”

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F.C.C. Approves Net Neutrality Rules, Classifying Broadband Internet Service as a Utility

Before the vote, each of the five commissioners spoke and the Republicans delivered a scathing critique of the order as overly broad, vague and unnecessary. Ajit Pai, a Republican commissioner, said the rules were government meddling in a vibrant, competitive market and were likely to deter investment, undermine innovation and ultimately harm consumers.

“The Internet is not broken,” Mr. Pai said. “There is no problem to solve.”

The impact of the new rules will hinge partly on details that are not yet known. The rules will not be published for at least a couple of days, and will not take effect for probably at least a couple of months. Lawsuits to challenge the commission’s order are widely expected.

The Faster the Internet, The Fewer the Choices

Three-quarters of households have the choice of only one broadband provider while only a quarter have at least two to choose from.

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The F.C.C. is taking this big regulatory step by reclassifying high-speed Internet service as a telecommunications service, instead of an information service, under Title II of the Telecommunications Act. The Title II classification comes from the phone company era, treating service as a public utility.

But the new rules are an à la carte version of Title II, adopting some provisions and shunning others. The F.C.C. will not get involved in pricing decisions or the engineering decisions companies make in managing their networks. Mr. Wheeler, who gave a forceful defense of the rules just ahead of the vote, said the tailored approach was anything but old-style utility regulation. “These are a 21st-century set of rules for a 21st-century industry,” he said.

Opponents of the new rules, led by cable television and telecommunications companies, say adopting the Title II approach opens the door to bureaucratic interference with business decisions that, if let stand, would reduce incentives to invest and thus raise prices and hurt consumers.

“Today, the F.C.C. took one of the most regulatory steps in its history,” Michael Powell, president of the National Cable and Telecommunications Association and a chairman of the F.C.C. in the Bush administration, said in a statement. “The commission has breathed new life into the decayed telephone regulatory model and applied it to the most dynamic, freewheeling and innovative platform in history.”

Supporters of the Title II model include many major Internet companies, start-ups and public interest groups. In a statement, Michael Beckerman, president of the Internet Association, which includes Google, Facebook and smaller online companies, called the F.C.C. vote “a welcome step in our effort to create strong, enforceable net neutrality rules.”

The F.C.C.’s yearlong path to issuing rules to ensure an open Internet precipitated an extraordinary level of political involvement, from grass-roots populism to the White House, for a regulatory ruling. The F.C.C. received four million comments, about a quarter of them generated through a campaign organized by groups including Fight for the Future, an advocacy nonprofit.

Evan Greer, campaign director for Fight for the Future, said, “This shows that the Internet has changed the rules of what can be accomplished in Washington.”

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Supporters of net neutrality rallied on Thursday outside the F.C.C. building. Credit Gabriella Demczuk for The New York Times

An overwhelming majority of the comments supported common-carrier style rules, like those in the order the commission approved on Thursday.

In the public meeting, Mr. Wheeler began his remarks by noting the flood of public comments. “We listened and we learned,” he said.

In November, President Obama took the unusual step of urging the F.C.C., an independent agency, to adopt the “strongest possible rules” on net neutrality.

Mr. Obama specifically called on the commission to classify high-speed broadband service as a utility under Title II. His rationale: “For most Americans, the Internet has become an essential part of everyday communication and everyday life.”

Republicans in Congress were slow to react, and initially misread the public mood. Senator Ted Cruz of Texas portrayed the F.C.C. rule-making process as a heavy-handed liberal initiative, “Obamacare for the Internet.”

In January, Senator John Thune, the South Dakota Republican, began circulating legislation that embraced the principles of net neutrality, banning both paid-for priority lanes and the blocking or throttling of any web content. But it would also prohibit the F.C.C. from issuing regulations to achieve those goals. This week, the Republicans pulled back, with too little support to move quickly.

Also at the Thursday meeting, the F.C.C. approved an order to pre-empt state laws that limit the build-out of municipal broadband Internet services. The order focuses on laws in two states, North Carolina and Tennessee, but it would create a policy framework for other states. About 20 states, by the F.C.C.’s count, have laws that restrict the activities of community broadband services.

The state laws unfairly restrict municipal competition with cable and telecommunications broadband providers, the F.C.C. said. This order, too, will surely be challenged in court.

Correction: February 26, 2015
An earlier version of this article misstated the role of the F.C.C. under the new rules in pricing and engineering decisions companies make for their networks. The F.C.C. will not get involved in those decisions; it is not the case that they will get involved.

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