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F.C.C. Invokes Internet Freedom While Trying to Kill It

Here we go again. The Federal Communications Commission, now led by an anti-regulation ideologue appointed by President Trump, wants to gut the net neutrality rules that keep powerful broadband companies from calling the shots on the internet, at the expense of consumers.

Under the cynical guise of "restoring internet freedom," the new F.C.C. chairman, Ajit Pai, wants to give big telecom companies carte blanche to treat the content of their subsidiaries and partners more favorably than information from other companies – a practice that AT&T, Comcast and Verizon are already starting to employ. They would also be able to demand fees from companies like Netflix and YouTube to deliver videos and other content to customers.

If the commission, which has a 2-to-1 Republican majority, approves Mr. Pai's proposal, there will be little stopping the broadband industry from squelching competition, limiting consumer choice and raising prices. The previous F.C.C. chairman, Tom Wheeler, helped put the rules Mr. Pai is attacking in place in 2015, and the United States Court of Appeals for the District of Columbia Circuit upheld them last year.

Mr. Pai argues that existing regulations are hurting the internet. He said that the 12 largest internet service providers reduced investment by 5.6 percent between 2014 and 2016 because the net neutrality rules were too onerous. But he is cherry-picking data to make his case. Free Press, a public-interest group that supports net neutrality, found that total investment by publicly traded broadband companies increased 5.3 percent between 2013-14 and 2015-16.

Large telecommunications companies have been raking in profits in recent years. And they have been making multibillion-dollar acquisitions – not something you see from an industry that is withering from senseless regulations. Charter spent more than $65 billion last year to buy Time Warner Cable and Bright House Networks. AT&T bought DirecTV for $48.5 billion in 2015 and is trying to buy Time Warner, the media company, for $85 billion.

Not only is Mr. Pai's lament for the broadband industry based on alternative facts, it misses the bigger point. Net neutrality is meant to benefit the internet and the economy broadly, not just the broadband industry. That means the commission ought to consider the impact the regulations have on consumers and businesses. In particular, the commission has a responsibility to protect people with few or no choices; most Americans have access to just one or two companies for residential service and just four big operators for wireless.

Mr. Pai argues that if the Wheeler rules are revoked, some safeguards will remain. For example, he says, broadband companies would refrain from blocking or slowing the content of competitors. He has not said how he would ensure that. But the F.C.C. is considering using voluntary commitments from the industry.

Under that approach, officials at the Federal Trade Commission would have the power to fine or sue companies that make pledges and then fail to uphold them. But it is hard to believe that voluntary standards would be strong enough. It also puts the onus on individuals and small businesses to complain to regulators and request investigations.

Under Mr. Pai's proposal, broadband companies would probably use their gatekeeping position to give themselves a leg up. AT&T, for example, already encourages people to buy the streaming video service of its DirecTV subsidiary by allowing customers to watch it on AT&T's wireless network without incurring data charges. Verizon and Comcast have similar practices. Over time, such corporate policies will make it harder for smaller companies to compete with the telecom giants.

Big internet businesses like Amazon, Facebook, Google and Netflix will probably be fine under Mr. Pai's plans, because they are well established and have the money to cut special deals with broadband companies.

Smaller firms and start-ups – some of which may never get started – will not be as lucky.

Ultimately, though, the real losers will be all Americans, because there will be fewer choices and less innovation.

[Source: By The Editorial Board, The New York Times, 29Apr17]

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small logoThis document has been published on 02May17 by the Equipo Nizkor and Derechos Human Rights. In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.