FCC Chairman Pai unveils net neutrality agenda, seeks to reclassify broadband as an information service

FCC Chairman Ajit Pai laid out his proposal overturn the current net neutrality rules, aiming to return to what he said is a light-touch regulatory regime that would reclassify broadband as a Title I information service.

Pai told attendees during his speech at Newseum in Washington, D.C., that the Title II classification instated under former Chairman Tom Wheeler depended on antique rules that were imposed on the former Bell System. That regulatory framework gave Bell the freedom to operate as a monopoly in exchange for providing universal telephone service.

“The FCC, on a party-line vote, decided to impose a set of heavy-handed regulations upon the internet,” Pai said. “It decided to slap an old regulatory framework called 'Title II'—originally designed in the 1930s for the Ma Bell telephone monopoly—upon thousands of internet service providers, big and small. It decided to put the federal government at the center of the internet.” 

He said that the proposed Title I classification—which came out of the Clinton administration-era 1996 Telecommunications Act—“was expressly upheld by the Supreme Court in 2005, and it’s more consistent with the facts and the law.”

By repealing the Title II classification, the FCC would also restore the Federal Trade Commission’s (FTC’s) authority to oversee broadband providers’ privacy practices. 

RELATED: FCC’s Pai crafts new ideas to overturn net neutrality rules

Besides doing away with Title II classification, Pai is seeking to get rid of what Pai’s predecessor Tom Wheeler called the internet conduct standard.

The 2015 net neutrality rules established a "standard for future conduct," with the rationale being that because the internet is always evolving, "there must be a known standard by which to determine whether new practices are appropriate or not. Thus, the proposal would create a general open internet conduct standard that ISPs cannot harm consumers or edge providers."

Pai said the internet conduct standard “rule gives the FCC a roving mandate to micromanage the internet.”

He cited the investigation into free-data programs, which is where wireless operators like T-Mobile offered their customers the ability to stream music, video, and the like free from any data limits. 

“Following the presidential election, we terminated this investigation before the FCC was able to take any formal action,” Pai said. “But we shouldn’t leave the internet conduct standard on the books for a future Commission to make mischief.”

The regulator also wants comments on how it should approach the so-called bright-line rules adopted in 2015 that were based on three main principles: No blocking, no throttling and no paid prioritization.

An open process

While the NPRM is going to stir up rabid debate between FCC members, traditional telcos and industry advocacy groups that disagree with the new commission’s stance, Pai said he wants to make the review process a transparent one.

Pai said plans to publicly release the Notice of Proposed Rulemaking (NPRM) document tomorrow and vote on it during the Commission’s May meeting. If the NPRM is adopted, the FCC will seek public input on the proposal. 

“Two years ago, the FCC hid the Title II Order from the American people until after it had been adopted,” Pai said. “Only a favored few were given special access to it and were able to make major changes to it.”

Pai added that while “you may agree or disagree with the proposal, but you’ll be able to see exactly what it is.”

At the same time, Pai said his administration won’t seek a Declaratory Ruling which would allow the FCC to reverse Title II immediately.

Pai said that “I don’t believe that is the right path forward, adding that the “decision should be made through an open and transparent process in which every American can share his or her views.”

Telcos, industry groups diverge

Chairman Pai’s proposal is already being met with support from traditional wireline telcos and their advocacy groups like USTelecom and TIA, while competitive advocacy groups said the move could stifle freedom of choice for consumers and businesses.

Michael Copps, former FCC Commissioner and Common Cause special advisor, accused Chairman Pai of bending to the will of large cable and telecom providers.

“By reopening the FCC’s historic 2015 Open Internet Order, the FCC is jeopardizing core protections for online free speech and competition,” said Copps in a statement. “Chairman Pai appears more interested in currying favor with cable and telecom industry lobbyists than in serving the millions of Americans who wrote and called to urge the commission, during the original rulemaking, to provide strong protections against online blocking, throttling or censorship.”

Chip Pickering, the CEO of INCOMPAS, and a former Republican Member of Congress who led the effort in 2006 to pass the first Open Internet protections into law, said that its hopeful it can help uphold the net neutrality principles that let consumers access the internet freely.

“We believe the risks of FCC action far outweigh any reward, thankfully, Chairman Pai will conduct a public comment period, and we are willing to work with all stakeholders to achieve and maintain objectives that protect a free and open internet,” Pickering said. “But INCOMPAS will fight and oppose any effort to harm Americans’ abilities to access the content of their choice and weaken the most successful economic and free expression policy in American history.”

Not surprisingly, CenturyLink and USTelecom, an advocate of large telcos, applauded Pai’s proposal.

CenturyLink, which will become the second largest wireline-based business provider when it completes its acquisition of Level 3, said Pai’s action will give service providers greater freedom to invest capital in their networks.  

“Removing overly onerous Title II regulation is a logical first step forward that will encourage network investment,” CenturyLink said in a statement. “We look forward to reviewing the FCC’s open internet proposal and working with policymakers to put an end to the uncertainty that has plagued the open internet issue for years.”

Jonathan Spalter, CEO of USTelecom, said that while ISPs support a free and open internet, eliminating Title II will breathe new life into the telecom industry.

“Removing restrictive Title II regulations from broadband providers puts consumers, innovators, engineers and entrepreneurs—not the government—back in the broadband driver’s seat,” Spalter said in a statement. “This is an important step toward leveling the playing field for all innovators, increasing broadband access for all Americans, and stoking the engine of innovation and investment again for all our communities.”