Policy

FCC Eyes Repeal of Net Neutrality, Dividing Internet Industry

Proposed changes have drawn more than 1.6 million public comments

FCC Chairman Ajit Pai says net neutrality has adversely affected broadband investment after it took effect two years ago. (Bill Clark/CQ Roll Call file photo)

Ahead of a Federal Communications Commission vote Thursday to begin the process of rolling back Obama-era net neutrality regulations that treat internet traffic equally, battle lines are being drawn between internet service providers and giants like Google and Amazon.

The agency is expected to also decide Thursday on returning online privacy oversight to the Federal Trade Commission, whose rules are less onerous than the FCC’s that require internet service providers to obtain permission in advance before selling customers’ personal data to advertisers.

When the FCC issued its 2015 Open Internet Order, it subjected internet service providers to heavier regulation under Title II of the Communications Act, which originally applied to telephone companies

The proposed changes to that rule have provoked a deluge of public sentiment, drawing more than 1.6 million public comments to date, both pro and con. Net neutrality requires internet providers to treat customers equally in terms of price and connection speeds, which affects websites such as Amazon that offer streaming services.

FCC Chairman Ajit Pai and internet providers such as Comcast and Verizon say net neutrality crimped broadband investment after it took effect two years ago.

Although net neutrality also raises broader issues pertaining to privacy, freedom of expression and the ability to innovate, proponents of repealing net neutrality say a “lighter touch” regulatory regime would spur more investment to build out the internet’s connection speeds and reach into rural areas.

But the Internet Association, a trade group representing Amazon, Facebook, Google and other big internet firms ranging from Airbnb to Zynga, rebutted those arguments Wednesday by issuing preliminary economic findings that the group says show healthy growth for internet providers.

“Efforts to replace the 2015 Open Internet Order are not based on economic fact,” the Internet Association said.

The group said its research shows internet providers “continue to invest and innovate at similar or greater levels in the current regulatory environment.”

For instance, the association said, investments by publicly traded telecommunications firms increased 5.3 percent or $7.3 billion between 2013-14 and 2015-16. Cable and broadband infrastructure investment combined increased to $250 billion in 2016, up from $237 billion in 2015, it said. The association said its findings are based on publicly available data from internet service providers or trade groups.

“By multiple, independent metrics, ISP claims of depressed investment don’t mesh with reality,” the Internet Association report said. “From actual capital expenditure numbers, to patents, to prices, Title II has not had the effects that ISPs claim.”

However, the United States Telecom Association, which represents large internet providers such as Verizon and AT&T, disputed the Internet Association’s preliminary findings.

“We look forward to reading the full report because the Internet Association’s preliminary findings are a mish-mash of time periods and sources without backup,” a USTelecom spokeswoman said in a statement. “Our annual report on broadband investment … showed investment dropped by $1 billion in 2015, and our preliminary look at 2016 capital expenditures suggests that slide continued.”

For example, according to USTelecom, the Internet Association cited a 58.4 percent increase in telecom patent applications, but the period cited was 2010 to 2012, long before the net neutrality regulations were imposed.

Get breaking news alerts and more from Roll Call on your iPhone or your Android.