Last week, CDT submitted comments to the FCC concerning its proposal to roll back the net neutrality protections established under the 2015 Open Internet Order (OIO). The comments are a direct response to the Notice of Proposed Rulemaking (NPRM) released by FCC Chairman Ajit Pai, which details the formal basis for the repeal. Our analysis details our concerns about the legal and policy rationale for the NPRM, highlighting the lack of legal authority for the proposal and the practical policy consequences for internet users and internet-based companies. In this post, we summarize the reasoning behind our comment, which can be found here.
The NPRM does not show a causal relationship between the OIO and a decline in network infrastructure investment.
First, while the repeal is premised on the idea that the implementation of the OIO led to an alleged decline in broadband network investment, the NPRM does not show any causal relationship between the two. While the NPRM cites to three separate studies, none of the studies actually substantiate the claim made by the FCC. In fact, as one of the cited studies and the NCTA point out, the OIO has not been in place for long enough to evaluate this assertion. Because infrastructure is expensive and time-consuming to build, the decision to invest is typically made years in advance, and likely precedes the two-year tenure of the net neutrality rules. Moreover, internet service providers (ISPs) have explicitly stated that the rules and requirements of the OIO had no effect on their investment decisions.
The repeal of the OIO will impose real costs on users, internet-based companies, and the internet itself.
Second, the implementation of the NPRM would benefit ISPs at the expense of users, edge providers, and the general internet ecosystem. By stripping users and internet-based companies of necessary net neutrality protections in monopoly markets, ISPs will be allowed to leverage their dominant position to distort the market. Without these protections, an ISP may block or slow down access to internet-based companies to drive traffic to its own services, effectively suffocating access to internet users. And if internet-based companies are able to develop a successful application, the ISP may levy tolls and taxes on the product through paid prioritization. Ultimately, these practices will discourage innovation and impede economic growth by making it more difficult for internet users and internet-based companies to develop, market, and access new ideas.
The FCC also proposes ceding oversight of the privacy practices of ISPs to the FTC, vesting exclusive oversight of these practices in an agency with narrower authority and fewer resources than the FCC. Under Section 5 of the FTC Act, the FTC can provide some degree of consumer protection, but the agency lacks the FCC’s comprehensive authority to protect user privacy and its ability to prevent potential harms through administrative rulemaking. Additionally, the FTC has limited staff and lacks the subject matter expertise of the FCC. As a result, under reclassification, the responsibility to safeguard the privacy of internet users would shift from a specialized agency with deep expertise in telecommunications policy to an agency with greater constraints on staff resources and limited experience in the field.
There is no legal basis for the reclassification of broadband internet as a Title I information service.
Furthermore, the FCC reclassifies broadband internet as an information service under Title I of the Communications Act in direct conflict with both the plain meaning and intent of the statute. More specifically, the NPRM collapses the functions provided by broadband internet service with those frequently provided by internet-based companies. But as famously illustrated by Justice Scalia in his dissent in NCTA v. Brand X, there is a clear distinction between the telecommunications services that provide a high-speed connection to the internet and information services like email and cloud storage — a distinction that is reflected in our expectations as consumers. Internet users do not rely on their ISP to provide the necessary code to share a post through social media or listen to music on streaming services. Instead, the ISP serves as a mere conduit, providing access to a capability, but not the capability itself.
Nevertheless, the FCC attempts to justify reclassification through a creative form of statutory interpretation, asserting that internet users do not “specify the ‘points’ between and among which information is sent online” in a manner consistent with a telecommunications service. However, this clashes with our everyday experiences with these services and the statutory definition of the term. The definition of telecommunications has never required users to specify information about the routing or handling of transmissions on the way to its endpoint. For example, making a phone call does not require the caller to know where the recipient of the call is located or the route it takes to reach the recipient. Similarly, when internet users want to access a website, they simply state where they want their information to be sent in the form of a URL — knowledge of the specific geographic location of the content is wholly unnecessary.
The FCC does not identify the source of the alleged burdens and uncertainty that stem from the implementation of the OIO.
Finally, despite repeated references to burdens and uncertainties imposed by the OIO, the NPRM does not detail what those burdens are or how exactly the OIO creates uncertainty. From a regulatory policy perspective, the FCC has an obligation to describe what parts of the OIO are burdensome and explain why reclassification is the best option to address the issue. And while the FCC expresses concerns about BIAS providers facing “regulatory uncertainty,” reclassification would only exacerbate this problem by forcing ISPs, consumers, and internet-based companies to adjust to a new policy regime based on a questionable legal rationale.
The OIO simply enshrined the principles that have guided the development of the internet into law. It provided the FCC with an explicit grant of authority to preserve the open nature of the internet, reinforcing the implicit promise of broad accessibility with legal force. If the FCC moves forward with repeal, ISPs will be allowed to construct artificial barriers to entry to new ideas, stifling innovation and transforming the internet from an open marketplace into a walled garden. With this in mind, the FCC should reject the NPRM.