This FCC has put its thumb on the scale in favor of the powerful broadband industry.
Today’s vote by the Federal Communications Commission (FCC) repealing its 2015 network neutrality rules will have an especially negative impact on online innovation. The rules prohibited broadband providers like Comcast, AT&T and Verizon from favoring or disfavoring any online content. Specifically, the rules prohibited broadband providers from blocking or throttling online content, and barred them from charging online companies a second fee to reach their customers faster; known as „fast lanes.“ Equally as important, today’s vote abdicated the FCC’s role protecting consumers and innovators in the broadband market and prohibited the states from passing any laws protecting net neutrality.
Why should innovators care? Say you’ve got a great idea for an online service that delivers food from local grocery stores and you are looking for investors. Your competitors are, among others, Amazon, WalMart and Fresh Direct. Without the protection that net neutrality offers, broadband providers can charge you and your competitors for fast lanes. Big companies can afford that, but can your start-up? Try telling your investors that the first thing you need to do to succeed is negotiate fast lane agreements with every broadband provider in the country. They’ll probably show you the door.
If you can’t afford to get in the fast lane, you’ll be relegated to the slow lane. That means that your big competitors‘ websites will load faster, while yours will load slower. Studies have shown that Internet users will wait no longer than about 3 seconds for a website to load. Life in the slow lane means fewer customers, fewer revenues and profits and likely a quick demise. But not only are fast lanes permitted by today’s vote. A broadband provider can also block and throttle online content for no reason at all.
Supporters of the repeal say not to worry, that if the broadband provider is acting in an anticompetitive manner, you could use the antitrust laws to get relief. But antitrust cases are expensive to bring, cost tens or hundreds of thousands of dollars in legal fees your start-up doesn’t have, and can take years to prosecute. By the time the case is resolved, you will no longer be in business. Under the 2015 rules, fast lanes were not only prohibited, but the FCC had an expedited process for dealing with situations where a broadband provider was discriminating.
But thanks to FCC Chairman Ajit Pai and his Republican colleagues, the FCC will no longer have a role in overseeing the broadband market. And the impact of this goes way beyond net neutrality for both innovators and consumers. If one day your broadband provider decides to charge double for the business service your start-up uses, no agency will be able to do anything about that. While Pai claims that the Federal Trade Commission will fill that gap, its power to oversee the broadband market is restricted to „unfair and deceptive trade practices,“ which the FTC itself has interpreted as encompassing only those cases where your broadband provider promises you one thing but delivers another. In other words, if your broadband provider tells you that it’s doubling its prices, blocking, throttling and providing fast lanes, the FTC won’t do anything to stop those behaviors.
As limited as the FTC’s powers are, a case pending in a federal appeals court in California my strip even those. Yet Chairman Pai refused to delay his net neutrality repeal vote pending the outcome of that case. And with the states prohibited by the FCC from protecting consumers and competition, innovators will be left completely in the cold.
The 2015 network neutrality rules worked – they allowed for online innovation to flourish, which in turn helped broadband providers make record profits. Yet this FCC has put its thumb on the scale in favor of the powerful and consolidated broadband industry.
But the fight is far from over. Consumer groups, companies big and small, states and cities will bring lawsuits to overturn the repeal of the rules. Two members of Congress, Rep. Mike Doyle and Senator Ed Markey have announced that they will introduce legislation pursuant to the Congressional Review Act that would repeal today’s decision and reinstate the 2015 rules. If you believe that Internet users, and not huge cable Internet companies, should decide what business succeed or fail on the Internet, call your member of Congress today and ask them to support Rep. Doyle and Senator Markey’s efforts. And in 2018, vote for candidates who support net neutrality and the FCC’s ability to oversee the broadband market.
Gigi Sohn is a Distinguished Fellow at the Georgetown Law Institute for Technology Law & Policy, an Open Society Foundations Leadership in Government Fellow
