Politics & Policy

What’s Next in the Wake of the FCC’s Net-Neutrality Decision

FCC chairman Ajit Pai speaks ahead of the commission’s vote on net neutrality rules, December 14, 2017. (Reuters photo: Aaron P. Bernstein)
Whatever happens, consumers shouldn’t be greatly affected.

Editor’s Note: The following piece originally appeared at AEIdeas, a public-policy blog produced by the American Enterprise Institute. It is adapted here with permission.

Well, it’s finally upon us. After three weeks of relentless public debate about net neutrality — including a steady stream of racist, despicable personal attacks on Chairman Ajit Pai and his family — we finally reached the day of action. Thursday, the Federal Communications Commission (FCC) approved the Restoring Internet Freedom Order by a 3–2 vote.

Contrary to the dominant narrative in some circles, the vote will not end the Internet as we know it, silence minority voices online, or impose Portuguese balkanized consumer-access plans (which, it turns out, doesn’t even happen in Portugal). What will happen is that the order will repeal the Commission’s 2015 Open Internet Order and restore the agency’s historical classification of broadband access as a lightly regulated information service under the Communications Act. The order also enhances the transparency rules governing disclosure of network-management practices.

So what happens next? This post discusses the likely next steps for each of the major players in the net-neutrality debate.

What’s Next for the Agency: Finalizing the Order

The Commission has done an impressive job shepherding a high-profile issue through the public rulemaking process. For all the talk by opponents about failing to respond to public inquiries, by any objective measure, Chairman Pai has presided over a much more transparent process than his predecessor did in 2015. He released the draft order for public review three weeks before the vote. In 2015, then-chairman Tom Wheeler did not make the order public until after the final vote, which tilted pre-vote public discourse in favor of those who had received leaked copies of the order. Picking winners and losers indeed. By comparison, the public debate since Thanksgiving has been by turns substantive and raucous, but at least it was conducted on a level playing field information-wise, and the agency is to be commended for that.

Nonetheless, the Commission must clear several procedural hurdles before the order becomes law. First, it must finalize the text, which may shift in minor ways because of ongoing dialogue between the majority and dissenting commissioners. After that, the Commission must submit the order to the Office of Management and Budget (OMB), which will review the order’s transparency requirements to make sure it is not imposing a greater paperwork burden on providers than necessary. It must also provide a copy of the order to Congress and the Government Accountability Office for review under the Congressional Review Act (CRA), as discussed below. Once OMB approves the order, the agency will publish it in the Federal Register, and it will take effect 60 days after publication.

What’s Next for Opponents: Congressional and Court Challenges

Title II supporters have vowed to continue fighting the agency, and after the vote, they will have two opportunities to do so. As noted above, the CRA allows Congress a chance to override certain agency orders. This was how Congress repealed the FCC’s privacy rules earlier this year. But although some representatives have suggested challenging the rules in Congress, this effort is unlikely to succeed. CRA repeal requires a majority of both chambers and either presidential approval or a veto override. Because it is unlikely that a president will actively undermine an agency in his administration, Congress has successfully deployed the CRA process only during periods of presidential transition.

Despite all the Sturm und Drang about preserving net neutrality, American consumers are unlikely to notice a difference when the order is adopted.

Of course, there is also the inevitable legal battle to challenge the agency’s order. My AEI colleague Gus Hurwitz has canvassed the most likely arguments here. Rather than repeating them, I will simply agree that administrative law strongly favors the agency, and prior litigation on this issue has reinforced the court’s position that the agency is free to decide how best to classify broadband providers as long as it follows appropriate procedures when doing so.

What’s Next for Consumers: Business as Usual

Despite all the Sturm und Drang about preserving net neutrality, American consumers are unlikely to notice a difference when the order is adopted. The rule simply restores the legal framework that governed broadband providers before 2015. All major providers have committed to no-blocking and no-throttling practices in their terms of service, and the repeal will restore the Federal Trade Commission’s authority to thwart anticompetitive behavior.

What’s Next for Congress: Revisiting the Communications Act

Hopefully, the repeal of the 2015 Open Internet Order will jump-start a conversation in Congress about real telecommunications reform, a conversation that started a few years ago with the #CommActUpdate but seems to have stalled lately. Net-neutrality supporters have painted the Restoring Internet Freedom Order as some kind of four-dimensional chess by Chairman Pai to force Congress to act, which they argue would be capitulation to broadband providers. But the reality is that the Communications Act is embarrassingly out of date. It was last updated in 1996, when half of America lacked Internet access and the other half mostly accessed the Internet via dial-up. The act’s confusing and outdated language is largely to blame for the perpetual ping-pong matches at the FCC regarding broadband regulation. No matter which path the FCC takes, its approach is equivalent to fitting square pegs into round holes.

There seems to be a loose consensus among stakeholders in support of a regime that would prohibit blocking and throttling, subject to reasonable network management and the ability to offer a curated Internet product, coupled with antitrust-like review of prioritization agreements to deter anticompetitive behavior. In this way, the Commission could serve as a sector-specific antitrust authority. The details must be fleshed out, but Capitol Hill must play the primary role in providing some much-needed stability to this area of the law. Only Congress can clarify what role (if any) the nation’s telecommunications regulator should play with regard to the primary telecommunications network of the 21st century.

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— Daniel Lyons is a visiting fellow at the American Enterprise Institute.

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