The internet has always operated under open Internet rules, a.k.a. net neutrality. No sites are given preference; all content is served at the same speed, to anyone who wants it, for free; data plans cover most services offered, without extra fees. Providing you keep your hardware and software current, the worldwide web is open to explore. That could all change when a pending rollback of the 2015 FCC net neutrality ruling goes into effect.
In November, Trump-appointed FCC Chairman Ajit Pai (a former Verizon lawyer and FCC board member on record as against net neutrality) announced the FCC committee will vote on net neutrality on December 14, where the panel is expected to approve the rollback proposal 3-2 along party lines.
Net Neutrality Seemed Assured…
Issued by then Federal Communications Commission (FCC) Chairman Tom Wheeler, the 2015 ruling declared ISPs to be “common carriers” and therefore under the sway of the FCC rather than the Federal Trade Commission (FTC). It asserted the importance of widely available broadband internet service; and issued rules prohibiting blocking of content, slowing transmission speeds, or enabling companies to pay to have their content or sites “prioritized.”
Per Cecilia Kang writing for the New York Times, “The rules were intended to ensure an open internet, meaning that no content could be blocked by broadband providers and that the internet would not be divided into pay-to-play fast lanes for internet and media companies that can afford it and slow lanes for everyone else.”
FCC Chairman Pai argues that the rules are “prescriptive,” anticipating practices that have not occurred, and that the FCC’s role is to address practices as they happen, allowing the marketplace to innovate and develop to meet evolving demands. Pai issued a proposal in April 2017 to roll back the Obama-era rule regulating how ISPs may control broadband access and traffic. The new proposal has been open for public comment since May 2017, and the FCC received more than 22 million comments, seemingly in favor of eliminating net neutrality. Those comments have been called into question by the New York State Attorney General, Eric Schneiderman, who avers possibly hundreds of thousands of NY state and other states’ residents were impersonated in fraudulent comments; the FCC has ignored requests for access to data that could assist an investigation into what amounts to identity theft as well as corruption of the public comments process. Chairman Pai said that the number of comments for or against net neutrality rules “is not as important as the substantive comments that are in the record.”
A Pandora’s Box?
A federal appeals court affirmed current net neutrality rules, so there will likely be legal pushback when the FCC moves ahead with the rules change. The new FCC proposal claims self-policing of open internet practices will become the standard, asserting that the FCC will ask companies to voluntarily commit to transparency about their plans—essentially stripping consumer protections from the 2015 ruling. The Times reports that big cable and phone mergers currently in the works could exacerbate anti-competitive actions by big conglomerates, leaving consumers at the mercy of cable companies and telecoms like AT&T, Verizon, Time-Warner and Comcast—as one commenter noted, all companies renowned for terrible customer-service and anti-competitive behavior that limits or restricts customer choices.
Existing net neutrality rules bar big telecomm providers from charging fees to speed connections across the Web, accord “favorite” status to some websites over others, or even potentially bar access to sites and services that are direct competitors. Because the largest companies will be more able to afford possible pay-to-play fees, a rollback of net neutrality could create an unequal playing field for small businesses and start-ups.
Until new FCC rules are published and we see what ISPs begin to do, the potential cost to consumers in increased fees or fees for currently free services cannot be estimated.
The Internet Association (a trade organization whose members include internet giants Google and Facebook, who have been mostly silent about the net neutrality rollback) stated, “Rolling back these rules or reducing the legal sustainability of the order will result in a worse internet for consumers and less innovation online.” But then, their interest is in maintaining the status quo, which would benefit their operations.
Trump Administration Pursues Regulation Reduction
President Trump issued an executive order in March 2017 overturning broadband privacy regulations (see below) due to go in effect at the end of 2017. More recently, the FCC rescinded rules on local media ownership and limitations on the number of TV stations one company can own. The latter rule dragged an obsolete ruling dating to the era of UHF broadcasting back into use to justify allowing large media companies to greatly expand their ownership… and potentially dominate the airwaves. Inconsistently, Chairman Pai argued that net neutrality is weakly based on similarly antiquated laws written for pre-internet media.
Free speech activists are concerned about how loss of net neutrality may impact on free access to news and information, and the ability of groups to organize and communicate online. This free-speech concern is even greater than in 2015, when a well-managed online campaign swayed the FCC in favor of net neutrality. The related rulings allowing consolidation of media power make these concerns even more urgent.
What About the Ad Industry?
Advertising on the internet is already dominated by a few powerful content giants (Google and Facebook, for example); with net neutrality gone, these giants could claim even more control over what you see and what you can access… and how much companies can learn and record about your activities and behaviors, without your knowledge. Currently, companies that suffer data breaches are required to notify users that their data may have been exposed; those rules may not be applied evenly going forward. The FCC seems inclined to rely on voluntary transparency over regulation, or to defer to the Federal Trade Commission (FTC) for enforcement.
Then there is the question of fees. Verizon owns Yahoo and AOL; they could potentially let mobile users access Yahoo Sports without docking user data plans, but charge users for accessing ESPN or Sports Illustrated. AT&T is already giving users access to streaming DirecTV content, which they own. ISPs could also designate certain media firms as “preferred,” and charge advertisers more to use those services. Sites having to pay higher fees could raise ad prices to amortize their own costs. Also, consider that the FCC cancelled recently enacted digital privacy rules, allowing internet service providers (ISPs) to collect and store (and potentially sell) user data just like Google and Facebook. But while users and businesses can elect not to use Google or Facebook, it will be far more difficult to step away from an ISP if you dislike their data privacy policies. Supporters of the rollback point out that the FTC already has clear data privacy rules for websites that could be applied to ISPs.
Big telecomm companies have been itching to get into the ad serving game. Some ad experts suggest that increased competition in ad serving and audience targeting may be a good thing; but that ignores that ISPs could prefer their own properties and websites over smaller sites that better suit advertisers’ targeting specifications. We could get the appearance of greater competition, but the reality could be reduced reach and less accurate targeting… just as ad serving companies are being held more accountable for how and where ads are being served.
Aside from concerns about transparency, cost and effectiveness, remember that most consumers don’t like digital ads. Will having more companies bombarding users with ads be beneficial to advertisers and agencies? And how unhappy will users be about even more companies collecting and storing data without user permission? With the internet and media dominated increasingly by big conglomerates (and the powerbrokers behind those companies), we’re having an ‘80s flashback to “Max Headroom”…
Take Action Now
Ditching net neutrality could turn the internet into a tightly controlled experience where you and your customers see only what ISP providers offer, and then at a price they dictate… or not. While data privacy may be less of an issue than privacy advocates claim, declaring open season on the open internet does not sound like a good deal for business at large. If you agree, make your concerns known. Business owners should call their elected representatives to express their views; Congress has the power to overturn FCC rules and set clear standards for data collection/privacy and net neutrality.