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March 3, 2024

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FCC advances net neutrality rules reviving broadband fight

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U.S. regulators voted Thursday to reinstate rules aimed at ensuring that everything on the internet is equally accessible — a principle known as net neutrality that has stoked debate and controversy across technology and telecom industries for more than two decades.

The U.S. Federal Communications Commission on a 3-to-2 party-line Democratic-led vote advanced the revival of net neutrality, in essence saying fast internet access is a basic telecom service. The rule needs another vote to become final. That would re-establish the FCC’s authority to police broadband providers for any attempts to block or throttle back internet traffic for some while prioritizing access to others who are willing to pay more.

The debate over government’s role in regulating internet access has raged around the world for years. The U.S. government’s approach has changed dramatically at times depending on the administration. Under former President Donald Trump, net-neutrality rules were gutted. Under President Joe Biden, the administration has made the revival of them a high priority. The proposal that the FCC passed on Thursday, put forth by Chairwoman Jessica Rosenworcel, a Democrat, would see to that.

The FCC, by quashing net neutrality rules in 2017, has been “on the wrong side of history, the wrong side of the law and the wrong side of the American public,” Rosenworcel said. “Today we begin a process to make this right” with “enforceable bright-line rules.”

Proponents of net-neutrality rules have said fast, reliable broadband service is a basic societal need today that governments must protect on behalf of households and businesses. Rosenworcel’s proposal would bar broadband providers from blocking or slowing internet service and forbid “fast lanes” for favored traffic — for example from business partners who pay for quicker passage.

Critics say the broadband market is working well, and that the FCC’s move heralds a dangerous expansion of administrative power.

“Broadband speeds in the U.S. have increased, prices are down, competition has intensified, and record-breaking new broadband builds have brought millions of Americans across the digital divide,” Commissioner Brendan Carr, the FCC’s senior Republican, said before the vote. “I would encourage the agency to reverse course.”

Thursday’s vote will be followed by a comment period extending into the new year before the second vote. Rosenworcel is expected to prevail because she leads a 3-to-2 Democratic majority. A legal challenge is certain to follow.

Cable and telephone providers have opposed the new rules. In a call with investors on Thursday, AT&T Inc. Chief Executive Officer John Stankey called the rules “an unnecessary partisan issue.” Networks performed well throughout the pandemic, he said, and “no customers are complaining about what’s going on on that front.”

Jonathan Spalter, president of the lobbying group U.S.Telecom, called the FCC’s vote a “regulatory power grab.” “Mandating crushing regulatory hurdles will only delay rather than deliver the promise of universal connectivity,” he said in an emailed statement.

The CTIA, a trade group with members including AT&T and Verizon Communications Inc., criticized the FCC’s proposal as a “1930s-style regulatory framework” and “the wrong approach for the dynamic and competitive wireless industry.”

“The wireless industry champions keeping the internet open and our networks secure and resilient,” CTIA President Meredith Attwell Baker said in a statement. “The FCC’s action today only undermines our ability to achieve those goals while also putting at risk American competitiveness.”

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COVID-19 era lockdowns that deepened isolation for households without broadband actually worked to reaffirm that internet service is a necessity akin to utilities, according to rule proponents. The sight of children using restaurant WiFi signals to do schoolwork in parking lots spurred Congress to massively fund broadband network construction, including through a $42 billion flagship subsidy program.

The FCC’s vote is “an important start to restoring internet freedom and openness,” said Chris Lewis, president of the policy group Public Knowledge. “Broadband is too important in the daily lives of every household, business, and community to leave oversight to the providers themselves, especially when they have virtual monopolies in most local communities.”

The Computer & Communications Industry Association, a trade group with members including Alphabet Inc.’s Google and Facebook parent Meta Platforms Inc., called the FCC’s action “encouraging.”

“Rules prohibiting broadband internet access providers from interfering with subscriber traffic will ensure that America’s digital economy is inclusive, open, and stable,” CCIA Senior Vice President Stephanie Joyce said in an emailed statement.

Rosenworcel has emphasized portions of the proposed rules that extend beyond equal treatment on the internet to address national security and public safety concerns. The FCC needs expanded power to forge updated cybersecurity standards and to deny network access by foreign-owned companies deemed national security threats, the agency said in a statement.

The regulations will face legal challenges. The U.S. Supreme Court has in the past limited the authority that federal agencies have in making major decisions without having been directed by Congress to do so. But the FCC has said the protections pass judicial muster, in part because they’ve been affirmed by judges before.

Bloomberg Intelligence analyst Matthew Schettenhelm gives companies an 80% chance of overturning regulations adopted by the FCC. “If so,” he said in a Sept. 29 note, “only Congress would be able to adopt federal broadband limits.”

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