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FCC move to restore net neutrality sets stage for familiar fight

By Gopal Ratnam, CQ-Roll Call
Published: April 9, 2024, 8:27am

WASHINGTON — The Biden administration’s move to restore net neutrality will need to pass legal tests to stick, and even then it will be at risk of a rollback under a future administration if Congress doesn’t act.

All of that means the outlook for the broadband industry is riding on the outcome of the November election, in a fight that has been playing out for years.

The Federal Communications Commission last week said it plans to vote later this month on a draft order that would classify “broadband Internet access service as a telecommunications service,” arguing that is the best reading of U.S. law.

In other words, the rule change would treat internet service like landline telephone service, allowing the agency to reinstate net neutrality principles. That would prevent internet service providers from discriminating by speeding up or slowing traffic to certain websites. It would also mean that internet service providers can’t charge more for or indiscriminately block access to sites.

“The most important part of this whole move is the one that reinstates the FCC’s oversight over broadband,” said Gigi Sohn, head of the American Association for Public Broadband.

Without the rule change, “the FCC has no regulatory power over broadband internet access providers, which is kind of insane because it’s the most important network of our time,” Sohn said in an interview. Sohn, a former FCC official, was nominated by President Joe Biden to serve as an FCC commissioner but withdrew because of congressional opposition.

The reclassification of internet service and net neutrality restoration “are needed protections [that] help protect marginalized groups, faith communities, and political voices and ensure that it is the consumer — not the companies — that decide for themselves how they’d like their experience online to be,” the Electronic Frontier Foundation, a nonprofit group focused on digital rights, said in a statement.

The debate over whether internet service should be considered a telecom service under U.S. law has been playing out for nearly two decades. The Obama administration in 2015 adopted net neutrality principles that were opposed by Republicans and the industry. The Trump administration rolled back those rules in 2017.

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Biden made a campaign promise to restore net neutrality, but the FCC was unable to act on it until Democrats had a 3-2 majority on the agency’s five-member commission. That didn’t happen until the Senate confirmed Anna Gomez to a vacant slot in September.

Net neutrality is tied to the Biden administration’s plans to extend high-speed internet access to all Americans, an effort Congress funded with $65 billion.

Opposition gathers

Forces long opposed to restoring such neutrality are calling it unnecessary, arguing that commercial and individual internet users already enjoy good access.

“In the absence of any harm, the FCC is barreling ahead with a backward-looking, unnecessary proposal,” NCTA — The Internet & Television Association, a trade group, said in a statement.

The group’s members include Comcast NBCUniversal and Cox Communications Inc., among others.

“With a newly minted Democratic majority, the FCC Chair is proposing to reflexively dust off net neutrality rules and a sweeping regulatory framework that were repealed almost seven years ago without harmful consequence,” Michael Powell, president and CEO of NTCA, said in a statement.

“Yet another pitched fight over net neutrality will distract from the relentless focus essential to making the infrastructure program a success,” said Powell, who was FCC chairman from 2001 to 2005. “Revived rules will destabilize the regulatory environment as challenges drag on for years in the courts — and, as we know, the regulations ping-pong back and forth every time the presidency changes parties.”

Opponents of the FCC move also say that classifying internet service as a telecom service is an outdated approach.

The FCC’s authority over telecom providers “is an expansive regime designed to regulate the old telephone monopolies,” said Joe Kane, director of broadband and spectrum policy at the Information Technology and Innovation Foundation, a nonprofit group focused on tech and innovation. “As such, its application to broadband will tend to shape the market to be more like a monopoly and less like the competitive market we see today.”

Billions of dollars in private investment has gone into building a high-speed internet system, Kane said. The “broadband market is already fairly competitive, and the rise of intermodal competition is only enhancing those dynamics,” Kane said, referring to increased use of satellite-based internet in addition to land-based systems that are widely used.

Although the FCC plans to classify internet service as a telecom service, the agency does not plan to levy new fees on internet providers under what’s known as the Universal Service Fund.

The agency in its draft order says it would “establish broad, tailored forbearance — including no rate regulation, no tariffing, no unbundling of last-mile facilities, and no cost accounting rules” to broadband internet providers.

The Universal Service Fund program came into being as part of a 1934 telecom act, under which long-distance phone carriers were assessed a fee to subsidize telephone service to low-income households and high-cost areas.

The USF program already is in congressional crosshairs. Sen. Ted Cruz, R-Texas, the top Republican on the Senate Commerce Committee, has called for overhauling the program, calling it a stealth tax on consumers.

But even the FCC’s supporters say the agency is likely hamstringing itself by taking the fee assessment off the table. Sohn said the Biden administration’s long-term goal of providing subsidies to millions of American households who can’t afford to pay for high-speed internet could suffer as a result of the FCC leaving out the USF levy.

In 2021, Congress appropriated $14.2 billion for a program called the Affordable Connectivity Program as part of the infrastructure law. The program funds provide $30 a month to qualifying households for broadband internet and up to $75 for households living on tribal lands. It is set to run out of funds by May.

White House officials are pushing Congress to extend the program, saying that without such an extension, for which the administration has sought $6 billion, 23 million households could lose access to the internet.

If the FCC had not taken the USF off the table, a levy under that program could have helped the administration provide subsidies to low-income households for internet access in the future when the current subsidy program runs out, Sohn said.