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FCC Votes to Dismantle Net-Neutrality Rules

WASHINGTON—The Federal Communications Commission Thursday voted to roll back far-reaching rules governing how internet-service providers treat traffic on their networks, a move expected to empower cable and wireless providers and transform consumers’ online experience.

Ajit Pai, chairman of the Federal Communications Commission, greeted presenters Thursday at a commission meeting where the agency voted to roll back net-neutrality rules. PHOTO: ANDREW HARRER/BLOOMBERG NEWS

The 2015 “net neutrality” rules were one of the signature regulatory actions of the Obama administration, requiring broadband providers to treat all traffic equally, without blocking or slowing content, or providing fast lanes for favored sites and services.

Republicans say the shift will unwind what they consider to be a regulatory overreach, restoring vitality to the broadband economy and benefiting consumers with more choices and lower prices.

The commission’s vote was 3-2, along party lines, with FCC Chairman Ajit Pai and the two fellow Republicans on the panel backing the change

The dismantling of the Obama-era rules isn’t expected to change the delivery of web content to consumers overnight. But internet-service providers such as Comcast Corp. or Verizon Communications Inc. would be free to make all sorts of big changes, such as offering new packages with pricing schemes that deliver some kinds of content but not others. One type of service that could proliferate in the new regime is zero-rating deals, where specific websites or services are exempted from a mobile carrier’s data caps.

In his official comment on Thursday, Mr. Pai, the architect of the new rules, emphasized the need to reinvigorate broadband investment in the face of huge and growing consumer demand.

“Simply put, by returning to the light-touch [regulatory] framework, we are helping consumers and promoting competition,” Mr. Pai said. “Broadband providers will have stronger incentives to build networks, especially in unserved areas, and to upgrade networks to gigabit speeds and [next-generation 5G wireless].… In short, it’s a freer and more open internet.”

But the issue, which has been the subject of public policy debates for more than a decade, has stirred activists who view a tightly regulated, open internet as a powerful force for democracy and opportunity. Those groups stepped up their activity ahead of the Thursday vote, arguing that the change threatens to hit consumers with higher prices and to Balkanize the internet.

Much of that opposition was led by major internet firms such as Alphabet Inc.’s Google, Netflix Inc., Inc. and Facebook Inc. They have worried for years that internet providers would use their outsize influence to extract unfair fees or promote their own content.

“Today’s decision from the Federal Communications Commission to end net neutrality is disappointing and harmful,” said Facebook Chief Operating Officer Sheryl Sandberg. “An open internet is critical for new ideas and economic opportunity—and internet providers shouldn’t be able to decide what people can see online or charge more for certain websites.”

A Google spokeswoman said in a statement that it was “committed to the net neutrality policies that enjoy overwhelming public support, have been approved by the courts, and are working well for every part of the internet economy.”

The new rules could allow novel alliances between broadband providers and major entertainment, shopping, search and social-media platforms. They also open the door to new online ventures by the providers themselves.

Providers could create fast lanes for favored services, including their own. One that could benefit, for example, is AT&T’s DirecTV Now, a streaming product that already is exempt from AT&T wireless data caps. The company could now also provide a fast lane for it, although there is no indication yet that it will.

Proponents of change, led by Mr. Pai, contend that fears over the open internet’s demise have been exaggerated. They note that actual complaints of net-neutrality violations have been few and far between. Mr. Pai in particular expects public pressure—aided by FCC transparency rules requiring the providers to disclose their practices in detail—to prevent unreasonable behavior.

Mr. Pai has attempted to counter the predictions of doom by arguing that people will still be able to use the internet as they always have. He released a video recently in which he dressed up as Santa Claus and a Jedi warrior, in order to underscore that consumers will still be able to shop on the internet and follow their entertainment favorites.

Large cable and wireless firms such as Comcast, AT&T Inc. and Verizon that provide internet access to most consumers also sought to reassure consumers.

AT&T executive Bob Quinn said in a statement that his company has made legally-binding net-neutrality commitments and doesn’t intend to “block websites, nor censor online content, nor throttle or degrade traffic based on the content, nor unfairly discriminate in our treatment of internet traffic….In short, the internet will continue to work tomorrow just as it always has.”

Those firms, however, have felt hobbled by the 2015 rules, which restricted their ability to leverage their power over the internet’s pipes. They also feared that the government would begin to regulate their pricing.

Mr. Pai has argued that the key to the new rules’ success will be transparency—the idea that consumers will know exactly what they are getting. For instance, a buyer of a monthly cellphone plan would be able to find out if access to a particular streaming-movie service is prioritized over other traffic from a rival service. His plan envisions enforcement of that transparency by both the FCC and the Federal Trade Commission, whose mission is consumer protection against anticompetitive and deceptive behaviors.


He has also criticized big internet companies that have opposed his plan, citing recent examples of their own blocking or prioritization of sites and services.

A number of Democrats called on the commission to delay the vote in light of the fact that millions of comments submitted to the agency about the change have been found to be fake. A independant investigation has uncovered thousands of fraudulent comments on the FCC’s online commenting site. The FCC last week said it “strongly” opposes the submission of fake comments, but Mr. Pai went ahead with the vote.

Democratic commissioners warned that the changes will open the online world to domination by providers, despite their claimed support for net-neutrality principles.

“When the current protections are abandoned, and the rules that have been officially in place since 2015 are repealed, we will have a Cheshire cat version of net neutrality,” said Democratic commissioner Mignon Clyburn. “We will be in a world where … all that is left is a broadband provider’s toothy grin and those oh-so-comforting words: We have every incentive to do the right thing. What they will soon have is every incentive to do their own thing.”

Several open-internet advocacy groups and other opponents of the rules said they planned to sue to overturn the new FCC order within weeks. Free Press, one such group, said it would challenge the FCC’s definition of broadband, its justifications for the reversal and “the many process fouls that have plagued the FCC proceeding since it began earlier this year.”

FCC leaders believe the new order is legally defensible.