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FCC Rolls Back Net Neutrality

Cyber Law and Data Protection Alert  | December 14, 2017
By: Michael Jervis

The Federal Communications Commission (FCC) voted today to repeal net neutrality rules implemented during the Obama administration. As expected, the vote proceeded along party lines, with the Republican majority voting to repeal and the Democratic minority voting against repeal.

The existing rules required Internet Service Providers (ISPs) to treat all online content equally. That is, ISPs could not allow higher speeds or broader bandwidth to preferred websites or other preferred content providers (and similarly, were not permitted to slow down traffic from non-preferred websites). Those rules are now no longer in place and ISPs may engage in such preferential treatment if they choose. As a further consequence of the FCC’s move, oversight of remaining Internet traffic protections will shift to the Federal Trade Commission (FTC) from the FCC. For example, ISPs will be required to publicly disclose when they are blocking, throttling, or prioritizing Internet traffic in exchange for payment. Those required disclosures will now be monitored by the FTC. 

Both technology companies and consumer groups have sharply criticized this move.  They believe an “equal playing field” for all Internet traffic is crucial to the continued development of technology and a fair, publicly accessible Internet. They are concerned that repeal of the rules will allow ISPs to pick winners and losers and stifle new competition. One of the most prominent examples is Comcast’s status as both an ISP and content provider. Millions of consumers access the Internet through Comcast service. However, Comcast also controls significant content through its ownership of NBCUniversal. Critics of the repeal worry that Comcast could use the lack of net neutrality rules to unfairly compete, downgrading content coming from providers like Netflix in favor of Comcast’s own content. Critics also are concerned about startup companies, arguing a new app concept would be unable to negotiate with ISPs on the same level as established companies, limiting disruption and competition in those markets.

However, ISPs and other players in the telecom field downplay those concerns. ISPs have promised not to engage in blocking or throttling content. At most, they say they will engage in paid prioritization – allowing faster speeds to companies that pay for the privilege. They assert that ISPs’ own business interests will enforce an open Internet, in that they have made significant profits from the open Internet to date, and therefore have no interest in undermining that. ISPs also believe that repealing what they see as unnecessary government regulation will allow for more innovation on the telecom side of the tech industry.

Despite today’s vote, this is not the end of the story for net neutrality. Advocacy groups and tech companies have vowed to take the fight to court. Democratic lawmakers, asserting that public polling shows net neutrality rules are highly popular, have said they will seek to cement the Obama rules via legislation. Companies and advocates on both sides of the debate will need to continue watching both the legislative and judicial moves before the debate can be deemed over.

For additional information, contact Michael Jervis (jervism@whiteandwilliams.com; 215.864.7042) or another member of the Cyber Law and Data Protection Group. 

This correspondence should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult a lawyer concerning your own situation and legal questions.
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