FCC Votes 3-2 to Scrap Title II Net Neutrality Regulation, Over Vehement Democratic Dissents

The FCC voted 3-2 to undo Title II net neutrality regulation under the Communications Act at a Thursday meeting, as expected. The ruling and orders approved by commissioners along party lines will return broadband classification to a Title I framework and eliminate 2015 regulation. The item as described by a release and officials' statements appears substantively the same as a draft. Tweaks narrowed the legal basis of a transparency rule and bolstered pre-emption of state broadband regulation.

Republican commissioners hailed repeal of "heavy-handed" regulation of broadband as a Title II telecom service and said it will promote industry investment, network deployment and innovation. They disputed that the deregulation will lead to the "end of the internet" and other "apocalyptic" outcomes. The FCC is simply restoring a "light-touch" Title I framework, with the transparency rule requiring ISPs to disclose their network practices, backed up by restored FTC consumer protection, federal antitrust enforcement, and generally applicable state and local protections, they said.

"It is time for us to return to the bipartisan regulatory framework under which the internet flourished prior to 2015," said Chairman Ajit Pai. "It's time for us to restore internet freedom." Commissioner Mike O'Rielly said he's not convinced the rules "are needed to protect against hypothetical harms," given the absence of "demonstrable harms" to consumers: "I still cannot endorse guilt by imagination." Commissioner Brendan Carr called it a "great day for consumers, for innovation and for freedom," as the agency ends a "two-year experiment" with "massive regulatory overreach."

Democrats slammed the deregulation as inviting ISP abuses that would harm consumers and competition. "I dissent from this fiercely spun, legally lightweight, consumer-harming, corporate-enabling Destroying Internet Freedom Order," said Commissioner Mignon Clyburn: "I am among the millions" who are "outraged, because the FCC pulls its own teeth, abdicating responsibility to protect the nation’s broadband consumers." A "soon-to-be-toothless FCC, is handing the keys to the internet ... over to a handful of multibillion-dollar corporations" that will likely "put profits and shareholder returns above what is best for" consumers, she said.

"Net neutrality is internet freedom. I support that freedom," said Commissioner Jessica Rosenworcel. "I dissent from this rash decision to roll back net neutrality rules," from "a corrupt process" and from "the contempt this agency has shown our citizens in pursuing this path." The decision puts the FCC "on the wrong side of history, the wrong side of the law, and the wrong side of the American public," she said.

Bomb Threat

Pai's statement was interrupted by security personnel who briefly cleared the meeting room. They appeared to sweep the room with a dog, the same canine that swept the room before the meeting. The FCC referred our questions to the Federal Protective Service.

At around 12:35 p.m., the FCC got a call saying "two explosive devices were in the building and set to detonate in 30 minutes," with one allegedly in the Commission Meeting Room, FPS Director-Communications and Engagement Robert Sperling emailed us in the evening. "The decision was made to have everyone leave the hearing room out of an utmost of caution. FPS Explosive Detection Canine Teams swept the facility and gave the 'all clear,' and the hearing room and overflow room were able to be repopulated.”

Pai defended the level of economic analysis in the order. “We relied on our economists to do very careful analysis of the facts in the record,” he said in a news conference after the meeting. “If you look at the draft order that we put out … we made a careful assessment of the facts.” Pai’s “confident” that either in “the court of public opinion” or actual court, “reasonable people will see that we did try to certainly evaluate the various impacts of these rules.” All harms people cited by defenders of the 2015 rules “are entirely hypothetical, they’re not manifested in the record,” Pai said. That shows the FCC is taking the right approach to address problems if they occur rather than approving pre-emptive rules, he said. “The FTC is in fact the nation’s premier consumer protection cop on the beat.”

On anticipated legal challenges, “I’m shocked -- shocked -- that people are going to challenge this decision in court," Pai quipped to reporters. Carr noted the Supreme Court's 2005 Brand X ruling upholding FCC cable modem Title I classification. "This remains the only classification blessed by the Supreme Court," he said.

In a joint news conference, O’Rielly and Carr expected the uproar to die down after the changes take effect and the public sees no negative effects. “I’m glad that people are engaged; it doesn’t cause me heartburn,” O’Rielly said. “When the internet isn’t broken, it’s going to reaffirm our point.”

“The American public is angry,” angrier than she has seen before, Rosenworcel said during a news conference: “There are people who have been outside 24 hours, clamoring to get this agency to pay attention to them.” The economic analysis was “woefully deficient, it was ideological and it was designed to achieve an end,” she said. Rosenworcel said FCC data shows half of U.S. households lack a choice of more than one fixed broadband provider. “I’m one of them,” she said. “I don’t understand what kind of economic analysis suggests that competition is going to solve the problem for me.”

FTC Role

The FCC said the reversal of Title II common-carrier regulation restored FTC authority to protect broadband consumers, privacy and competition, and O'Rielly noted a memorandum of understanding between the two agencies. Democrats questioned FTC ability to replace FCC regulation and noted AT&T Mobility in the 9th U.S. Circuit Court of Appeals put the trade commission's authority to oversee broadband in doubt. Republicans said the 9th Circuit during en banc review set aside a panel's ruling that undermined that authority and declined to speculate on "hypothetical" scenarios.

The same partisan divisions were in evidence at the FTC. Acting Republican Chairman Maureen Ohlhausen welcomed the FCC action: "The FTC is ready to resume its role as the cop on the broadband beat, where it has vigorously protected the privacy and security of consumer data and challenged broadband providers who failed to live up to their promises to consumers." Commissioner Terrell McSweeny said the vote will "undermine the free, open, and democratic internet that Americans overwhelmingly support" and said the FTC "will not be able to fill the gap created by the FCC’s abdication of its authority and sector-specific mandate."

An FCC declaratory ruling reinstates the classification of mobile broadband, removing another trigger of common carrier regulation for wireless carriers. A report and order eliminated rules against ISP blocking, throttling and paid prioritization of traffic, and scrapped a general conduct standard. It requires ISPs to disclose network practices, including about blocking, throttling, paid (or affiliated) prioritization. Another order denied requests to add further materials to the record.

O'Rielly said the FCC removed the draft's citation of Section 218 and Title III as legal authority for the transparency rule -- justifications he was dubious about. He said the FCC also at his request said states may not adopt their own transparency requirements, strengthening pre-emption of state or local broadband regulation that conflicts with the agency's deregulatory interstate framework. He said he would view state privacy actions as impermissible.

The ruling and orders won't take effect for some time because the transparency rule, which imposes new requirements on ISPs, must first be approved by the Office of Management and Budget, said Wireline Bureau Chief Kris Monteith. OMB approval can take months, she said.

Other net neutrality news Thursday: on plans for state lawsuits and on Capitol Hill 1712140044 and on other litigation and reaction 1712140015.

Net Neutrality Notebook

Judicial Watch said it joined an amicus brief asking the Supreme Court to review appeals of a lower court ruling that affirmed the FCC's 2015 Title II order. The high court should overturn the decision by the U.S. Court of Appeals for the D.C. Circuit that allowed the previous commission "to directly intervene in the broadband Internet economy,” said a release on the brief filed this week with Allied Educational Foundation. The ruling gave the FCC "extended future powers to destroy enormous amounts of national wealth by reclassifying and regulating broadband Internet service," the brief said. "The result will be constant risk of damage to a major portion of the American economy and a simultaneous increase in wasteful rent-seeking behavior and agency lobbying. Amici are additionally concerned that unless this Court acts to rein in an unchecked administrative state, federal separation of powers doctrine will be badly undermined." With FCC reversal of the 2015 order looming, some attorneys doubt the high court would review the appeals on the merits, though some said the D.C. Circuit ruling might be vacated as moot (see 1712050035).

Clyburn and actress Alyssa Milano tweeted plans for an online town hall meeting dubbed #SaveNetNeutrality Tuesday, 2 p.m. EST, asking those interested to direct questions to @MClyburnFCC and @Alyssa_Milano.