FCC Net Neutrality Repeal to Take Effect; ISP Reaction Seen Light; Court, Hill Fights Next

The FCC order rolling back net neutrality regulation takes effect June 11, the commission said Thursday, the day before official notice is to hit the Federal Register. Chairman Ajit Pai and allies hailed the coming change and critics decried it. Some expect broadband providers to be cautious in exercising their new regulatory freedoms in the market; others suggested FCC opponents could seek a stay and the commission would ask the Supreme Court to dismiss litigation over the previous FCC's Title II net neutrality decision under the Communications Act. Sen. Ed Markey, D-Mass., who is pushing a Congressional Review Act (CRA) resolution aimed at reversing the FCC's rescission order (Senate Joint Resolution-52), said the date announcement helps the cause.

The Office of Management and Budget May 2 approved a transparency rule under the Paperwork Reduction Act, said the FCC, which noted it "tied the effective date of the entire new framework to the approval" in order "to facilitate a smooth transition and ensure consumer protection." The commission set June 11 as the date to give providers time to comply with the transparency rule's disclosure requirements, said a release.

The order replaces "heavy-handed" Title II rules with a "bipartisan, light-touch approach" that will encourage innovation and investment, while maintaining a "free and open internet," said Pai. The FTC "will once again be empowered to target any unfair or deceptive business practices of Internet service providers and to protect American’s broadband privacy," he said. "For months, many politicians and special interests have tried to mislead the American people about the Restoring Internet Freedom [(RIF)] Order. Now everyone will be able to see the truth for themselves.”

Verizon is "quite confident that the Internet will work just as well on June 11 as it did six months and even a year ago," emailed a spokesman. "We take our commitment to an Open Internet quite seriously. Our customers demand it and we stand firmly behind our core principles." Other major ISPs and their trade groups didn't comment.

The FCC "is on the wrong side" of history, the law and the American people, said Commissioner Jessica Rosenworcel. "It deserves to have its handiwork revisited, re-examined, and ultimately reversed. I raised my voice to fight for internet freedom. I’ll keep raising a ruckus to support net neutrality and I hope others will too.” Former Commissioner Michael Copps emailed, "This is a bad day even for the Pai FCC. Light touch? -- he's making Comcast, Verizon and AT&T untouchable in their drive to control the internet at users' expense."

Market Status Quo?

Observers predicted there wouldn't be much change in the market.

"For all the hoopla around how we got here, now that we’ve arrived, there’s not likely to be any discernible impact at all," emailed analyst Craig Moffett of MoffettNathanson. "ISPs remain sensibly determined not to ruin the Internet as we know it, whether they ever had the legal ability to do anything even remotely harmful. Nothing will happen in the market -- or at least nothing apocalyptic," emailed Larry Downes, senior fellow at the Georgetown Center for Business and Public Policy. "I would be surprised if we saw much change in terms of the performance, terms, or advertising for internet access services, at least in the near-term," emailed Stan Adams, open internet counsel of the Center for Democracy & Technology.

"Things should take their expected course," emailed Harold Feld, Public Knowledge senior vice president. "Nothing changes with regard to the political or legal process. How long it will take some major ISP to push the boundaries too far and do something stupid that triggers a backlash is the more interesting question. I expect ISPs are going to be on their best possible behavior until after the elections in November, but we'll see if they can manage it."

Net neutrality advocates vowed to keep fighting. "Next stop: courts and Congress. Ultimate remedy: We the People," said Copps, now with Common Cause. "This office has proudly led the suit to block this illegal rollback of net neutrality -- and we certainly won’t stop," said acting New York Attorney General Barbara Underwood in a statement. “The FCC decision to end bipartisan net neutrality policy and help old cable companies hurt new streaming competition grows more and more unpopular by the day. But there are several paths to saving net neutrality, from the CRA and congressional action to the courts,” said Angie Kronenberg, Incompas general counsel. "It is essential that rules be reinstated through any means necessary, including the CRA, courts or bipartisan legislation,” said Internet Association CEO Michael Beckerman.

“I would fully expect opponents of the measure promptly to seek a Stay," at the U.S. Court of Appeals for the D.C. Circuit, emailed Morgan Lewis attorney Andrew Lipman, citing "passion and inflamed emotions" on both sides. But Stuart Brotman, University of Tennessee media management and law professor, said he doesn't expect a stay request. Most net neutrality advocates declined to comment on the possibility. "We can't really guarantee that we or anyone else will seek a stay or not, because it's a collaboration and conversation between a lot of petitioners," emailed a Free Press spokesman.

CRA

Markey told reporters the announcement of the sunset date will “very dramatically” help “to sharpen the focus” on the pending floor vote on his CRA resolution. Markey filed a petition Wednesday to discharge the Senate Commerce Committee's jurisdiction over the resolution, forcing the bill to the Senate floor and setting a floor vote that could happen as soon as next week (see 1805090065). If the Senate narrowly passes the measure, as now appears possible (see 1805080066), that “will actually help to create more momentum” for the House to vote on its version (House Joint Resolution-129), Markey said. Industry officials and lobbyists have seen little likelihood the House will pass the measure or that President Donald Trump would sign it.

Free State Foundation President Randolph May criticized Senate Minority Leader Chuck Schumer, D-N.Y., for backing in Wednesday floor remarks the CRA resolution and reinstatement of the 2015 rules. Schumer “has let the cat out of the bag in a display, at least, of unusual candor,” May said in a Thursday statement. “He is arguing for reimposing Title II regulation explicitly on the basis that it can be used to regulate ISPs’ rates to end user customers. This should certainly help clarify the ongoing ‘net neutrality’ debate -- on the one side you have those who make no bones about wanting to regulate Internet providers like Ma Bell was regulated."

May told us there could still be a "reasonable compromise," but he's not optimistic, given the current environment. "And I don’t think, ultimately, the courts will overturn the RIF order."

Pai "is confident the sky is not going to fall, and the passage of time without any net neutrality 'incidents' would gradually diminish the political downside risk of the repeal order," emailed Paul Glenchur, Hedgeye Potomac Research analyst. He said the June 11 date "probably triggers a request to dismiss Supreme Court review of the 2015 Title II order as essentially moot."

Many state resolutions, bills and executive orders "are clearly pre-empted" by the new order, federal law and the Constitution, said Downes.

Net Neutrality Notebook

The Connecticut House didn’t vote on net neutrality on the last day of its session Wednesday so the “bill [is] not happening,” said a spokesman for House Speaker Joe Aresimowicz (D). SB-336 was on the House calendar but didn’t come up. The Senate last week revived the bill and passed it with a tie-breaking vote from Lt. Gov. Nancy Wyman (D), and it was expected to have an easier time in the House where Democrats have a majority (see 1805070029). But the House had to finish budget work and the net neutrality bill would have taken too much time, the Aresimowicz spokesman said. Industry lobbied hard against the net neutrality bill, said state Sen. Beth Bye (D), one of the bill’s supporters, in an interview. Even though Democrats nationally have largely favored such bills, it’s “easier to scurry the House” than the Senate, she said.