In his press release dated 2/10/15, FCC Commissioner Ajit Pai explains why he feels the American people are being misled about President Obama’s plan to regulate the Internet. The Commissioner expresses in his release that, “Last week’s carefully stage-managed rollout was designed to downplay the plan’s massive intrusion into the Internet economy and to shield many critical details from the public. Indeed, Chairman Wheeler has made it clear that he will not release the document to the public even though federal law authorizes him to do so.” In addition, he says, “I believe the public has a right to know what its government is doing, particularly when it comes to something as important as Internet regulation. I have studied the 332-page plan in detail, and it is worse than I had imagined. So today, I want to correct the record and explain key aspects of what President Obama’s plan will actually do.”
Commissioner Pai targets six key points identified from the President’s plan and expands on each to clarify why he (Commissioner Pai) feels the plan is worse than he imagined. Several points and the Commissioner’s position on each are included in the experts from the press release posted below:
First, the claim that President Obama’s plan to regulate the Internet does not include rate regulation is flat-out false. The plan clearly states that the FCC can regulate the rates that Internet service providers charge for broadband Internet access, for interconnection, for transit—in short, for the core aspects of Internet services. To be sure, the plan says that the FCC will not engage in what it calls ex ante rate regulation. But this only means that the FCC won’t set rates ahead of time. The plan repeatedly states that the FCC will apply sections 201 and 202 of the Communications Act, including their rate regulation provisions, to determine whether the prices charged by broadband providers are “unjust or unreasonable.” The plan also repeatedly invites complaints about section 201 and 202 violations from end-users and edge providers alike. Thus, for the first time, the FCC would claim the power to declare broadband Internet rates and charges unreasonable after the fact. Indeed, the only limit on the FCC’s discretion to regulate rates is its own determination of whether rates are “just and reasonable,” which isn’t much of a restriction at all.
Lest anyone take comfort in the notion that the FCC will allow the market to let prices through competition, the plan goes out of its way to reiterate its view that competition is limited. And it uses the FCC’s new 25 Mbps yardstick for broadband to claim that competition doesn’t exist for a majority of Americans. To think that rate regulation and other utility-style regulation will not happen in the face of such findings is naïve.
Second, President Obama’s plan targets pro-competitive broadband service offerings, both actual and potential, that benefit consumers. The plan expressly states that usage-based pricing, data allowances—really, any offers other than an unlimited, all-you-can-eat data plan—are now subject to regulation. Indeed, the plan finds that these practices will be subject to case-by-case review under the plan’s new “Internet conduct” standard. That standard evaluates at least seven vaguely defined factors in determining whether a practice is allowed. The plan makes clear that these practices are now on the chopping block, with those of mobile operators under special scrutiny. This means that consumers who use less data may end up subsidizing consumers who use more data. Moreover, the President’s plan goes out of its way to say that sponsored-data plans and zero-rating programs, like T-Mobile’s Music Freedom offering, may violate the new standard for Internet conduct. Preventing companies from differentiating themselves from the competition by giving consumers a wide variety of options will mean less choice and less free data for consumers. If you like your current service plan, you should be able to keep your current service plan. The FCC shouldn’t take it away from you.
Third, President Obama’s plan gives the FCC broad and unprecedented discretion to micromanage the Internet. The plan gives a Washington bureaucracy a blank check to decide how Internet service providers deploy and manage their networks, from the last mile all the way through the Internet backbone. Take interconnection as just one example. The plan states that the FCC can determine when a broadband provider must establish physical interconnection points, where they must locate those points, how much they can charge for the provision of that infrastructure, and how they will route traffic over those connections. That is anything but light touch regulation. And the plan extends the FCC’s interventionist gaze well beyond this part of the network. Small wonder that some pro-regulation activists are already deeming the FCC the “Department of the Internet.”
There is much, much more to Commissioner Pai’s press release. Click here to access the entire press release and click here for the Commissioner’s “Fact Sheet.”
