FCC Proposes End to Net Neutrality Rule

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Fri. May 19th, 2017 - by Robert Schaulis

WASHINGTON, DC – The Federal Communications Commission (FCC) voted two to one, along political lines, last Thursday to begin a new rule-making process to replace the existing Open Internet order—or net neutrality rules—in a move that could have serious negative repercussions for online retailers.

Under current rules, Internet Service Providers (ISPs) like AT&T and Comcast are prohibited from blocking access to websites and apps. The rules include a ban on paid prioritization—wherein wealthy companies and individuals might pay ISPs for privileged treatment such as higher internet speeds—or worse, punish their competitors with slowdowns and stoppages. The new proposal titled “Restoring Internet Freedom” would eliminate those rules.

Ajit Pai, Chairman, FCCWhile FCC Chairman Ajit Pai, appointed by President Donald Trump this January, described the new proposal as a “return to the Clinton-era light-touch framework” of the 1990s, critics have been extremely skeptical of the need for change and the implications weakened net neutrality rules would have on companies that conduct business online.

Major ISPs like AT&T, Comcast, and Time Warner stand to gain from the rule-reversal, but companies that conduct business online—including grocery retailers like Walmart and Amazon who are prioritizing fresh food e-commerce—stand to lose access or be forced to pay premiums to maintain their competitive edge.  

The Internet Association, an organization representing online companies like Netflix, Facebook, and Amazon, issued a statement objecting to the proposed rule change.

Michael Beckerman, President and CEO, Internet Association “The 2015 rules are working, and the internet industry remains opposed to any changes to FCC regulations governing net neutrality,” said Internet Association President and CEO Michael Beckerman. “ISPs should not be able to use their position as gatekeepers to prioritize their own content over others. Internet companies stand with consumers, startups, and other beneficiaries of the ecosystem in our fight to maintain a free and open internet.”

FCC Commissioner Mignon Clyburn noted, in a dissenting statement reported by the Wall Street Journal, that if enacted the new proposal “would deeply damage the ability of the FCC to be a champion of consumers in competition in the 21st century.”

The FCC Headquarters in Washington DC

The Internet Association also noted that, despite Pai’s claim that 2015 rules constitute a “bureaucratic straightjacket,” investments in Internet Service companies have only increased in the ensuing years: “ISP investment is up over time, and shows no decline as a result of Title II reclassification in 2015,” the Association’s statement noted. “By multiple, independent metrics, ISP claims of depressed investment don’t mesh with reality. From actual capital expenditure numbers, to patents, to prices, Title II has not had the effects that ISPs claim.”

Last month, opponents to the rule change organized campaigns to contact the FCC on a large scale and voice their opposition to the “Restoring Internet Freedom” proposal (readers can voice their concerns to the FCC here). News source Tech Crunch has an informative breakdown on how to leave public FCC comments here.

AndNowUKnow will continue to report on this and other important news that will impact our industry.