https://www.nytimes.com/2017/04/05/business/dealbook/fcc-broadband-cable-trump.html?rref=collection%2Fsectioncollection%2Ftechnology&action=click&contentCollection=technology®ion=stream&module=stream_unit&version=latest&contentPlacement=10&pgtype=sectionfront
At F.C.C., Obama-Era Rules on Chopping Block
By CECILIA KANGAPRIL 5, 2017
WASHINGTON — When Congress voted to overturn internet privacy rules last month,
the swift action by Republican lawmakers sent a clear message: They were just
getting started.
The next target is net neutrality, which is the guarantee that all internet
content is equally accessible. That could be followed by cuts in broadband
subsidies for low-income households and a relaxation in rules preventing media
consolidation in local markets.
Republican regulators and lawmakers have been waiting for this moment.
Coordinating across the government, they are putting several telecommunications
and technology policies created during the Obama administration on the chopping
block. Already, Ajit Pai, the Republican chairman of the Federal Communications
Commission, who was appointed to the agency by President Barack Obama and named
to lead it by President Trump, has begun chipping away at the low-income
broadband subsidy and net neutrality rules created by his Democratic
predecessor.
“There was a good bit of overreach by the past F.C.C. that caused a lot of
confusion,” said Representative Marsha Blackburn, Republican of Tennessee, who
was vice chairwoman for President Trump’s transition. “We are going to have
technology and telecommunications policy that is light touch.”
In a major philosophical shift from the Obama administration, Republican
leaders have said they will look for proof of harm before creating new
regulations for telecom firms. They believe antitrust and consumer protection
laws suffice for government oversight of the sector.
“The F.C.C. needs a more evidence-based approach,” said Roslyn Layton, a fellow
at the American Enterprise Institute who was on Mr. Trump’s F.C.C. transition
team. “No one is writing in and asking for Title 2 reclassification of
broadband. Consumers are complaining about unwanted calls and billing problems.”
The changes have been a boon for telecommunications and cable firms that had
for years fought unsuccessfully against a Democratic-led F.C.C.
They have cheered Mr. Trump’s decision to renominate Mr. Pai after his term
ends in June. They want to overturn net neutrality and other rules so they can
start offering new business plans that consumer groups have protested.
“The repeal of net neutrality would be a clear positive for broadband network
providers,” analysts at Pacific Crest Securities wrote in a research note after
the election. Internet service providers “would be able to charge for access to
the network and for ‘fast lanes,’ which would increase potential monetization.”
Momentum is with the Republicans. Last month, they voted to overturn privacy
rules (scheduled to take effect later this year) that required internet service
providers like AT&T and Comcast to get permission from a customer before
tracking and selling data browsing and app activity. Mr. Trump signed the
measure on April 3.
Lawmakers said the F.C.C.’s rules were much stricter than any privacy
requirements placed on web firms like Google and Facebook. They argued that the
privacy watchdog duties should fall to the Federal Trade Commission, which does
not have strong privacy regulations but requires companies to self-police the
privacy policies they promise to customers.
Republicans lawmakers moved against the privacy rules under the Congressional
Review Act, a procedure used to overturn new agency rules.
The lawmakers say their next target is the F.C.C.’s declaration in 2015 that
broadband should be treated like a common carrier service, such as the phone.
That utility-like categorization strapped new rules on broadband providers.
The F.C.C. chairman and lawmakers have promised to undo those rules soon. Ms.
Blackburn said in an interview that the F.C.C. will likely create an order to
overturn them.
Democrats and consumer groups have protested, saying the internet has become
essential for work, education and commerce, and needs greater oversight.
“The recent weeks are prologue, and I am fearful that we are moving in a
direction that will unravel and undo some incredible gains we’ve made for
consumers,” said Mignon Clyburn, the sole Democratic commissioner at the F.C.C.
The reclassification of broadband also served in 2015 as the foundation for the
F.C.C.’s net neutrality rules, which ban broadband providers from blocking or
slowing down of traffic on the internet. Google, Facebook and Netflix have been
the strongest corporate backers of net neutrality, but smaller start-ups could
be most affected.
Without strong net neutrality rules, an internet service provider like Verizon
or Charter could give preference to certain content, making it harder for an
independent streaming service like Vimeo to compete.
An example is AT&T’s free service offering mobile streaming of DirecTV videos
to customers that does not count against data limits. Consumer groups have
balked, saying the practice puts competing video providers at a disadvantage
because their videos do count against those customers’ monthly data limits.
Mr. Pai has already signaled his approval of such “zero rating” programs,
saying they did not appear to violate net neutrality — and that they are
popular with consumers. In January, he closed an investigation into zero-rating
promotional streaming programs by AT&T, Verizon and T-Mobile.
But net neutrality will not be easy to undo. A federal appeals court upheld the
regulations last year in a case brought by Verizon, Comcast, AT&T and other
internet service providers. Congress could try to overturn the rules but could
not use the Congressional Review Act to do so because net neutrality was
created more than a year ago.
Republicans will also look for ways to cut fat in programs they deem wasteful
or abused. One target could be the Lifeline broadband subsidy for low-income
households. Mr. Pai prevented nine providers from offering the subsidy weeks
into his role at the F.C.C.
He has also pointed to longtime media ownership rules that prevent a local TV
station from also owning a newspaper in the same town. F.C.C. rules also
prevent sharing of resources between TV stations. Mr. Pai has said the
convergence of tech and media have made such rules too outdated. Companies like
Netflix and Google are a bigger threat to broadcast television stations than
media consolidation, Mr. Pai said.
The greatest uncertainty surrounds telecom and tech mergers. AT&T’s proposed
$85 billion merger with Time Warner is being reviewed by antitrust officials at
the Justice Department. Republicans are expected to be generally more
permissive of mergers, but Mr. Trump remains the wild card.
The president has said he would not allow the merger, and analysts say his
complaints about news coverage by CNN, which is owned by Time Warner, could
complicate the approval. But Attorney General Jeff Sessions has said he would
not be influenced by politics in decisions at the agency.
“This will be the first big test,” said Bradley Tusk, who leads the investment
firm Tusk Ventures. “If you aren’t in Trump’s wheelhouse, expect to get a more
traditional Republican look at mergers.”
