The title could have as easily been "Government Approved Innovation Strategies for the Internet Under Fire".
Make the Net Neutral Again
Ajit Pai’s FCC moves to roll back political control of the web.
Federal Communications Commission Chairman Ajit Pai in Washington, D.C., March 8. PHOTO: BLOOMBERG NEWS
Updated April 27, 2017 7:07 p.m. ET
134 COMMENTS
One of President Trump’s more ambitious appointees is Federal Communications Commission Chairman Ajit Pai, who on Wednesday unveiled an outline for rolling back Obama Administration rules that regulated the web like a 1890s railroad. Mr. Pai will be maligned by the left for undermining the “open internet,” but his plan would restore freedom and innovation that the federal government disrupted.
Mr. Pai in a speech at Washington’s Newseum sketched out a plan to untangle the 2015 “net neutrality” rules that classified the internet as a public utility under the Communications Act, a law carbon-dated to the 1930s. The rules give the FCC broad authority to dictate whether broadband practices are “reasonable.” Liberal pressure groups like Public Knowledge and Free Press said that nefarious cable companies might someday, somewhere block websites or slow browsing. Years later, no one can drum up an example.
The Pai plan would revert to the bipartisan consensus that the internet should be “unfettered by Federal or State regulation,” as Congress put it in a 1996 update to the Communications Act. Thus the agency will vote in May on a proposal to designate the internet as an information service, the status quo of two years ago. The Supreme Court upheld this “light touch” framework in 2005, and Mr. Pai explained in his speech that government nonintervention helped spur $1.5 trillion of private investment that built high-speed internet pipes.
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But then came the regulatory uncertainty of a government takeover of the internet. Between 2014 and 2016, Mr. Pai notes, capital expenditures on broadband from America’s 12 largest internet-service providers dropped 5.6%, or $3.6 billion, a decline he called “extremely unusual” in prepared remarks. This is “the first time that such investment has declined outside of a recession in the internet era.”
Among the losers are rural areas where profit margins are low: For instance, a provider that serves about 475 customers in northern Illinois recently delayed plans to rev up network speeds to 20 Mbps from 3 Mbps. One irony is that net-neutrality advocates claimedComcast and a handful of others wielded a broadband monopoly—and then enacted a policy that crushes small competitors.
As part of the return to normalcy, Mr. Pai proposes to eliminate a 2015 rule known as the internet conduct standard. This is an arbitrary directive that he says gave the agency “a roving mandate to micromanage the internet,” sometimes going after wireless companies for the high sin of providing popular services. FCC launched a probe into plans that allow customers to stream unlimited videos or music. The commission closed the investigation after the election, but repeal will prevent future expeditions.
The commission will also ask for comments on how to move forward with “bright-line rules” from 2015 that include a ban on “fast lanes” for content or “paid prioritization.” That ban forbids providers from charging more for carrying more content, which makes as much sense as telling FedEx that the company can offer two-day shipping but not overnight delivery.
By the way, these “fast-lanes” are hypothetical, and no broadband provider is interested in creating them, in part because they are impractical to engineer. Even so, the government walls off future innovation by stipulating that cat videos must be treated the same as telemedical X-rays or Amber alert notifications. The irony is that Google and Facebook already offer faster delivery for services like “instant articles” that appear at 10 times the normal speed.
A promise not to block or slow content could be stipulated in terms of service agreements. A violation could be punished by the Federal Trade Commission, which enjoys broad authority to police anticompetitive behavior. The FTC’s enforcement power has long obviated the need for an FCC net-neutrality scheme.
Mr. Pai said he’ll advance his proposal under a notice and comment procedure, instead of offloading the rules with a blunt agency tool known as a declaratory ruling. This is a welcome departure from his predecessor, Tom Wheeler, who ditched his own net-neutrality proposal after President Obama ordered the agency to invoke public-utility regulation. Mr. Wheeler’s final 300-page order was rushed out to avoid public scrutiny, but Mr. Pai has promised to release his proposal to the public this week.
Mr. Pai’s open process won’t prevent a synaptic breakdown by the lobbyists who want political control of the internet and are calling him a shill for cable companies and a fascist who wants to squelch speech on the web. No matter that Mr. Pai wants to divest government and himself of discretionary power. Mr. Pai deserves particular credit for calling out Free Press as a “spectacularly misnamed” group that deployed net neutrality as a pretext for government control.
The Pai plan will take regulatory shape in stages over the next few months, and perhaps his actions will galvanize Congress to take the hint and codify his protections into law. Mr. Pai on Wednesday described the internet as “the greatest free-market success story in history,” and with his help the web will continue to be a tremendous engine of innovation.
Appeared in the Apr. 28, 2017, print edition.
Make the Net Neutral Again
Ajit Pai’s FCC moves to roll back political control of the web.
Federal Communications Commission Chairman Ajit Pai in Washington, D.C., March 8. PHOTO: BLOOMBERG NEWS
Updated April 27, 2017 7:07 p.m. ET
134 COMMENTS
One of President Trump’s more ambitious appointees is Federal Communications Commission Chairman Ajit Pai, who on Wednesday unveiled an outline for rolling back Obama Administration rules that regulated the web like a 1890s railroad. Mr. Pai will be maligned by the left for undermining the “open internet,” but his plan would restore freedom and innovation that the federal government disrupted.
Mr. Pai in a speech at Washington’s Newseum sketched out a plan to untangle the 2015 “net neutrality” rules that classified the internet as a public utility under the Communications Act, a law carbon-dated to the 1930s. The rules give the FCC broad authority to dictate whether broadband practices are “reasonable.” Liberal pressure groups like Public Knowledge and Free Press said that nefarious cable companies might someday, somewhere block websites or slow browsing. Years later, no one can drum up an example.
The Pai plan would revert to the bipartisan consensus that the internet should be “unfettered by Federal or State regulation,” as Congress put it in a 1996 update to the Communications Act. Thus the agency will vote in May on a proposal to designate the internet as an information service, the status quo of two years ago. The Supreme Court upheld this “light touch” framework in 2005, and Mr. Pai explained in his speech that government nonintervention helped spur $1.5 trillion of private investment that built high-speed internet pipes.
–– ADVERTISEMENT ––
But then came the regulatory uncertainty of a government takeover of the internet. Between 2014 and 2016, Mr. Pai notes, capital expenditures on broadband from America’s 12 largest internet-service providers dropped 5.6%, or $3.6 billion, a decline he called “extremely unusual” in prepared remarks. This is “the first time that such investment has declined outside of a recession in the internet era.”
Among the losers are rural areas where profit margins are low: For instance, a provider that serves about 475 customers in northern Illinois recently delayed plans to rev up network speeds to 20 Mbps from 3 Mbps. One irony is that net-neutrality advocates claimedComcast and a handful of others wielded a broadband monopoly—and then enacted a policy that crushes small competitors.
As part of the return to normalcy, Mr. Pai proposes to eliminate a 2015 rule known as the internet conduct standard. This is an arbitrary directive that he says gave the agency “a roving mandate to micromanage the internet,” sometimes going after wireless companies for the high sin of providing popular services. FCC launched a probe into plans that allow customers to stream unlimited videos or music. The commission closed the investigation after the election, but repeal will prevent future expeditions.
The commission will also ask for comments on how to move forward with “bright-line rules” from 2015 that include a ban on “fast lanes” for content or “paid prioritization.” That ban forbids providers from charging more for carrying more content, which makes as much sense as telling FedEx that the company can offer two-day shipping but not overnight delivery.
By the way, these “fast-lanes” are hypothetical, and no broadband provider is interested in creating them, in part because they are impractical to engineer. Even so, the government walls off future innovation by stipulating that cat videos must be treated the same as telemedical X-rays or Amber alert notifications. The irony is that Google and Facebook already offer faster delivery for services like “instant articles” that appear at 10 times the normal speed.
A promise not to block or slow content could be stipulated in terms of service agreements. A violation could be punished by the Federal Trade Commission, which enjoys broad authority to police anticompetitive behavior. The FTC’s enforcement power has long obviated the need for an FCC net-neutrality scheme.
Mr. Pai said he’ll advance his proposal under a notice and comment procedure, instead of offloading the rules with a blunt agency tool known as a declaratory ruling. This is a welcome departure from his predecessor, Tom Wheeler, who ditched his own net-neutrality proposal after President Obama ordered the agency to invoke public-utility regulation. Mr. Wheeler’s final 300-page order was rushed out to avoid public scrutiny, but Mr. Pai has promised to release his proposal to the public this week.
Mr. Pai’s open process won’t prevent a synaptic breakdown by the lobbyists who want political control of the internet and are calling him a shill for cable companies and a fascist who wants to squelch speech on the web. No matter that Mr. Pai wants to divest government and himself of discretionary power. Mr. Pai deserves particular credit for calling out Free Press as a “spectacularly misnamed” group that deployed net neutrality as a pretext for government control.
The Pai plan will take regulatory shape in stages over the next few months, and perhaps his actions will galvanize Congress to take the hint and codify his protections into law. Mr. Pai on Wednesday described the internet as “the greatest free-market success story in history,” and with his help the web will continue to be a tremendous engine of innovation.
Appeared in the Apr. 28, 2017, print edition.
