The chairman of the Federal Communications Commission on Tuesday unveiled plans to repeal a landmark 2015 order that barred Internet service providers from blocking or slowing down consumer access to web content, and said the regulator will prevent states and cities from adopting similar protections.
FCC chief Ajit Pai, a Republican appointed by President Donald Trump in January, said the commission will vote at a Dec. 14 meeting on rescinding the so-called net neutrality rules championed by Democratic former President Barack Obama that treated Internet service providers like public utilities.
With three Republican and two Democratic commissioners, the move is all but certain to be approved. Trump, a Republican, expressed his opposition to net neutrality in 2014 before the regulations were even implemented, calling it a “power grab” by Obama.
“The FCC will no longer be in the business of micromanaging business models and preemptively prohibiting services and applications and products that could be pro-competitive,” Pai said in an interview, adding that the Obama administration had sought to pick winners and losers and exercised “heavy-handed” regulation of the Internet.
“We should simply set rules of the road that let companies of all kinds in every sector compete and let consumers decide who wins and loses,” Pai added.
The net neutrality rules, aimed at giving consumers equal access to web content, also forbade broadband providers from charging consumers more for certain content, a practice called “paid prioritization.”
Pai said state and local governments “need to be preempted” from imposing their own net neutrality rules because broadband internet service is “inherently an interstate service.” The preemption is most likely to handcuff Democratic-governed states and localities that could have considered their own plans to protect consumers’ equal access to internet content.
The FCC’s planned action represents a victory for Internet service providers including AT&T (T), Comcast (CMCSA) and Verizon Communications (VZ), which had urged the FCC to revoke the rules. The companies have said that repealing the could lead to billions of dollars in additional broadband investment and eliminate the possibility that a future presidential administration could regulate internet pricing.
In July, a group representing major technology firms including Google parent Alphabet (GOOGL) and Facebook (FB) had urged Pai to drop plans to rescind the rules.
At the December meeting, the FCC will vote on Pai’s proposal to require Internet service providers to disclose whether they allow blocking or slowing down of consumer web access or permit so-called internet fast lanes to facilitate paid prioritization. Such disclosure will make it easier for another agency, the Federal Trade Commission, to act against internet service providers that fail to disclose such conduct to consumers, Pai said.
The FCC under Obama regulated Internet service providers like public utilities under a section of federal law that gave the agency sweeping oversight over the conduct of these companies.
A federal appeals court last year upheld the legality of the net neutrality regulations, which were challenged in a lawsuit led by a telecommunications industry trade association.
‘GONE FOR GOOD’
The FCC’s repeal is certain to draw a legal challenge from advocates of net neutrality. Many Democrats and some Internet firms argue that without the rules, internet providers will threaten the openness of the internet.
New York Attorney General Eric Schneiderman, a Democrat, wrote on Twitter, “The internet is the public square of the 21st century. Unless we all speak out against the @FCC’s efforts to gut #netneutrality, the free and open internet we know today could be gone for good.”
[fortune-brightcove videoid=5501086613001]
The planned repeal represents the latest example of a legacy achievement of Obama being erased since Trump, a businessman-turned-politician, took office in January. Trump has abandoned international trade deals, the landmark Paris climate accord and environmental protections, taken aim at the Iran nuclear accord, and closer relations with Cuba, and sought repeal Obama’s signature healthcare law.
The new order will reclassify Internet providers as “information services” rather than a “telecommunication service,” which means the FCC has significantly less authority to oversee the web. The FCC granted initial approval to Pai’s plan in May, but had left open many key questions including whether to retain any legal requirements limiting internet providers conduct.
Pai, who has moved quickly to undo numerous regulatory actions since taking over as chairman, is mounting a broad deregulatory agenda and has pledged to take a “weed whacker” to unneeded regulations. Pai said he had not shared his plans on the rollback with the White House in advance or been directed to undo the order by White House officials.
Pai said the FCC is adopting a “market-based deregulatory approach.” The FCC also will vote to eliminate the “Internet conduct standard,” which gives the FCC far-reaching discretion to prohibit any Internet service provider practice that it believes violates a long list of factors and sought to address future discriminatory conduct.
Pai said his goal is to use a “light-touch market-based” regulatory approach, arguing the Internet operated well before the rules were adopted in 2015. The internet “is the greatest free market innovation in history,” Pai said, adding that government regulations could hinder that.
