Net Neutrality Is Over. What Happens Next?
The Federal Communications Commission voted on Thursday to repeal its 2015 net neutrality rules that prohibited Internet service providers from blocking, slowing or discriminating against online content and services. FCC chairman Ajit Pai and two fellow Republican commissioners said the rules had deterred investment and innovation, while two Democrats in the minority warned that the rollback would jeopardize free expression and competition online. With the repeal it’s the first time in over a decade that the FCC hasn’t expressed some commitment to net neutrality. But what happens next is up in the air in many respects.
Will ISPs start blocking web sites?
All of the major Internet providers, including Comcast (CMCSA) and Verizon (VZ), have promised not to block or throttle access to any legal web site. Even though under the new FCC policy they could do so in theory, ISPs would take a tremendous public relations hit if they acted immediately to reverse those promises. What’s more likely is that over time, the providers will look for ways to squeeze more money out of major web sites like Netflix (NFLX) or Google (GOOGL), requiring payments to avoid a slowdown to reach users, for example. Under the new policy, the only real check on ISP blocking or slowing is antitrust law enforced by the Federal Trade Commission. That typically wouldn’t stop a company from raising fees on a web site or service it didn’t compete with.
Will consumers have to pay more?
One of the major charges by net neutrality supporters during the debate was that ISPs could start segregating different kinds of web sites or apps into different packages, requiring additional fees, kind of like cable TV bundles and add-ons. A widely circulated tweet purported to show that kind of scheme in action in Portugal, with additional fees charged for packages to use streaming music, video and social networking apps.
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Another possible outcome could be the proliferation of tighter monthly data usage caps. One of the things that the Obama-era FCC concluded under the 2015 rules was that ISPs could not discriminate by allowing customers to use ISP-owned apps without regard to data limits, a practice known as zero rating, while subjecting the use of competing apps to the limits. Trump-appointed chairman Pai was a critic of that decision and wanted ISPs to be able to use zero rating as they desired. But to do so, they’ll need to impose and enforce data caps.
What will net neutrality backers do next?
Among the accusations levied at Pai and his allies on Thursday was that the commission had not followed proper procedures in gathering data and making its case for eliminating the 2015 rules. Federal courts have been quite hard on the FCC over the years, including striking down two prior actions on net neutrality (though the 2015 rules were upheld last year).
Expect proponents of net neutrality to head to court as soon as possible after the new rules are formally published and take effect in the next few months (New York Attorney General Eric Schneiderman has already pledged on Twitter to sue). Then the courts could take a year or more to render a final verdict, with the case possibly ending up in front of the Supreme Court.
Next year’s elections could also change the climate towards a more pro-neutrality Congress, says MoffettNathanson analyst Craig Moffett. “The broader point here is that this story isn’t close to finished,” he wrote after Thursday’s vote. “If, as we suspect, there will be no action from Congress, well, then we are merely an election away from reclassification again. That means three more years of uncertainty… or perhaps longer. And if we then get a Supreme Court ruling – which could likely mean another two or three years of uncertainty while we awaited the case’s arrival and ruling – we would then be faced with… more uncertainty.”