New FCC Rules Will Guard Against Internet Slow Lanes Impacting Streamers

The Federal Communications Commission (FCC) has adopted rules reinstating net neutrality, a move that will prevent broadband providers like Verizon or Comcast, owner of NBCUniversal, from blocking or slowing internet traffic and creating pay-to-play internet fast lanes that could negatively impact streamers like Netflix and Hulu.

But trade groups representing internet service providers are expected to file lawsuits challenging the rule change as early as this summer when the rules are expected to be finalized, TheWrap has learned.

The rules, which the FCC approved on April 25, would set up a national framework for net neutrality for all users of the internet including distributors of content. Similar rules were adopted in 2015 but were repealed in 2017. In the aftermath, California and Washington states took matters into their own hands and adopted net neutrality rules for their own states.

NCTA (The Internet & Television Association), which is the largest U.S. broadband trade group, is among those that are eyeing a legal challenge. The lobby group is waiting to see what the FCC’s final order contains before deciding whether to sue, an NCTA spokesperson told TheWrap.

Last week, NCTA President and CEO Michael Powell said that the FCC’s “unnecessary and unlawful” action is politically motivated and “is the latest installment of a long-running campaign to establish FCC control of the internet.” He predicted the ruling will be overturned in court.

“Consumers were able to work and learn from home during the pandemic because broadband providers were free to invest in and improve their networks without the drag of public utility regulation,” Powell said in a statement. “The FCC’s action uses our nation’s aging utilities and crumbling infrastructure as the model for today’s internet.”

Net neutrality is a key issue for the emerging streaming video economy, with advocates arguing that ISPs should not be able to block consumers from accessing services like Zoom, or slow down streaming entertainment platforms to encourage them to keep paying for cable or buy a different video-streaming service. Major cable providers like Comcast, meanwhile, are concerned that the new rules would overly restrict their ability to run their businesses as they see fit.

It’s unclear if the new rules will remain in place long term, given the potential for legal battles as well as possible changes if there is a Republican administration next year, said Marc Martin, an attorney at law firm Perkins Coie who focuses on the telecom, media and tech industries.

“For some reason, it’s become a fairly partisan issue but there’s nothing partisan about it really,” he told TheWrap, adding that the rules are about consumer protection, which the pandemic underscored as people relied on broadband services for everything from watching videos to video conferencing.

Trade groups representing the ISPs also filed lawsuits after the 2015 rules went into effect.

FCC Chair Jessica Rosenworcel, a Democrat, defended the rule change, saying the pandemic made clear how necessary a broadband connection is. “It went from nice-to-have to need-to-have for everyone, everywhere,” she said in a statement. “Broadband is now an essential service. Essential services—the ones we count on in every aspect of modern life—have some basic oversight.”

Greater transparency for consumers

The Democratic-led FCC cleared the new regulations last week in a 3-2 vote along party lines. They classify ISPs as telecoms, or common carriers like utilities, under Title II of the Communications Act, and also reinstate the FCC’s authority to regulate the service providers.

The 2015 rules were enacted Similar rules were initially established in 2015 under the Democratic Barack Obama administration amid heated debate and considerable pushback from ISPs as well as a host of Republican lawmakers, before theyut were rescinded in 2017 under the Republican Donald Trump administration. amid heated debate and considerable pushback from ISPs as well as a host of Republican lawmakers.

For consumers, the rules will bring greater transparency about network management policies because broadband providers will be required to publicly disclose factors such as the speeds of their service, Martin said. “If they throttle down speeds in order to run their networks, they have to explain when and why or how long they do that,” he said.

In addition, restoring the FCC’s oversight of the ISPs is another important provision of the rules. If, for example, broadband providers introduce new practices, the FCC is essentially reserving the right to call them out if it sees a problem, Martin said.

Dissenters say rules strengthen Big Tech

In a dissenting opinion, Republican FCC Commissioner Brendan Carr referred to the new rules as “a laundry list of bogus justifications,” adding that it is not clear that the FCC believes in the reasons it states in support of Title II.

“Since 2017, we have learned that the real abusers of gatekeeper power were not ISPs operating at the physical layer, but Big Tech companies at the application layer,” Carr said. “Perversely, today’s order makes Big Tech behemoths even stronger than before.”

Jonathan Spalter, president and CEO of broadband association USTelecom, also criticized the rule change.

“These 400-plus pages of relentless regulation are proof positive that old orthodoxies die hard – even when the cost is failing to achieve internet for all,” Spalter said in a statement.

Martin said the federal flip flop over net neutrality is unlikely to be settled unless and until Congress steps in with legislation to grant FCC authority over the ISPs, a move that would carry considerable weight in court.

“There have been efforts in the past, including bipartisan efforts, but they just haven’t crossed the finish line,” Martin said.

It may, however, be a long while before — or if — any congressional consensus can be reached to bring the issue over the finish line.

On the eve of the FCC’s vote last week, a group of Republican lawmakers led by House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA) and Senate Commerce Committee Ranking Member Ted Cruz (R-TX) called on the FCC to abandon its plan, which they described as “an illegal power grab that would expose the broadband industry to an oppressive regulatory regime under Title II of the Communications Act.”

On the Democratic side, Sens. Edward Markey (D-MA), Ron Wyden (D-OR), Richard Blumenthal (D-CT) and Amy Klobuchar (D-MN) wrote to Rosenworcel on April 2 in support of restoring the rules and encouraged the agency to make sure “that ISPs cannot exploit loopholes to circumvent these protections.”

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