Net Neutrality Debate: Businesses Favor Rules Despite FCC Chairman Pai's Claims
The Federal Communications Commission voted last week along party lines to move forward with Chairman Ajit Pai’s plan to roll back current net neutrality protections, citing restrictions on business investment and innovation as the primary reason for repeal. Despite the claims of the agency head, many businesses would rather keep the current rules in place.
In his statement before last Thursday’s vote, Pai made the case the FCC’s 2015 Open Internet Order that reclassified the internet as a public utility under Title II of the Communications Act resulted in an “extremely unusual” decline in investment in the last two years, both from nationwide carriers and smaller providers.
Read: Net Neutrality Vote: FCC Takes First Step To Undo Net Neutrality Rules
Pai rattled off numbers of businesses that have reached out to the FCC and encouraged removing the common carrier classification: 70 fixed wireless ISPs, seven small mobile providers, 22 small ISPs, 32 rural ISPs and 19 nonprofit municipal ISPs all supported changing the current rules.
Those 143 small carriers represent small weights on the scale compared to giants like Verizon — Pai's former employer — and other major carriers like AT&T, Comcast and Charter, all of which have leaned heavily on the FCC since the election of President Donald Trump.
Nonprofit transparency organization Open Secrets said the telecommunications industry already has spent more than $20 million on lobbying since the start of 2017, including contributions directly from telecom companies and those through industry groups like the Internet and Television Association.
Comcast — which has spent the most money in lobbying thus far in 2017, investing $3.72 million into lobbying efforts — issued a statement praising the FCC’s decision to change the classification of the internet back to a Title I information service as opposed to the Title II classification approved by the commission under former Chairman Tom Wheeler during the Obama administration.
Under the reclassification, the FCC was given the ability to regulate telecommunications companies to enforce net neutrality “Bright Line” rules, which prohibit blocking content, throttling or slowing speeds and paid prioritization that provides favorable service to those willing to pay.
Read: Net Neutrality Rules: Title II To Be Reversed Under FCC Chairman Ajit Pai's Plan
Despite Pai’s presentation, not all small carriers are on board with the idea of repealing current net neutrality protections.
Dane Jasper, the CEO of Sonic, a large independent ISP in California, told International Business Times “incumbents will have a real advantage over new market entrants in the internet marketplace" if current rules are changed, which would create “a duopoly where consumers have only one or two choices when selecting an Internet provider as a result.”
Jasper said the reclassification of ISPs as common carriers under Title II “has not impacted Sonic’s investment in infrastructure or our ability to serve customers.”
“Only bigger carriers have enough subscribers to force content providers to pay additional fees,” Jasper said, “which is why these bigger carriers support the roll back of net neutrality regulations, while smaller ISPs support rules in favor of an open Internet.”
Pai’s assertion that network investment by ISPs has slowed since the Title II classification was put in place has been called into question by multiple sources. Free Press released a study prior to the FCC’s vote that showed investment has actually increased by 5 percent since the Open Internet Order took effect.
Mozilla Foundation Executive Director Mark Surman told IBT last week his organization has not seen the supposed decrease in investment or innovation Pai claims. “We believe net neutrality ... fuels innovation and competition by keeping the internet an open, level playing field,” he said.
Service providers aren’t the only type of business to take into account when considering the effects of net neutrality. Edge providers — including websites, internet services, content providers — are all equally affected by how the internet is regulated.
More than 1,000 such companies have signed on to an open letter to the FCC encouraging the commission to keep intact the Title II classification. The letter includes signatures from startups, investors and entrepreneurial support organizations in all 50 states.
The Internet Association, a trade association represents major internet companies including Google, Facebook and Amazon, issued an ex parte filing to the FCC in April stating its “vigorous support” for the existing net neutrality rules and Title II classification.
Those companies aren’t alone, either. Michael Fauscette, the chief research officer at G2 Crowd, a peer-to-peer business software review platform, told IBT small and mid-size businesses stand to lose significant ground if current net neutrality protections are rolled back.
"A lot of small and mid-size businesses will hurt because of the difference in ability to get access to the fast lane versus being stuck in the slow lane,” he said. “In general, people have no tolerance for websites that don't load as fast or data that doesn't get there as quickly or movies that don't stream as fast."
A survey conducted by Spiceworks indicated a profession networking service for the information technology industry, 82 percent of IT industry members who manage the computer systems and internet services of U.S.-based businesses support net neutrality.
Spiceworks found 86 percent of IT professionals fear internet service providers could slow or throttle internet speeds for certain types of content, 84 percent worry ISPs may block access to content, and 83 percent fear free speech may be threatened by the repeal of net neutrality protections.
Fifty-nine percent of organizations said they would anticipate higher internet costs if the Open Internet Order was undone. Just less than half of those surveyed said they believed access to important internet services would be degraded, and 45 percent said they thought internet connections were likely to slow.
Fauscette said there is good reason to have those fears. Companies already were seeing fast lanes and slow lanes develop in the years leading up to the passing of the Open Internet Order. “The rules Wheeler put in place at the FCC ... gave [businesses] pretty good leverage” to combat those problems, he said. Without them, businesses may have to pay just to get on equal footing, which many won’t be able to.
"The internet is one of the big things that offered a great competitive lever to compete with enterprise but if the cost goes up substantially, it will be a problem for them — and in some cases, for startups, it will stifle innovation," Fauscette said.
Pai’s assertion that businesses are hurting because of the Open Internet Order may well be true for some, but also dismisses the thousands of businesses that see the undoing of Title II classification as a potential undoing of their own success found in part due to the protections of net neutrality.
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