Some things to consider about net "neutrality" that are in the legislation that was just repealed.
The plan repeatedly states that it is only deferring a decision on new broadband taxes (such as Universal Service Fund fees and Telecommunications Relay Service fees, among others)—not prohibiting them. And it takes pains to make clear that nothing in the draft is intended to foreclose future state or federal tax increases. Indeed, the plan engages in the same two-step we saw last year with respect to the E-Rate program: Lay the groundwork to increase taxes in the first order, and then raise them in the second. One independent estimate puts the price tag of these and other fees at $11 billion.
The plan allows class-action lawsuits—with attorneys’ fees—should any trial lawyer want to challenge an Internet service provider’s network management practices or rates. Indeed, the plan expressly declines to forbear from sections 206 and 207 of the Act, which authorize such private rights of action. And it adopts a theory of broadband subscriber access services—that is, services that broadband providers supply to edge providers—that would allow anyone online to file a complaint or go to court. The end result will be more litigation and less innovation.
The plan expressly states that usage-based pricing, data allowances—really, any offers other than an unlimited, all-you-can-eat data plan—are now subject to regulation. Indeed, the plan finds that these practices will be subject to case-by-case review under the plan’s new “Internet conduct†standard. That standard evaluates at least seven vaguely defined factors in determining whether a practice is allowed. The plan makes clear that these practices are now on the chopping block, with those of mobile operators under special scrutiny. This means that consumers who use less data may end up subsidizing consumers who use more data. Moreover, the President’s plan goes out of its way to say that sponsored-data plans and zero-rating programs, like T-Mobile’s Music Freedom offering, may violate the new standard for Internet conduct. Preventing companies from differentiating themselves from the competition by giving consumers a wide variety of options will mean less choice and less free data for consumers. If you like your current service plan, you should be able to keep your current service plan. The FCC shouldn’t take it away from you.
The plan clearly states that the FCC can regulate the rates that Internet service providers charge for broadband Internet access, for interconnection, for transit—in short, for the core aspects of Internet services. To be sure, the plan says that the FCC will not engage in what it calls ex ante rate regulation. But this only means that the FCC won’t set rates ahead of time. The plan repeatedly states that the FCC will apply sections 201 and 202 of the Communications Act, including their rate regulation provisions, to determine whether the prices charged by broadband providers are “unjust or unreasonable.†The plan also repeatedly invites complaints about section 201 and 202 violations from end-users and edge providers alike. Thus, for the first time, the FCC would claim the power to declare broadband Internet rates and charges unreasonable after the fact. Indeed, the only limit on the FCC’s discretion to regulate rates is its own determination of whether rates are “just and reasonable,†which isn’t much of a restriction at all.
The plan goes out of its way to reiterate its view that competition is limited. And it uses the FCC’s new 25 Mbps yardstick for broadband to claim that competition doesn’t exist for a majority of Americans.
