Most people can agree that the internet is playing an increasingly important role in our everyday lives. As a result, any change that impacts the regulation of the internet and our ability to access it quickly becomes a newsworthy topic. When the FCC voted to repeal the “net neutrality” regulations that were passed in 2015, many people began to voice their concern.
Generally, the term “net neutrality” is the principle that internet service providers (ISPs) must treat all traffic on the internet the same, regardless of the type or source of the content. Net neutrality prevents ISPs from blocking, slowing down, or otherwise discriminating against any particular content or applications.
The Federal Communications Commission (FCC) net-neutrality regulations were passed in February 2015 under the Obama administration. The regulations prohibited ISPs from intentionally speeding up or slowing down content from specific websites. For instance, they prohibited AT&T from slowing down a service like Hulu in order to put its own streaming-video service at an advantage. Also, AT&T could not force Amazon Prime to pay more money to receive faster streaming speeds on its networks. The goal of the regulations was to ensure that the internet market remains open and fair, and to continue to allow consumer choice, freedom of expression, and competition.
In a victory for ISPs like Comcast, Verizon, and AT&T, the FCC voted last week to repeal the net-neutrality regulations. At its monthly meeting on December 14, 2017, and despite widespread opposition, FCC Chairman Ajit Pai, a Trump appointee, moved forward with the vote. In a 3-2 vote, the repeal proposal passed, removing the net-neutrality regulations put in place just two years ago.
This vote eliminates the regulations preventing ISPs from blocking or delaying online content. Thus, Comcast can now charge customers who use Netflix more for using large amounts of bandwidth; or AT&T can, in theory, entirely obstruct access to any websites it chooses. In addition, the vote repealed regulations that prohibited ISPs from favoring their own content, or the content of companies that pay them a premium. However, new regulations passed last week require ISPs to fully disclose any instances of blocking or throttling content or prioritizing any content based on payment of a premium. The new regulations still prohibit certain activity deemed to be anti-competitive. Such practices include exclusive dealing, predatory pricing, and, in some instances, service bundling.
In addition to repealing the net neutrality regulations, the new FCC regulations also deny state and local governments the power to pass their own laws regulating broadband service.
How Will Repealing Net Neutrality Affect Consumers?
Without net neutrality, consumers could start to see their ISP bundle services as cable TV providers have done for years. Bundling—charging one set price to purchase several services—may force consumers to pay for premium packages just to visit the sites they want. In doing so, ISPs gain the power to act as gatekeepers, forcing you to purchase services you do not want or need, instead of giving you the freedom to choose. The new rules do include some restrictions on the ability of ISPs to bundle services. Bundling will remain illegal when an ISP with sufficient market power uses it in a way that substantially restrains competition.
The repeal also could result in consumers seeing a cost increase for third-party services provided through their ISP. For example, Hulu is partly owned by Comcast. Without net-neutrality rules, Comcast might decide to charge customers a premium to access Netflix and offer Hulu at a reduced cost. This type of pricing structure could effectively prevent certain services from competing in the market, and it could lead to customers paying significantly more for certain services because their provider wishes to favor others.
What Is Next?
Consumers will not notice an immediate difference in internet speeds or prices now that the FCC has repealed the prior regulations. Before the new rules can go into effect, they must be published in the Federal Register, which may not happen until early next year. Even then, we can expect lawsuits to be filed by those with concerns that internet providers will control internet traffic in anti-competitive ways. These legal challenges are likely to delay implementation of the new regulations. For instance, claims have already been made that the agency failed to follow its legal obligation to review and consider public comments prior to voting.
Even if the new regulations survive the legal challenges, their implementation is likely to happen over time as companies begin to change business models and services. Although services like Netflix and Hulu will not drastically change overnight, advocates for net neutrality worry how the repeal may impact new, younger services. Start-up companies may struggle to have their content delivery prioritized by internet service providers requiring payment of a premium. This could fundamentally alter the future internet environment and the level of market competition, as a whole.
Bianca Ybarra is a Staff Writer for GetLegal.com. She is a graduate of the University of Houston Law Center and a member of the State Bar of Texas.