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FCC Chair Pai takes 'weed whacker' to net neutrality rules; Comcast, Verizon victors

Trump-appointed Federal Communications Commission chairman Ajit Pai has done what he said he would: dismantling Obama-era rules on the internet for telecom companies, saying they aren't needed to protect consumers. Former FCC head Tom Wheeler says it's "shameful."

Federal Communication Commission Commissioner Ajit Pai speaks during an open hearing in Washington in 2015.
Federal Communication Commission Commissioner Ajit Pai speaks during an open hearing in Washington in 2015.Read moreAP /File/Pablo Martinez Monsivais

The Federal Communications Commission is about to formally roll back Obama-era net neutrality protections that ban blocking or throttling internet traffic by telecom companies and broadly deregulate the internet, classifying the network wired into most American homes as an information service instead of a utility.

FCC officials disclosed proposed rules Tuesday after months of public debate that included 22 million comments submitted to the agency. Critics responded that the changes would hurt consumers and were a "sham."

Enactment of the new rules is virtually guaranteed because of the Republican-controlled FCC, leading to big victories for Comcast, Verizon, and AT&T. Government oversight of how telecom companies manage the wired internet would be severely restricted, and the threat of utility-like price regulation on internet services would be erased, even as Comcast and other companies are looking to raise internet prices while revenue growth slows in their traditional pay-TV business. The rules also would weaken oversight of mobile broadband.

The FCC is scheduled to vote on the new rules Dec. 14. A draft of the proposals will be released publicly Wednesday morning, officials said.

Ajit Pai, who was appointed an FCC commissioner by President Barack Obama and made chairman by President Trump, has said the agency had to "fire up the weed whacker and remove those rules that are holding back investment, innovation, and job creation" in telecommunications. His actions are part of the broad overhaul of government regulation in Washington since President Trump took office earlier this year.

The new rules will return a "light regulatory touch" to internet oversight, top FCC officials said in a briefing Tuesday, and could lead to lower prices for internet services through greater investment into broadband networks. Innovation could be boosted, they said, through "paid prioritization" for fast internet service for such things as remote health monitoring or autonomous cars.

Telecom companies would be required to voluntarily disclose throttling of the internet or blocking of websites. Internet oversight would be shared by the FCC, the Federal Trade Commission, and the Justice Department under antitrust laws, officials said. The FCC also seeks to block state laws that would thwart the agency's deregulation steps.

Remarking on the millions of comments the commission has received about the new rules, an FCC official said Tuesday that the public had been very involved in the debate. He also noted that about 7.5 million of the 22 million comments had been seemingly computer-generated form letters, many with the same names and computer addresses.

Critics blasted the plan as a complete reversal of what the agency accomplished only two years ago. Former FCC chair Tom Wheeler, the architect of Obama-era net neutrality rules, called Pai's proposal a "shameful sham," noting that the FCC says it is "protecting consumers" by disavowing responsibility to do just that.

Jonathan Schwantes, senior policy counsel for Consumers Union, said the new rules "would be an enormous loss for consumers."

"Repealing the net neutrality rules would give internet service providers more power and control over the websites we can visit, and it would make it harder for small businesses and innovators to compete online," Schwantes said. "This move would likely lead to consumers paying higher prices for the internet access and speeds they have today."

Matt Wood, policy director for Free Press, said Pai's proposed rules are "dangerous and wrong, and he's going about it in the most incoherent and incompetent way possible." Wood added that the proposed rules ignore "incontrovertible economic data showing that both investment in networks and online innovation are flourishing under the very same rules Pai wants to destroy."

But industry cheered. Michael Powell, CEO of the cable industry's trade organization, NCTA (the Internet and Television Association), said in a statement that "we fully support Chairman Pai's effort to restore the 'light touch' regulatory approach that proved so successful in driving the growth and development of our internet economy."

Powell sought to allay fears that member companies would interfere with internet traffic, saying, "An open internet is deeply rooted in consumers' expectations. For the better part of two decades, our companies have built services that meet those expectations and satisfy their customers' desire to visit any lawful website or run any lawful application. The draft order will not change how our companies view the freedoms intrinsic to internet service."

Said Comcast executive vice president David Cohen: "We applaud the chairman's efforts to repeal the ill-advised and outdated burden of [utility] classification [for the internet], which has harmed broadband investment and innovation."

Comcast "has already made net neutrality promises to our customers," Cohen said, "and we will continue to follow those standards, regardless of the regulations in place."