How the New FCC Plans to End the Consumer Protection System
With the new president comes the new FCC. The agency has a new chairman who has already started making big changes over the past few days. Here’s what happens and how it affects net neutrality in the future.
Ajit Pai becomes the new chairman of the FCC
If you keep up with the FCC news and we can hardly blame you, there is a lot going on in the world of politics – the big change for the agency’s leadership. The FCC is governed by five Commissioners (traditionally three from one political party, two from another), one of whom is appointed by the chairman who heads the agency. President Trump appointed Commissioner Ajit Pai as the new chairman on January 23, replacing Tom Wheeler. Former Chairman Wheeler was responsible for the commitment to see the Internet as a useful service by 2015, under Title II rules, which we argued was a good thing . It is noteworthy that Ajit Pai voted against this order , but we will come back to this later.
Meanwhile, Wheeler’s seat, as well as the seat left by Jessica Rosenworth , whose term ended in January 2017, is still open. President Trump can appoint two people to replace them, after which they must be confirmed by the Senate. Regardless of who the president appoints, however, the Republican commissioners will have a 3: 2 majority, which means Pai’s agenda is likely to win.
However, even before the seats were filled, Pai had already begun to act. Over the past week, Pye has discreetly issued a series of orders to the FCC. Many of them received very little attention, often deserving only minor updates on the agency’s website. However, the changes in FCC policy are already far-reaching.
FCC lowers investigation to zero-rated data
Over the past few years, telecom operators and ISPs have switched from tariff plans with unlimited data to tariff connections . With these plans, you pay based on how much data you download. A zero rating (sometimes referred to as “sponsored data”) allows an ISP to decide that a certain type of data does not count towards your limit. So, for example, T-Mobile might limit you to 3GB of mobile data, but you can stream as much YouTube as you like with Binge On if you don’t mind lowering the video quality .
Zero-rated plans are marketed as a “free” benefit for consumers, and they really love it. You can download more content for the same money. In fact, from the point of view of most customers, this is a pretty sweet deal. The long-term problem, however, is that it sets up ISPs as gatekeepers deciding which services get an edge in the marketplace. Spotify may not count towards your data cap, but a startup called NuMusic that wants to be the next Spotify will still have to follow the old rules. To be fair, some companies, like T-Mobile, don’t charge for this special access, so all companies are still on a level playing field. Others, however, such as those from AT&T and Verizon, can be worth the money. This not only makes it more expensive for new companies to enter the market, but it can also increase the cost of the services you use every day. To make matters worse, ISPs could potentially give their own media services an unfair advantage by not counting their own product data against your data limit, but by charging competitors.
Prior to the change in leadership, the FCC studied these programs to see how they affect consumers. On February 3, Chairman Pai announced that the FCC would discontinue its investigation . In a statement on the matter, he said that the zero-rated plans are “popular with consumers” and that the agency will no longer pursue the topic. No information was released with the statement from the investigation, so it is unclear whether the FCC found anything harmful or simply decided to stop searching, but the time points to the latter.
More importantly, it signals to both consumers and companies that a zero rating is not going anywhere. At least for the next few years. If Verizon, Comcast or AT&T want to implement a more drastic plan to provide users with “free” data while someone else pays for it, the FCC will not stop them.
Overhaul plan for cable boxes almost canceled
Under the leadership of Chairman Wheeler, the FCC was trying to pass a plan that would change the way consumers get cable boxes. Currently, cable companies can force you to rent a box from them for a monthly fee. So, if you’re looking to buy your own cable box, you’re out of luck. Compare this to, say, internet modems. If Comcast wants you to rent a modem for $ 8 a month, you can say no thanks and buy your own right away and use it to connect to the Internet. However, this is not possible for television. You need a set-top box that you can only get from a cable company.
To remedy this, Wheeler’s first plan was to require cable companies to make their programming available to third-party set-top box manufacturers. So, for example, Motorola can build a box that you buy right away like a modem and use it to watch TV. This plan quickly died . After some opposition from the cable industry, the FCC came up with a plan for cable companies to create apps for other set-top boxes that can do the same thing as your set-top box. Under this new plan, if you want to watch TV or record shows, you can do so from the Xfinity or AT&T app on Roku, rather than renting a dedicated box. This was not the plan the FCC really wanted, but it was a worthy compromise.
This plan has now also been postponed. Wheeler’s latest proposal had been “in circulation” over the past several months, which meant the FCC could vote on it at any time. Chairman Pai, on the other hand, has removed it from circulation . General consideration is still open on this issue, which means the FCC may come up with a new proposal at a later date, but it will be different from any of Wheeler’s previous plans.
As to whether Pai will solve this problem at all, it is unclear. He had voted against Wheeler’s proposals before, but in one of his disagreements, Pye admitted that consumers should not be required to buy expensive, clumsy set-top boxes just to watch the TV they already pay for. Pye says he would prefer to eliminate the box altogether, so the FCC may come up with a new proposal aimed at achieving that goal. In the meantime, we are stuck in limbo on this topic, as in the past few years.
Some recent broadband subsidies for low-income households are being cut
The FCC runs a program called Life Line, which subsidizes telephone services for low-income families. It was recently expanded to include broadband, allowing providers to provide poorer homes with up to $ 9.25 off on Internet-only services. Nine companies ( including FreedomPop and Boomerang) have been approved to participate in this program. However, Pai has canceled its Lifeline designation , which means some customers will miss out on the subsidy.
While this sounds bad in the short term, it’s worth noting that there are over 900 companies already enrolled in the Lifeline program, so the program is not dead yet. However, as noted by Ars Technica , this was the first time companies were added nationwide. Previously, if a company wanted Bridge of Life status, it had to apply for special status in every state where it wanted to offer a discount.
In the long run, it may just be the new FCC trying to do the same thing in its own way. Some of these nine companies received Bridge of Life status just two days before the inauguration of the new president (Wheeler resigned on the same day). Pye has stated that one of his goals with the FCC is to bring broadband access to everyone , and these subsidies certainly seem to be in line with that goal. However, Pai did not comment specifically on whether these nine companies will receive their Lifeline status. His only comment on the matter was that the various actions Wheeler took at the last minute “should not bind us in the future.” Fortunately, the Bridge of Life program itself is not at risk yet.
Section II of the rules of the open internet may be at risk
The immediate action taken by the new FCC is mostly due to disagreements over how to achieve the goals, but the agency still pretty much wants the same things it did before: the death of set-top boxes, broadband for all, and more. The FCC believes net neutrality is changing dramatically and more dramatic changes could occur. Chairman Pye is unequivocally opposed to the Title II rules entirely , which means he could be on the brink.
As we explained here , Title II is an abbreviation of a very old law that regulated public services such as telephone lines. In 2015, the FCC voted to treat the Internet as a “common carrier,” which meant the agency could enforce much stricter rules. For example, it can force ISPs to charge reasonable rates and prevent unreasonable discrimination (for example, charge higher prices for access to certain services).
Pye has yet to say that he will definitely push for the de-classification of Title II, but it may not be necessary. The FCC can choose whether to enforce existing regulations or not. If a situation arises where the ISP does something that violates Title II rules, the FCC of the Share may simply ignore it.
For example, the FCC is working on an order that would exempt ISPs with fewer than 250,000 subscribers from the billing rules that were part of the 2015 order. These rules required ISPs to disclose their pricing, fees, and data limits. The previous FCC saw this as a kind of ” food label ” for broadband providers. This disclosure requirement could be too much of a burden for small stores that don’t have the resources to make sure they comply with all the details of the complex FCC rule, Pai said. However, rather than removing the rule entirely, the FCC will establish a policy to ignore the rule for smaller ISPs.
A share may use similar tactics to enforce (or fail to enforce) other Title II rules during his tenure. Withdrawing Title II status for ISPs would be a more permanent long-term solution, but it is unclear if the FCC will be able to accept such a proposal without serious backlash. While Title II isn’t perfect, it’s a fairly popular plan outside of the FCC. Strong public pressure could prevent Pai from moving forward and retreat completely.
This is just for some of the most significant changes that the FCC has already made, and this is something that the Chairman can do himself. In the next few years, we are likely to see more dramatic changes to the FCC agenda, with a focus on repealing the rules. Pye has openly stated that his plan is to “ clear the weed ” with regulation. If you are happy with how the FCC has worked over the past few years, you will likely be less satisfied in the next few years.
However, this does not mean that all is lost. The FCC is still (and always) open to public comment. If you have a problem with your internet service provider, file a complaint . You can also contact the FCC by phone, email, or regular mail at any time to assess the issue. As we learn more about what this new FCC plans to do, it might come in handy.