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Net neutrality is two years old this week — and Republicans still want to kill it

Net neutrality is two years old this week — and Republicans still want to kill it

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FCC Chairman Ajit Pai speaks at Mobile World Congress 2017 in Barcelona, Spain.
FCC Chairman Ajit Pai speaks at Mobile World Congress 2017 in Barcelona, Spain.
Chris Welch / The Verge

Sunday marked the two-year anniversary of net neutrality passing at the FCC. Unfortunately for advocates, the anniversary hasn’t been so sweet.

“It’s kind of tragic that we're observing the second anniversary of its passing with all signs indicating a frontal assault is going to be launched against it,” Michael Copps, a former FCC commissioner, said in a phone call with The Verge.

Republican Ajit Pai took over as FCC chairman last month, and in the weeks since, he’s made quick work of chipping away at the agency’s net neutrality rules from a number of angles: scaling back transparency requirements, approving favored service schemes, and cutting back privacy mandates.

“We ought to be beyond the net neutrality debate.”

Then on Tuesday, Pai stood on stage at Mobile World Congress and called net neutrality “a mistake,” suggesting pretty clearly that he intends to shift internet providers back to a much lighter form of regulation.

“I don’t think it's gonna be too long until we see some more votes against net neutrality,” Copps says. “To me, we ought to be beyond the net neutrality debate and talking about the future of the internet.”

Copps sees three ways that net neutrality could come under attack: one, the commission could choose not to enforce it; two, the commission could try to reverse the rules; and three, Congress could try to write its own, weaker set of rules.

Comcast share price
Comcast suffering the effects of overbearing regulation.

“I don't know where that assault is going to originate,” Copps says. “Originally, I thought the Congress, but I'm thinking now maybe more likely there'll be something more from the FCC first.”

And it’s looking like he’s right. Pai seems to be setting the stage for a reversal of the existing net neutrality rules, using his speech yesterday to call them “outdated,” “complex,” and “heavy handed.”

The same old arguments are coming out again

You’d think that with net neutrality now in effect, we’d be able to look around to see what kind of impact the policy has had — whether it’s lived up to advocates high hopes or whether it’s destroyed the internet as opponents warned.

But for the most part, net neutrality opponents are sticking with the same arguments they used two years ago: the rules rely on law that’s too old, they’ll hurt investment, and they’ll leave internet providers uncertain of their fate.

“I don't think reclassification has been positive at all for a wide variety of reasons,” Lawrence Spiwak, president of the Phoenix Center, told The Verge in a phone call. “It has given you regulatory uncertainty. And again, telecoms is a business where you're making very big investments that are long lasting, and unless you have certainty that you're gonna be able to make a good return on your investment, you’re not going to make that investment.”

AT&T share price
AT&T unable to grow in a restrictive regulatory environment.

Michael Mandel, chief economic strategist of the Progressive Policy Institute, told The Verge that he felt it was too soon to see the positive or negative impacts of Title II reclassification. “The US telecom system is like a super tanker,” he says in a phone call. “Even if you change the rudder, it just takes a long time for the ship to change direction.”

Still, he likens the existing net neutrality rules to a “straight jacket” and says they force old regulations onto a new industry. “It didn't make any sense,” Mandel says.

But the initial signs don’t actually seem that dire — they seem, in fact, like the industry is getting along just fine. Consumerist followed up on claims by Pai yesterday that net neutrality has killed investment, and it found that they didn’t add up: all the big wired and wireless internet providers appear to have spent more in 2016.

Claims of reduced investment aren’t adding up

Pai was apparently looking at figures from USTelecom — a trade group representing AT&T, Verizon, and several dozen other internet providers — which says that broadband investment saw a $1 billion decline a year earlier, in 2015, to $76 billion. But even USTelecom calls the dip “small when compared to past economic cycles” and noted that “high oil prices” were right alongside “regulatory uncertainty” as a factor in the decline.

Wireless carriers are also rushing ahead to support gigabit LTE and to trial early 5G technologies. Pai says that “the key to realizing our 5G future” is lighter regulation, but all of the current investment in 5G started before Pai took charge of the commission, when internet providers had little reason to believe net neutrality was on the chopping block. Verizon has tests planned in 11 cities this year, and AT&T plans to roll out gigabit LTE technologies in Austin and Indianapolis.

Investment growth isn’t the only way to measure success of the broadband industry, either. Ultimately, these companies are going to keep investing if there’s money to be made, and investors sure seem to think there’s money to be made. Those stock charts you’ve seen throughout this article? They’re five years of ISP share prices going up. If net neutrality had destroyed the industry, that’s not what you’d expect to see.

So we’re left in more or less the same place we were two years, with opponents saying net neutrality is an oppressive regulatory regime, and advocates saying that it’s not. Advocates, at least, now have some stretch of history they can point to for evidence that internet providers were bluffing.

T-Mobile share price
T-Mobile crashing after net neutrality. 

“Contrary to the over-hyped fears of the carriers and their friends, nothing bad has come to pass,” says Gigi Sohn, who worked as a counselor to former FCC chairman Tom Wheeler while the net neutrality rules were being put in place. “They continue to invest heavily in their networks, they’re buying other properties ... they continue to buy edge companies and other telecoms.”

Sohn cites AT&T’s pending Time Warner merger, AT&T’s completed DirecTV deal, Charter buying Time Warner Cable, Verizon’s XO Communications acquisition, and CenturyLink purchasing Level 3 as evidence that things are looking pretty rosy for internet providers. “If the environment for being an ISP was made so poor by Title II net neutrality, would all that merger activity be going on?” Sohn asks. “I don't think so.”

“Here's the problem: what one commission can do, the next commission can undo.”

Opponents still argue that it’s hard to move forward without any certainty on what the internet’s regulatory future will look like. But the argument is sort of a strange tautology at this point, as it’s mostly their own fault. If internet providers decided to accept the rules — stop fighting them at the FCC and challenging them in court — they would be locked in place at this point. They’ve even been in effect for about a year and a half.

But as long as internet providers want to strike down any regulation placed on them — always — commission-made net neutrality rules will be susceptible to regulatory ping-pong, with the rules strengthening and weakening every time the executive branch changes hands.

Verizon share price
A company with the business acumen to buy Yahoo doing just fine.

“Congress needs to sort of end this,” says Spiwak. “They need to make a decision because here's the problem: what one commission can do, the next commission can undo.”

At this point, it’s not clear who’s going to act first. But Pai is moving forward to scale back net neutrality where he can. And if his speech yesterday is any sign, he’s interested in getting rid of it entirely.

Of course, Pai won’t say that. Pai says he’s in favor of maintaining a “free and open internet.” Republicans have been saying that while supporting policies that allow telecoms to close the internet for years now. But whether an open internet is achievable without strong rules to actually mandate an open internet is something that they plan to endlessly litigate.

Net neutrality has had two years of calm. But now, the battle’s on again.

Disclosure: Comcast is an investor in Vox Media, The Verge’s parent company.