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Internet providers are thrilled with the FCC’s plan for weaker regulations

Internet providers are thrilled with the FCC’s plan for weaker regulations

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A View Of The Comcast Center
Photo by Cindy Ord / Getty Images for Comcast

FCC chairman Ajit Pai announced today that he’s proposing to do away with the regulatory classification his predecessor used to enact tough net neutrality rules.

Instead of classifying internet providers as “common carriers” under Title II of the Telecommunications Act, they’ll instead be classified as “information services” under Title I. That’ll subject them to much more lenient oversight — and naturally, internet providers are happy to hear it.

Comcast, Verizon, AT&T, Charter, and Sprint all spoke out in support of the change after Pai announced it.

Internet providers say they support net neutrality — they just hate Title II

In their statements, the companies all try to strike a balance between celebrating the rules rollback and declaring support for an open internet. But the system internet providers want seems to rely on trusting them to adhere by net neutrality guidance, rather than putting in enforceable lines that they’re legally bound not to cross.

It’s hard to see why internet providers would be celebrating right now if, as they claim, their support for net neutrality means nothing is going to change under this new regulatory regime. Clearly, this is opening up some new options for them.

Verizon’s deputy general counsel, Kathy Grillo, starts her note by saying that “Verizon supports net neutrality,” before going into the company’s approval of the move away from Title II. “It undermines investment, reduces jobs, and stifles innovative new services,” Grilllo writes. She also says that Title II hurts competition by preventing internet providers from experimenting with new practices.

Charter CEO Tom Rutledge also opens his statement by noting that “Charter’s support for an open internet ... will never change.” But he also called the reclassification proposal “a welcome and necessary step” that will “spur investment.”

Internet providers say Title II hurts investment, but there’s not much evidence of it

Comcast CEO Brian Roberts hits those same points, saying “we fully support reversal of Title II classification” because it harms investment and innovation. He says Pai’s proposal will start “a fresh constructive dialogue” on open internet protections.

“To be clear, we continue to strongly support a free and open internet ... we don’t block, throttle, or discriminate against lawful content,” says Roberts. (Disclosure: Comcast is an investor in Vox Media, The Verge’s parent company.)

AT&T follows the same template. The company’s CEO, Randall Stephenson, starts his statement by declaring AT&T’s support for “the fundamental tenets of net neutrality.” But he goes on to say that Title II was “illogical” and “stifling.” Switching to Title I, he says, will create “a clearer path to invest more in our nation’s broadband infrastructure.”

To be very clear, there’s not much evidence this is true. There was a dip in investment in 2015, when the current net neutrality rules were enacted, but the industry’s own trade group called it “small” and said oil prices may have been a factor — not just so-called regulatory uncertainty. And the investment numbers ticked up again the next year. Meanwhile, internet providers’ stock prices are doing just fine, suggesting investors aren’t actually worried.

“The current FCC net neutrality rules are working.”

Sprint released the only statement that didn’t strongly attack Title II, though it did call out “uncertainties” caused by the current rules. (Those uncertainties being the fact that internet providers are suing to overturn them.) It added that “Sprint has always supported an open internet and will continue to do so,” but said the company looked forward to the opportunity to “refine the rules.”

T-Mobile didn’t publish a statement or immediately get back to us for comment. But the CTIA, an industry group that represents it and other wireless carriers, put out a statement supporting the reversal of Title II, saying that it would lead to more investment, more jobs, and what CTIA CEO Meredith Attwell Baker calls “common sense net neutrality rules.”

But while internet providers are happy, companies that are based on the internet aren’t.

The Internet Association, which represents three dozen or so web companies including Google, Facebook, Netflix, Amazon, Airbnb, Pinterest, Snapchat, Spotify, Dropbox, Twitter, Pandora, Etsy, eBay, PayPal, and Reddit, says that “rolling back these rules ... will result in a worse internet for consumers and less innovation online.”

“The current FCC net neutrality rules are working and these consumer protections should not be changed,” says Michael Beckerman, CEO of the Internet Association. “Consumers pay for access to the entire internet free from blocking, throttling, or paid prioritization.”

Facebook put out a statement of its own, saying “We support strong net neutrality rules and will continue to fight for rules that protect the open internet.” Netflix, Spotify, and Apple did not respond to requests for comment. Google declined to comment and pointed us to Internet Association's statement.

Web companies want net neutrality, but they aren’t tied to Title II

A huge group of startups and investors — more than 800 names total — organized in part by Y Combinator all signed a letter saying they’re “deeply concerned with [Pai’s] intention to undo the existing legal framework” for net neutrality.

The interesting thing about these statements from startups and web companies is that they don’t at all mention Title II. While these groups generally support the Title II classification, they aren’t attached to it — what they’re attached to is net neutrality, and they’re often indifferent to the legal situation as long as the rules get implemented. That’s not great news for Title II advocates, since big web companies are some of the loudest voices on their side in the fight for net neutrality.

One exception is video-sharing site Vimeo, which did specifically call out Title II in its statement deriding Pai’s intention to repeal net neutrality regulations. “The plan unveiled today demonstrates Chairman Pai’s disregard for startups and creators driving online innovation,” the company writes. “His plan would undermine one of the core tenets of the Internet that makes innovation possible, create legal uncertainty, and ultimately reduce investment in both Internet services and broadband.”

Vimeo says Pai’s argument relies on a “flawed notion” of free market competition in the broadband space. “Repealing Title II in favor of ‘voluntary’ commitments will enable this small and powerful group to continue inching closer to removing free choice on the Internet,” the company concludes.

Still, Vimeo aside, we aren’t just looking at the debate over Title II again. Pai is also blowing open another question: what happens when you detach net neutrality from Title II? The first time the FCC tried that, the commission found out it wasn’t possible.

Is it possible for the commission to enact net neutrality protections under a lighter regulatory regime this time around? No one’s really sure. And it doesn’t sound like Pai is proposing an answer to that, either. Everyone claims to be in favor of their being some sort of rules — it’s just not at all clear what they’ll look like, or whether they’ll have any teeth.

Update April 26th, 6:26PM ET: Added comment from Vimeo.