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Grow Your Business Technology

FCC Kills Net Neutrality: What It Means for Business

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Credit: Shutterstock

The FCC voted on party lines (3-2) to repeal the Open Internet Order on Dec. 14, 2017. As of now, the internet is no longer considered a Title II common carrier, which means its regulation does not fall under the purview of the FCC, but under the FTC, as was the case prior to 2015. In layman's terms, this vote marks the repeal of what many commonly refer to as net neutrality.

Defenders of net neutrality lament the FCC's decision, believing it will threaten free speech and competition by pushing certain content in the "fast lane," banishing other content to the "slow lane" and blocking content at will. Meanwhile, supporters of the FCC's decision believe a lighter-touch approach to regulation will make it easier for large companies to innovate and for small internet providers to expand their reach in rural and underserved communities.

If you're trying to play catch-up on what all this means and why it's making such big headlines, here's some background on how net neutrality came to be, what the internet was like before net neutrality and what you can expect moving forward.

Net neutrality is a casual term used to refer to the Open Internet Order (OIO), which was adopted in 2015. The aim of the OIO was to ensure that internet service providers (ISPs) enable access to all content and applications regardless of their source, without favoring or blocking a particular product or website. 

If you're wondering why the OIO wasn't passed earlier, it's because the FCC didn't have jurisdiction over ISPs. To pass the OIO, the FCC had to reclassify ISPs as common carriers under Title II. This means ISPs were classified under Title II as a public utility, like water, electricity and sewage. That action also brought them under the purview of the FCC and allowed for greater regulation to maintain net neutrality.

While this type of regulation of broadband to ensure the free flow of data had been previously considered, it was historically dismissed by Republicans and Democrats alike. For instance, in the Telecommunications Act of 1996, President Bill Clinton and Congress made a distinct separation between lightly regulated "information services" (ISPs) and heavily regulated "telecommunications services," such as phone carriers. They explained the rationale for this distinction by stating, "Internet and other interactive computer services have flourished, to the benefit of all Americans, with a minimum of government regulation."

This is an important aspect of the current debate on net neutrality, because this past decision is often cited by current supporters of the OIO repeal as a reason to deregulate the actions of ISPs. In fact, FCC Chairman Ajit Pai often points to the 20 years preceding significant FCC oversight, and the success of startups founded during that time, as proof that no additional regulation was ever needed, and supporters of the FCC's move reportedly refer to the OIO as a solution to a problem that didn't exist.

The desire for increased FCC regulation over ISPs was not born overnight. In 2007, Comcast was accused of (and subsequently found guilty of) throttling BitTorrent traffic. Two organizations, Free Press and Public Knowledge, filed a complaint with the FCC, claiming that by throttling service, Comcast violated the 2005 guidelines set forth by the FCC. 

The FCC responded by trying to enforce the order via a censure and stated that Comcast's methods violated federal policy. In 2010, Comcast took the FCC to court to fight the ruling, claiming that the FCC did not have adequate jurisdiction over ISPs and therefore couldn't enforce rules. The courts sided with Comcast, citing its designation under Title I as the reason the FCC had no ground. 

Following the 2010 ruling, the FCC set out to establish clearer broadband guidelines and published the first draft of the OIO. In 2011, Verizon sued the FCC, claiming it had no legal jurisdiction over an ISP and that the OIO was therefore unlawful. 

In 2014, the U.S. Court of Appeals for the D.C. Circuit upheld Verizon's assertions, stating that the OIO could only apply to common carriers and not to Title I organizations such as broadband providers. However, since the FCC was the organization that designated broadband providers as Title I in the first place, it was considered within its purview to change that designation. 

So, in 2015, the FCC officially made ISPs a common carrier, or Title II organization, which meant they were subject to the rules of the OIO. The OIO mandated that there be no blocking, throttling or paid prioritization by ISPs.

It's important to understand this chain of events, because proponents of net neutrality point to incidences like Comcast's throttling as evidence that more regulation was necessary, and that the OIO was a reaction to a very real need and not, as detractors often claim, regulation for regulation's sake.  

The vote is over, but there is still a lot to be done. The new regulations will be revised for clarity in the next couple of weeks and eventually filed with the Federal Register, at which point the OIO will officially be repealed.

Under this new ruling, ISPs will be free to offer prioritized services to some clients and limit services to others, so long as such decisions are made public. In other words, a major ISP could decide to offer fast-lane service (at a price) to a large client, like Amazon, and then slow down service for all of Amazon's competitors. The caveat of making such deals known publicly does little to assuage the concerns of the pro-neutrality set, as they fear that the details of arrangements like these will be hidden in the fine print of user agreements that largely go unread. There is also concern that pay-to-play ISP services will make it harder for startup companies to gain a foothold and that free speech itself may be threatened.

Those who support the FCC's ruling believe very little will change for internet users, and that only major internet companies will be affected (by being forced to pay for the bandwidth they consume). Some people even argue that service will get better for users under the FTC's oversight of ISPs – that creating fast lanes for major bandwidth consumers, and secondary lanes for smaller consumers, makes sense economically and from a service standpoint.

All we can do is wait and see.

Mona Bushnell

Mona Bushnell is a New York City-based Staff Writer for Tom’s IT Pro, Business.com and Business News Daily. She has a B.A. in Writing, Literature, and Publishing from Emerson College and has previously worked as an IT Technician, a Copywriter, a Software Administrator, a Scheduling Manager and an Editorial Writer. Mona began freelance writing full-time in 2014 and joined the Purch team in 2017.