Today:  FCC to Reclassify Internet Access as Information Service, FCC Commissioners React to Reclassification of Internet Access, House Energy and Commerce Committee reaction to Internet Access Reclassification, DOJ Challenges AT&T/DirecTV’s Acquisition of Time Warner 

The Regulatory Mix will not be published 11/22/17 - 11/24/17 in observance of Thanksgiving

FCC to Reclassify Internet Access as Information Service

FCC Chairman Ajit Pai released a statement announcing he had circulated a draft order that would reclassify Broadband Internet Access Service (BIAS) as an information service.  The FCC is expected to take up this item at its December 14, 2017, Open Meeting.  He said, in part: “Today, I have shared with my colleagues a draft order that would abandon this failed approach and return to the longstanding consensus that served consumers well for decades. Under my proposal, the federal government will stop micromanaging the Internet. Instead, the FCC would simply require Internet service providers to be transparent about their practices so that consumers can buy the service plan that’s best for them and entrepreneurs and other small businesses can have the technical information they need to innovate.  Additionally, as a result of my proposal, the Federal Trade Commission will once again be able to police ISPs, protect consumers, and promote competition, just as it did before 2015.  Notably, my proposal will put the federal government’s most experienced privacy cop, the FTC, back on the beat to protect consumers’ online privacy.”  He indicated that the draft order would be released to the public on Wednesday.

Reactions to the Chairman’s announcement varied.  Calling it the “Pre-holiday News Dump,”  Commissioner Clyburn said in part””…the FCC majority is about to deliver a cornucopia full of rotten fruit, stale grains, and wilted flowers topped off with a plate full of burnt turkey.  Their Destroying Internet Freedom Order would dismantle net neutrality as we know it by giving the green light to our nation’s largest broadband providers to engage in anti-consumer practices, including blocking, slowing down traffic, and paid prioritization of online applications and services.”

For his part, Commissioner Carr applauded the proposal saying, in part:  “Prior to the FCC’s 2015 decision, consumers and innovators alike benefited from a free and open Internet because the FCC abided by a 20-year, bipartisan consensus that the government should not control or heavily regulate Internet access.  The Internet flourished under this framework.  So I fully support returning to this approach, which will promote innovation and investment for the benefit of all Americans. I look forward to casting my vote in support of Internet freedom.”

Commissioner Rosenworcel also criticized the proposal saying, in part: “Our Internet economy is the envy of the world because it is open to all.  This proposal tears at the foundation of that openness. It hands broadband providers the power to decide what voices to amplify, which sites we can visit, what connections we can make, and what communities we create.  It throttles access, stalls opportunity, and censors content.  It would be a big blunder for a slim majority of the FCC to approve these rules and saddle every Internet user with the cruel consequences.”

Commissioner O’Rielly also supported the Chairman’s proposal, saying, in part: “The time has come to overturn the market disrupting net neutrality and common carrier regulations that sacrificed decades of precedent and the independence of the agency for political ends while doing nothing to protect actual consumers… I look forward to reviewing the Chairman’s proposal and working together to ensure that the order contains the necessary legal and analytical foundations, including preemption, to implement sound policy and withstand the challenges that are certain to ensue.”

Also reacting to Chairman Pai’s announcement, House Energy and Commerce Committee Chairman Greg Walden (R-OR) and Communications and Technology Subcommittee Chairman Marsha Blackburn (R-TN) released the following statement: “Today’s announcement demonstrates that the FCC, under the leadership of Ajit Pai, understands the importance of making sure the internet continues to flourish under a light-touch regulatory regime.  The past two years of heavy-handed regulation will be only a blip on the screen of a decades-long bipartisan equilibrium that successfully supported innovation and growth.  We also remain committed to ensuring clear, permanent net neutrality rules through the legislative process, encouraging investment in broadband buildout, and closing the digital divide across America.”

And FTC Chairman Ohlhausen issued her own statement saying, in part: “ The FTC has long applied its competition and consumer protection expertise to network neutrality issues…The FTC stands ready to protect broadband subscribers from anticompetitive, unfair, or deceptive acts and practices just as we protect consumers in the rest of the Internet ecosystem.”

DOJ Challenges AT&T/DirecTV’s Acquisition of Time Warner

The US Department of Justice filed a civil antitrust lawsuit to block AT&T/DirecTV’s proposed acquisition of Time Warner Inc.  Commenting on the filing, Assistant Attorney General Makan Delrahim of the Department’s Antitrust Division said:  “AT&T/DirecTV’s combination with Time Warner is unlawful, and absent an adequate remedy that would fully prevent the harms this merger would cause, the only appropriate action for the Department of Justice is to seek an injunction from a federal judge blocking the entire transaction.”  The complaint alleges that the combined company would: (1) use its control over Time Warner’s valuable and highly popular networks to hinder its rivals by forcing them to pay hundreds of millions of dollars more per year for the right to distribute those networks; (2) use its increased power to slow the industry’s transition to new and exciting video distribution models that provide greater choice for consumers, resulting in fewer innovative offerings and higher bills for American families.  DOJ said the merge would also enable the merged company to impede disruptive competition from online video distributors, competition that has allowed consumers greater choices at cheaper prices. 

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The Regulatory Mix, TMI’s daily blog of telecom related regulatory activities, is a snapshot of PUC, FCC, legislative, and occasionally court issues that our regulatory monitoring team uncovers each day. Depending on their significance, some items may be the subject of a TMI Briefing.