Goodbye to net neutrality. Hello to an even-bigger AT&T?

June 11, 2018

Monday marks the official end of the U.S. government’s net neutrality rules, which had required broadband providers such as AT&T, Charter, Comcast and Verizon to treat all Web traffic equally. The repeal is part of a campaign by Ajit Pai, the Republican chairman of the Federal Communications Commission, to deregulate the telecom industry in a bid to boost its investments—particularly in rural areas.

One day after the net neutrality changes, a federal judge is set to rule on Tuesday on whether AT&T can buy Time Warner. AT&T, already the country’s second-largest wireless network, stands to gain a content trove from Time Warner that includes HBO and CNN—leading the Justice Department, which filed the lawsuit, to argue that the company could harm its rivals.

The two events in Washington could lead to further consolidation of wireless, cable and content giants, public-interest advocates say. And they fear that behemoths like AT&T might someday prioritize their own TV shows and other content over rivals’. Internet service providers, or ISPs, deny that they would engage in such a practice—yet consumer watchdogs worry that consumers would have little legal recourse if they did.

But Pai, who has visited 26 states and two territories, said he heard a different message from consumers as the government’s net neutrality rules expire. His trips to places such Dahlonega, GA, a city of roughly 6,500, illustrated that Americans feel they are “on the wrong side of the digital divide” and lack broadband options, he said in an interview in his eighth-floor office at the commission. “They are not concerned that Internet service providers are going to block access to lawful content.”

The expiring net neutrality protections, adopted at the FCC under President Barack Obama in 2015, for years prevented the likes of AT&T and Comcast from slowing Web connections, blocking access to sites and services, or charging content companies for faster delivery of streaming movies or videos. Such arrangements, known as online “fast lanes” in the eyes of critics, threatened hefty tolls that only the largest businesses could afford to pay, net neutrality advocates warned.

Beginning Monday, however, the U.S. government no longer explicitly prohibits those practices. Internet service providers are required only to publish information about how they manage their networks. Violations of their promises—or behaviors that threaten competition or consumers—now fall under the watch of the Federal Trade Commission, not the telecom-focused FCC.

When they adopted their repeal in December, Pai and his GOP allies argued that it would spare telecom giants from heavy-handed regulations that could crimp investments in broadband expansion. Democrats quickly charged that Pai had ignored roughly 22 million comments that flooded the agency as part of its official deliberations. Many of the commenters urged the FCC to preserve the government’s net neutrality protections, which had treated ISPs similar to utilities.

For now, companies like AT&T, Comcast and Verizon have said they would not block or throttle Web access or charge more for faster delivery of online content.

Pai also stressed that the FTC—the agency now in charge of policing whether telecoms abuse their power—is “going to be a powerful tool for weeding out any anti-competitive conduct.”

But some of the staunchest advocates of net neutrality protections insist the telecom industry’s commitments to not block or charge more for the delivery of some content are insufficient, while the FTC lacks the expertise and authority to hold them to account.

Some neutrality advocates—with the backing of about two dozen state attorneys general—are shifting their attention to federal court, which is soon to hear challenges claiming that Pai acted arbitrarily in overturning the Obama-era rules.

A more urgent battle is brewing in several states, which are passing their versions of net neutrality rules in defiance of the federal repeal. Oregon, Vermont and Washington state have adopted open-Internet laws, while governors in an additional six states have sought to address the matter through executive orders.

The Justice Department’s verdict on the AT&T $85 billion bid to buy Time Warner, announced in October 2016, could have broad significance. Siding with AT&T might clear the way for more consolidation, while siding with the government could cause telecom giants to think twice about buying companies in new lines of business. Even now, federal policymakers have a full dossier of proposed megamergers to review, including the combination of wireless carriers Sprint and T-Mobile.

Washington Post story

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