Net Neutrality Update: Fallout From FCC Chair Ajit Pai's Speech Last Week

Last Wednesday, April 26th, FCC chair Ajit Pai gave a speech to the Newseum, detailing his plan to repeal the 2015 Open Internet Order. Posted on the FCC website the next day, reactions to Pai’s plan range from hesitantly dubious to outright infuriated. 

Ajit Pai warned the American people that net neutrality had a “longstanding goal of forcing the Internet under the federal government’s control.” He also said that “Nothing about the Internet was broken in 2015. Nothing about the law had changed, and there was not a rash of ISPs blocking consumers from accessing the content, applications, or services of their choice.”

Here are Ajit Pai’s remarks.

These claims have been widely disputed. Let’s break down Pai’s major points and the responses to each one.

Disputed Claims From Ajit Pai’s Newseum Speech

We covered Pai’s previous comments about his Net Neutrality plan, which most people assumed spelled doom for the Internet’s Title II designation and the Open Internet Order.

Now that his plan has been fleshed out, let’s address the most important claims:

1. “Nothing about the Internet was broken in 2015. Nothing about the law had changed, and there was not a rash of ISPs blocking consumers from accessing the content, applications, or services of their choice.” -Ajit Pai

As we noted before, there had been several complaints of paid prioritization against large ISPs prior to the 2015 Open Internet Order, including:

• In 2004, Madison River Communications restricted use of Vonage‘s VoIP communications on its network in order to stop competition with its own landline phone service.
• In 2008, when Verizon was awarded a large part of the radio spectrum for roughly $9 billion USD, they were supposed to remain neutral and allow any software to run on its network. The company blocked third-party tethering apps in an attempt to force customers to pay an additional fee for use of their own tethering service. They even forced Google to remove third-party tethering apps from the apps store. They were forced to pay a $1.25 million USD settlement for failure to adhere to the guidelines of its spectrum acquisition.
• Comcast‘s notorious throttling of Netflix streaming for its users, until Netflix agreed to pay Comcast in late 2013.
• In 2012, AT&T blocked the use of FaceTime to its Apple iPhone customers, arguing that it used to much bandwidth. According to the affected customers, AT&T was hoping to incentivize its own voice communication services.

2. FTC Jurisdiction is “better” for American Internet Privacy

Ajit Pai argues that returning ISPs to common carrier status, which falls under the FTC regulatory jurisdiction, will allow American’s better privacy guarantees, as the FTC is “the nation’s most expert and experienced privacy regulator.”

Critics argue that Pai’s claims are false. Here are a couple of reasons why:

• The FTC can only address violations after the fact. They are not able to proactively dissuade ISPs from violating basic net neutrality principles.
• The FCC is allowed to put regulations in place that prevent violations.
• FCC regulations that were recently shot down by congress would have forced ISPs to gain customer consent to gather and sell personal information. Under the FTC, ISPs will be able to profit off of internet user’s personal information without the user being aware.

3. “Title II regulation would reduce investment in broadband infrastructure.” -Ajit Pai

Pai cited a study from the Free State Foundation, which claimed that the Open Internet Order cost $5 billion USD in broadband investment. This foundation has ties to the dubious American Legislative Exchange Council, which has been accused of lobbying for prepackaged bills in state and federal congresses even outside the realm of specific issues.

According to the Center for Public Integrity’s Nonprofit Network tool, the two biggest telecom lobbying groups, the Internet and Television Association and the Wireless Association, which represent companies like Comcast and AT&T, contributed over $600,000 USD to the Free State Foundation. In short, the Free State Foundation is directly influenced by the biggest opponents to net neutrality.

Contrary to Pai’s claim, Free Press found that major ISPs’ investments actually increased after net neutrality rules passed. As Gizmodo mentions, business for ISPs has been good enough for AT&T to drop $2 million USD on the Trump inauguration, who was the candidate most opposed to net neutrality in practice.

Comcast even recently boasted about their “consistent investment and innovation.”

Despite the facts, Ajit Pai took this imagined lack of investment even further, asserting that the lack of investment would dissuade ISPs from building Internet infrastructure in poorer communities. There is evidence that ISPs neglect building infrastructure in poorer communities, but there is zero evidence that it is due to net neutrality.

What’s Really Going on

Critics of Ajit Pai and his policies like to point out that he was a lawyer for Verizon and is likely influenced by telecom giant interests. To the most outspoken opponents of the FCC’s current direction, it seems to be that corporate interests are outweighing consumer preference.

But there is a large contingent of influential entities arguing against Pai’s plan.

Netflix and Facebook are proponents of net neutrality, and so are almost 800 other startups that want to make sure there is a level playing field within the Internet. Engine, Y Combinator, and TechStars sent a letter to Ajit Pai, arguing that “Our companies should be able to compete with incumbents on the quality of our products and services, not our capacity to pay tolls to Internet access providers.”

Here at Edgy, we argue that leaving the Internet open to manipulation by ISPs actually stifles innovation. When people are forced to pay excessive fees and surrender their personal information for the profit of large corporations, illegal behaviors are effectively encouraged. We feel strongly that a compromise between corporate interests and consumer rights must arrive and a free and open Internet.

What do you think? Which of Ajit Pai’s points did you agree with/disagree with?