02.06.2017

|

Updates

Roughly two weeks since President Donald Trump’s inauguration, the new Chairman of the Federal Communications Commission, Ajit Pai, has taken steps providing further evidence that he plans to roll back FCC actions taken under former Chairman Tom Wheeler, including net neutrality and broadband privacy. Chairman Pai has announced that he would revoke so-called “midnight regulations” (i.e., regulations adopted after the presidential election but before inauguration) because they “did not enjoy the support of the majority of Commissioners at the time they were taken, should not bind [the Commission] going forward.”[1]

In response, Democratic Commissioner Mignon Clyburn accused Chairman Pai of engaging in the same opaque, procedurally flawed actions for which he criticized former FCC Chairman Tom Wheeler for “retract[ing]—without a shred of explanation—several items released under the previous administration that focus on competition, consumer protection, cybersecurity and other issues core to the FCC’s mission.”  

Net Neutrality

Chairman Pai recently suggested he may follow the FCC’s approach to net neutrality previously adopted by former Republican FCC Chairman Michael Powell during the President George W. Bush administration.[2] Chairman Powell’s 2005 Internet Policy Statement expressed the FCC’s broad intent to “encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet,” but did not adopt binding federal regulations or otherwise effect the then-operative legal classification of wireless and fixed BIAS as largely unregulated “Title I” information services. Chairman Pai’s apparent endorsement of Powell’s approach suggests that he intends to similarly deregulate BIAS. 

To this end, the FCC recently closed certain net neutrality enforcement proceedings involving the practice of “zero rating” or “sponsored data” employed by certain wireless carriers and home internet providers. This practice entails a wireless carrier not counting certain third-party content against a subscriber’s wireless data plan limit, thereby incentivizing users to choose such carrier-sponsored content. In late 2016, the FCC issued an enforcement advisory that such practices were unreasonably discriminatory under the FCC’s 2015 Open Internet Order. On February 3, 2017, however, the FCC informed several wireless providers and home internet providers that it was closing the inquiries into each company’s disputed offerings, and would be taking no further action. In addition, the FCC has put on the agenda of its February 23rd meeting a proposal to extend the small business exemption from the net neutrality reporting requirements for an additional five years. 

Broadband Privacy and Cybersecurity

Many FCC observers expect that Chairman Pai will also seek to significantly reduce or otherwise eliminate the FCC’s Broadband Privacy Order. Several opponents to the rules filed petitions for reconsideration with the FCC last month. These petitions for reconsideration provide a vehicle for the FCC to undo or circumscribe the Broadband Privacy Order. In addition, the Broadband Privacy Order is a direct consequence of the reclassification of BIAS as a Title II service in the 2015 Open Internet Order, because it caused the privacy-related provisions of the Communications Act [3] (which only apply to common carriers) to apply to BIAS providers. Therefore, if Chairman Pai takes action to “re-reclassify” BIAS as a Title I information service, then BIAS providers would no longer be common carriers and would therefore be excluded from the privacy-related provisions of the Communications Act. In addition, Congress may also seek to overturn the Broadband Privacy Order by relying on the rarely utilized Congressional Review Act

In other recent actions, the FCC canceled two cybersecurity inquiries published in January 2017. One was a Notice of Inquiry related to 5G device security measures. Another was a white paper titled “Cybersecurity Risk Reduction.” It is unclear why these two actions were canceled or whether new cybersecurity proceedings will be initiated to take their place.

This update was republished in Law360 on 02.13.2017, "The Future Of Net Neutrality Under The New FCC."

ENDNOTES

[1] Strictly speaking, any regulations adopted by the majority of a quorum of FCC commissioners have “the support of the majority of commissioners at the time they were taken.” Chairman Pai appears to be making a political argument that actions taken by FCC or the staff under Chairman Wheeler after the presidential election (and before the inauguration) were, in his view, less legitimate than those taken before the election.

[2] Alex Byers, “Pai follows Powell's principles for a 'free and open internet'”, POLITICO Pro (Jan. 31, 2017).

[3] 47 U.S.C. § 222(c).

© 2017 Perkins Coie LLP