A goal realized: Network lobbyists’ sweeping capture of their regulator

Tom Wheeler

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When the Federal Communications Commission (FCC) voted December 14 to repeal the rules protecting a fast, fair, and open internet, the lobbyists for the internet service providers realized their long-envisioned strategy to gut the authority of the agency that since 1934 has been charged with overseeing the activities of the nation’s essential networks.

“Here’s how the telecom industry plans to defang their regulators,” a September 12, 2013 Washington Post headline announced. “[T]elecom giants including Verizon, AT&T and Comcast have launched multiple efforts to shift regulation of their broadband business to other agencies that don’t have nearly as much power as the FCC,” the article explained.

The companies’ goal: to move regulatory jurisdiction from the Federal Communications Commission to the Federal Trade Commission (FTC). Strategically, it is a brilliant sleight of hand since the FTC has no rulemaking authority and no telecommunications expertise, yet the companies and the policymakers who support them can trot out the line that the FTC will protect consumers.

By a party-line vote, the Trump FCC executed the network companies’ playbook to perfection. The press has focused on the repeal of the Obama era net neutrality rules, but the Commission went far beyond that to deliver just what the headline proclaimed. The agency responsible for oversight of the nation’s networks has disavowed responsibility for the internet.

With this vote, the FCC walked away from over a decade of bipartisan efforts to oversee the fairness and openness of companies such as Comcast, AT&T, Charter, and Verizon. These four companies control over 75 percent of the residential internet access in America, usually through a local monopoly. Henceforth, they will be able to make their own rules, subject only to very limited after-the-fact review.

For a dozen years, both Republican and Democrat FCCs have protected consumers from the actions of internet service providers. That bipartisan legacy has been renounced by the Trump FCC, which has washed its hands of any oversight responsibility.

We are only talking about the network that defines the 21st century.

We are only talking about the network that has redefined how each of us goes about our daily lives.

We are only talking about the network that has reshaped economic activity and will continue to do so.

Yet, we are also talking about a network where there will no longer be a responsible authority proactively looking out for the interests of the users against the desires of the owners.

The assertion that the FTC will be able to provide that protection adequately is an empty promise. The people at the FTC are good people, but they have neither network expertise, nor the authority to make rules. The responsibility of the FTC—spread out across the entire economy as opposed to the focused attention of the FCC—is to bring an enforcement action against a company for “unfair or deceptive acts or practices.” Such enforcement actions are backward-looking, after the horse is out of the barn—or the barn has burned down, for that matter.

There is also ongoing litigation that the FTC may, in fact, have no authority over the network companies. Interestingly, it was AT&T that sued the FTC to claim the agency had no authority over an alleged advertising violation because only the FCC had authority over them. Now, while that case is still pending, AT&T is leading the lobbying charge that the FTC has plenty of authority to protect consumers and the expert agency, the FCC, should back away from its responsibilities.

The FCC’s renunciation of the open internet is a clean-sweep for the network companies to whom we write our monthly checks. Not only have the networks captured their regulator, but have bent Congress to their will when it repealed a prior FCC rule to prohibit network operators from capturing and selling personal information without permission. Conveniently, the companies’ solution for protecting consumer privacy is also taking authority from the FCC and claiming the FTC can do the job.

The 2013 network lobbyists’ playbook has just clinched the regulatory Super Bowl. Both in Congress and the FCC, the major internet companies have delivered on their 2013 plan to shift regulatory responsibility to less powerful agencies. The result may be year-end bonuses for the company lobbyists, but it’s a lump of coal for consumers.