FCC headquarters in Washington, D.C.

(Reuters) The U.S. Federal Communications Commission voted 2-1 on Thursday to advance a Republican plan to reverse the Obama administration’s 2015 “Net Neutrality” order.

FCC chairman Ajit Pai has proposed the commission repeal the rules that reclassified internet service providers as if they were utilities. He thinks the open internet rules by President Barack Obama, a Democrat, were unnecessary and harm jobs and investment.

“We propose to repeal utility-style regulation,” Pai said Thursday. “The evidence so far strongly suggests that this is the right way to go.”

The public will have until mid-August to offer comments before the FCC votes on a final plan.

Pai wants public input on whether the FCC has the authority or should keep its “bright line” rules barring internet companies from blocking, throttling or giving “fast lanes” to some websites. He has not committed to retaining any rules, but said he favors an “open internet.”

Pai said he would make a final proposal public before a final vote and said the FCC will conduct a cost-benefit analysis.

Democratic FCC Commissioner Mignon Clyburn, who voted against the plan, said the end game appears to be an internet without FCC regulatory oversight. She said the proposal “jeopardizes the ability of the open internet to function tomorrow, as it does today.”

The FCC, which has already received more than 1 million comments, is also seeking comment on whether U.S. states should be able to set their own broadband privacy or other regulations.

Facebook, Alphabet Inc, and others back Net Neutrality rules, saying they guarantee equal access to the internet.

Broadband providers AT&T Inc, Verizon Communications, and Comcast oppose the 2015 order, saying it would discourage investment and innovation.

Internet providers insist they will not engage in blocking or throttling even in the absence of rules, but critics are skeptical.

Senator Brian Schatz, a Democrat, said “it will take millions of people standing up, just like they did before, to say that the internet needs to stay free and open. That’s what it will take to win.”

Comcast, Charter Communications, and Altice USA signed an advertisement Wednesday saying they are “committed to an open internet that gives you the freedom to be in charge of your online experience…. We do not block, throttle or otherwise impair your online activity.”

USTelecom, an industry trade group, said the FCC “is moving the conversation beyond the merits of Net Neutrality to how best to safeguard this universally embraced value with a modern, constructive policy framework.”

(Reporting by David Shepardson; editing by Grant McCool)

FCC Chairman Ajit Pai announces his opposition to Net Neutrality at a FreedomWorks-sponsored event at the Newseum in Washington, D.C.

WASHINGTON (Reuters) – The head of the U.S. Federal Communications Commission on Wednesday proposed overturning the landmark 2015 Obama-era Net Neutrality rules that prohibit broadband providers from giving or selling access to certain internet services over others.

FCC Chairman Ajit Pai, named by President Donald Trump in January, said at a speech in Washington he wants to reverse rules that boosted government regulatory powers over internet service providers. Proponents who fought to get the rules passed said his proposal would set off a fierce political battle over the future of the internet regulation.

The rules, which the FCC put in place in 2015 under former President Barack Obama, prohibit broadband providers from giving or selling access to speedy internet, essentially a “fast lane,” to certain internet services over others.

The rules reclassified internet service providers much like utilities. They were favored by websites who said they would guarantee equal access to the internet to all but opposed by internet service providers, who said they could eventually result in rate regulation, inhibit innovation and make it harder to manage traffic. Pai said he believed the rules depressed investment by internet providers and cost jobs.

“Do we want the government to control the internet? Or do we want to embrace the light-touch approach” in place since 1996 until revised in 2015, he asked.

A federal appeals court upheld the rules last year. The Internet Association, a group representing Facebook Inc, Alphabet Inc, and others, said the rules were working and that reversing them “will result in a worse internet for consumers and less innovation online.”

Pai said his proposal will face an initial vote on May 18 but he would not seek to finalize a reversal of the Obama rules until the FCC takes public comment, which could take several months.

Republican FCC Commissioner Mike O’Rielly said the rules “took internet policy down into a dark and horrible abyss” and said the FCC will “expunge Net Neutrality regulations from the internet.”

Internet providers such as AT&T, Verizon Communications, and Comcast Corp have argued that the Net Neutrality rules have made investment in additional capacity less likely. Comcast chairman and chief executive Brian Roberts said Pai’s proposal “creates an environment where we can have a fresh constructive dialogue.”

Democratic Senator Edward Markey predicted Pai’s plan to overturn the rules would face a “tsunami of resistance.”

Democrats and advocates of the rules called for a massive public outcry to preserve them. In 2014, comedian John Oliver in his HBO show owned by Time Warner Inc., helped galvanize support for Net Neutrality.

“I am confident that the millions of Americans who weighed in with the FCC in support of the open internet order will once again make their voices heard to demonstrate how wrongheaded this approach is,” said Senate Democrat Leader Charles Schumer.

Republicans said Democrats should work with them to pass a legislative fix to set internet rules. Senate Republican Leader Mitch McConnell praised Pai for working to reverse “the Obama Administration’s eight-year regulatory assault on all aspects of our economy.”

(Reporting by David Shepardson; Editing by Tom Brown, Diane Craft and David Gregorio)

Ajit Pai, Chairman of U.S Federal Communications Commission, delivers his keynote speech at Mobile World Congress in Barcelona, Spain, February 28, 2017. REUTERS/Eric Gaillard

WASHINGTON (Reuters) – The U.S. Federal Communications Commission plans to reverse an Obama era decision that allowed it to approve companies to offer government-subsidized telecommunications services to low-income families, the agency’s Republican head said on Wednesday.

FCC chairman Ajit Pai has said telecoms service providers exploited loopholes in the “Lifeline” program for their own gain and states should decide which companies provide the internet, mobile phone and fixed line services to poorer Americans.

Democrats say Pai’s moves are aimed at winding down the program, but Pai has said he just wants to reform Lifeline to prevent fraud.

On Wednesday Pai said the commission would not approve about three dozen pending applications from companies that wanted to join Lifeline. He said the agency would not defend prior FCC actions with regards the program in a case pending before the U.S. Court of Appeals.

Twelve states have challenged the FCC’s order before the appeals court allowing the agency to approve companies to offer services. Pai said the FCC would ask the court to send the case back to the agency so it can reverse the decision and let states take the lead on approving companies.

“Congress gave state governments, not the FCC, the primary responsibility for approving which companies can participate in the Lifeline,” Pai said.

Putting the approval process in the hands of state utility commissions is essential to police against fraud, he added.

A group of U.S. House Democrats said Pai’s decision was an effort “to inflict death by a thousand cuts” to Lifeline, which has provided more than $1.5 billion in annual subsidies in recent years.

“Through lawyerly maneuvering, the FCC is trying to disguise its efforts to eliminate a system designed to make it easier for anyone who needs access to broadband to get it,” they said in a statement.

In March 2016, the FCC voted to expand the $9.25 a month telephone subsidy to include internet access. Pai said over 3.5 million Americans were currently receiving subsidized broadband service through Lifeline from 259 providers.

The FCC has estimated that 95 percent of U.S. households with incomes of at least $150,000 have access to high-speed internet, while less than half of households with incomes lower than $25,000 have Internet access at home.

FCC Commissioner Mignon Clyburn said Wednesday Pai’s decision means “low-income Americans will have less choice for Lifeline broadband, and potential providers who want to serve low-income Americans will face greater barriers to entry and regulatory uncertainty.”

(Reporting by David Shepardson; Editing by Andrew Hay)

A conservative group funded by corporate interests and the Koch Brothers has asked FCC chairman Ajit Pai to answer its petition and move expeditiously to cancel the prohibition of data caps/usage-based pricing as a condition for FCC approval of Charter Communications’ acquisition of Time Warner Cable and Bright House Networks.

A number of pro-consumer deal conditions were included as part of the merger transaction’s approval, and won the support of a majority of FCC commissioners under the leadership of former FCC chairman Thomas Wheeler, appointed by President Barack Obama.

The Competitive Enterprise Institute (CEI) is hopeful that with Wheeler out of office and a new Republican majority at the FCC under the Trump Administration means the FCC will end requirements that Charter offer unlimited data plans, discounted internet access for low-income consumers, and start allowing Charter to charge fees to Netflix and other content providers to connect to its broadband customers. CEI has every reason to be hopeful, pointing out Chairman Pai is a fan of data caps on residential broadband service, opposes Net Neutrality, and recently effectively killed a Lifeline program that would have extended inexpensive internet access to the poor.

CEI:

As then-Commissioner Pai wrote in 2016, this condition is neither “fair” nor “progressive.” Instead, he called this “the paradigmatic case of the 99% subsidizing the 1%,” as it encourages Charter to raise prices on all consumers in response to costs stemming from the activities of a “bandwidth-hungry few.” Other problematic conditions include the ban on Charter charging “edge providers” a price for interconnection and the requirement that the company operate a “low-income broadband program” for customers who meet certain criteria.

The group is optimistic Pai will oversee the unwinding of Charter’s deal conditions largely pushed by former FCC chairman Thomas Wheeler, after Pai recently led the charge to revoke another condition required of Charter in return for merger approval – a commitment to expand its cable network to pass at least one million new homes that already receive broadband service from another provider.

Pai also opposed the low-income internet program, calling it “rate regulation.” The CEI claimed the requirement will “undermine Charter’s ability to price its services in an economically rational manner.”

“Hopefully, the FCC’s new leadership will seize this opportunity to take a stand against harmful merger conditions that have nothing to do with the transaction at hand—by granting CEI’s petition,” the group wrote on its blog.

Pai

Like President Donald Trump, Ajit Pai is a busy man. He’s spent his first month as FCC chairman gutting his predecessor’s legacy, reversing pro-consumer policies, ending forays into set-top box competition, fair pricing for inmate phone calls, cheap internet access for the poor, ending reviews of data caps and zero rating practices, and threatening to terminate Net Neutrality with extreme prejudice.

No wonder Bob Quinn, AT&T senior executive vice president of external & legislative affairs applauded President Trump’s appointment of Pai, proclaiming he will “quickly and decisively put back in place the commonsense regulatory framework necessary to support the President’s agenda for job creation, innovation and investment. We look forward to working with him and his team and the FCC to support President Trump’s growth agenda.”

AT&T’s only growth agenda is sending customers ever-increasing bills, and with Mr. Pai at the helm of the FCC, they are sure to get their wish.

Over their terms at the FCC under the Obama Administration, Republican Commissioners Ajit Pai and Michael O’Rielly frequently complained their minority voices on the Commission were ignored and newly proposed regulations or policies would come before the FCC so quickly, there was inadequate time for public review. But since Pai teamed up with O’Rielly to abolish many of the most important achievements of his predecessor, Chairman Thomas Wheeler, they have reportedly all but ignored the sole remaining Democrat currently serving on the Commission — Mignon Clyburn.

Last Friday, Clyburn accused Pai of hypocrisy for complaining about policies being rushed for a vote without explanation before doing the same thing himself late last week.

Clyburn

“Today is apparently ‘take out the trash day.’ In an eponymous episode of the West Wing, White House Chief of Staff Josh Lyman stated: ‘Any stories we have to give the press that we’re not wild about, we give all in a lump on Friday . . . Because no one reads the paper on Saturday,'” Clyburn said in a statement. “Today multiple Bureaus retract—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. In the past, then-Commissioner Pai was critical of the agency majority for not providing sufficient reasoning behind its decisions.”

Clyburn’s office asked for more than the allotted two days to review a dozen items that suddenly appeared on the FCC’s agenda.

“We were rebuffed,” Clyburn wrote.

Clyburn then accused Pai of violating the Administrative Procedure Act, which requires adequate public notice and a comment period for public input. When she asked the chairman to comply with the “reasoned decision-making requirements of the APA,” she was told ‘No deal.’

Mr. Pai’s regulatory rollback agenda has moved with breathtaking speed, according to some FCC observers. Consumer group Free Press today called Pai’s progress “Orwellian.” Over less than a month, Pai — with the help of Commissioner O’Rielly — has:

• Announced the formation of a Broadband Deployment Advisory Committee that is expected to be stacked with industry stakeholders that will recommend reform the FCC’s pole attachment rules, identify “unreasonable” regulatory barriers to broadband deployment, encourage local governments to adopt “deployment-friendly” policies, and develop a “model code” for local franchising, zoning, permitting, and rights-of-way regulations for telecom infrastructure like cell towers. Few expect the eventual “model code” to stray far from Big Telecom companies’ wish lists;
• Near-unilaterally loosened rules allowing AM radio stations to continue making their presence felt on the overcrowded FM band through the use of low-power FM “translator” stations that rebroadcast the AM station’s programming;
• Changed FCC policies to give broader notice of upcoming agenda items and policy proposals, ostensibly to improve public access to FCC rulemaking procedures. But observers suggest the change will primarily benefit industry lobbyists who will have advance detailed notice about the FCC’s upcoming agenda items, allowing them time to lobby for or against the proposals, or suggest changes;
• Rescinded “Improving the Nation’s Digital Infrastructure,” a policy paper promoting rural broadband deployment and other broadband improvements released just prior to the inauguration of President Trump. On Feb. 3, the FCC set “aside and rescinds the Digital Infrastructure Paper, and any and all guidance, determinations, recommendations, and conclusions contained therein. The Digital Infrastructure Paper will have no legal or other effect or meaning going forward.”
• Rescinded “in its entirety and effective immediately, earlier guidance provided in a March 12, 2014, public notice, DA 14-330, “Processing of Broadcast Television Applications Proposing Sharing Arrangements and Contingent Interests,” which attempted to limit ongoing media consolidation controversies including allowing one TV station to effectively operate and provide content for so-called ‘competing’ stations in a local area.
• Closed the FCC’s investigation into wireless carriers’ zero-rating policies, which allow subscribers free access to “preferred provider content” without it counting against their data plan. Critics call zero rating an end run around Net Neutrality, because providers treat their own content as “preferred.” AT&T charges other content providers to participate in its zero rating program.
• Instructed the FCC’s legal team to stop defending court challenges to its authority to ensure fair and reasonable telephone rates for incarcerated prisoners held captive to using a single carrier to make phone calls at prices much higher than what the public pays. Those rates were as high as $5.70 for a 15-minute in-state collect call placed from an incarceration facility in Kentucky. In that state alone, consumers effectively paid $2.79 million in kickbacks to state prison systems or a county jail. In contrast, a similar 15-minute call placed from a West Virginia jail or prison would cost $0.48. As a result of Pai’s actions, companies like Global Tel*Link, Securus, and Telmate “can continue the practice of price gouging prisoners and their families,” according to Prison Phone Justice;
• Ended former FCC Chairman Wheeler’s attempt to force competition in the cable set-top box marketplace, allowing consumers to take a bite out of the $20 billion cable companies make in rental fees annually. At least 99% of subscribers now pay an average of $231 a year to lease the boxes, even after the company has fully recouped their original cost. Customers in Canada can buy their own set-top boxes and DVRs.
• Killed an expansion of the FCC’s Lifeline program to offer discounted internet access to the poor. Pai reversed approvals made to nine providers — none accused of waste, fraud, or abuse — including Kajeet, Spot On, Boomerang Wireless, KonaTel, FreedomPop, Applied Research Designs, Liberty Cablevision of Puerto Rico, Northland Cable Television and Wabash Independent Networks. Pai later defended the move claiming his predecessor rushed through approval of the providers and he was rescinding those “midnight rules” as current chairman. Many Republicans are seeking a complete elimination of the Lifeline program.
• Rescinded the latest progress report on modernizing the Universal Service Fund’s E-Rate program, which is designed to subsidize telecom services for schools and libraries. It could be the first step in eliminating or dramatically reforming the Fund;
• Gave two violators of the FCC’s rules on properly collecting and reporting information about the source of political advertising aired on stations air a free pass.
• Threw out a white paper from the FCC’s own Homeland Security Bureau advising the agency on cybersecurity issues. Pai doesn’t think the FCC should be involved in cybersecurity, so anything contrary to his agenda of reducing the role of the FCC is likely destined for the nearest wastepaper basket.

FCC letter to AT&T’s Bob Quinn letting him know the company is off the hook with the FCC on zero rating.

“Ajit Pai has been on the wrong side of just about every major issue that has come before the FCC during his tenure,” said Craig Aaron, president of Free Press. “He’s never met a mega-merger he didn’t like or a public safeguard he didn’t try to undermine. He’s been an inveterate opponent of Net Neutrality, expanded broadband access for low-income families, broadband privacy, prison-phone justice, media diversity and more. If Trump really wanted an FCC chairman who’d stand up against the runaway media consolidation that he himself decried in the AT&T/Time Warner deal, Pai would have been his last choice — though corporate lobbyists across the capital are probably thrilled.”