Internet companies are arming for a “bloody, high profile battle” to protect current net neutrality rules, Cowen and Co.’s Paul Gallant says, based on notes made public today from a meeting that company representatives had yesterday with FCC Chairman Ajit Pai.
The ex parte filing from the Internet Association — whose members include Amazon, Facebook, Google, LinkedIn, Microsoft, Netflix, Twitter, and Uber — says reps told Pai that it “continues its vigorous support” for current rules.
“The internet industry is uniform in its belief that net neutrality preserves the consumer experience, competition, and innovation online,” the IA adds. “In other words, existing net neutrality should be enforced and kept intact.”
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The open internet rules bar service providers from favoring some services over others. For example, it would be illegal for Comcast to throttle the speed of Netflix transmissions to help Hulu, a service it co-owns.
At issue is the FCC’s 2015 decision to classify the internet as a common carrier service similar to phones that’s subject to regulation under Title II of the Communications Act. It made the change after court rulings held that this was needed to justify the FCC’s authority to police open internet violations.
Still, it infuriated cable and phone company ISPs. They said that they did not, and would not, tip the scales — adding that the change would chill investment.
Pai agreed, calling the FCC vote a “mistake.” He’s preparing an effort to scrap the change. Previously, the internet was lightly regulated under Section 706 of the Telecommunications Act of 1996.
But IA told Pai that the current system under Title II “is working well and has been upheld by a D.C. Circuit [Court] panel.” What’s more, it “did not have a negative impact on broadband internet access service investment.”
The group underscores that the issue is “important to our members” and “should apply regardless of whether a user accesses the internet from a wireline, fixed wireless, or mobile broadband provider.”
The IA’s comments suggest that internet companies will fight Pai “in concert with widespread grassroots involvement” that will “make this a bloodier battle,” Gallant says.
Pai probably won’t back down, though. “That would clearly be positive for ISPs,” the analyst adds. But he notes that “unless Congress locks this lighter-touch framework into legislation — which we view as unlikely — a future FCC could undo the current FCC’s pro-ISP moves.”
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