FCC and FTC Vow Consumer Protections, Post-‘Net Neutrality’

Managing Editor

Three days before a critical vote on “net neutrality,” two federal agencies have put forward a policy their leaders argue will protect consumers from unscrupulous behavior by internet service providers.

The Federal Communications Commission and the Federal Trade Commission on Monday announced their intent to enter into a memorandum of understanding that spells out both agencies’ duties in policing companies’ business practices related to the flow of internet content. Critics say the promised oversight won’t protect consumers or schools. 

The FCC is poised to vote Dec. 14 on an order proposed by the agency’s Republican chairman, Ajit Pai, to scrap a two-year old policy that was meant to protect net neutrality through regulation by the agency. The earlier policy was approved by the commission’s then-Democratic majority.

The net neutrality debate has unleashed a torrent of public interest that rises well beyond the traditional bounds of inside-the-Beltway regulatory policymaking.

Net neutrality is the idea that web content should be treated equally, without internet service companies discriminating by throttling content or assigning it to fast or slow lanes. Advocacy groups have reacted furiously to Pai’s proposal, which they say will give internet companies leeway in setting different standards for different content. Some school organizations fear that the new FCC plan will undermine schools’ ability to quickly access digital content that has become essential for instruction in many districts.

Pai has argued that the FCC’s earlier policy amounted to over-regulation of the internet and discouraged private sector innovation and growth that could benefit consumers. The chairman’s order sets new requirements for ISPs to be transparent about their practices to the public and the FCC. His order says the FTC would be charged with cracking down on companies that engage in unfair or deceptive practices.

The proposed MOU would essentially lay out these duties in official policy.

One of the fears raised about Pai’s order is that it may hurt small businesses that rely on relatively unrestricted delivery of content to consumers, if big companies that can pay for faster delivery win out. (K-12 advocates have raised similar concerns about startup education businesses.)

‘Robust’ Policy or ‘PR Stunt’?

The MOU says the FCC will use its authority under the federal Communications Act to “monitor the broadband market” and identify barriers to entry for entrepreneurs and small businesses. It will investigate complaints filed by consumers and take enforcement action against internet service providers that don’t make their policies publicly available.

The FTC, for its part, will investigate and take action against ISPs that engage in “unfair, deceptive, or otherwise unlawful acts or practices” that run afoul of Pai’s order. The FTC will also hold companies accountable for truthful marketing, advertising, and promotional activities related to the internet order.

The memorandum will be a “critical benefit for online consumers because it outlines the robust process by which the FCC and FTC will safeguard the public interest,” Pai said. “Instead of saddling the internet with heavy-handed regulations, we will work together to take targeted action against bad actors.”

A spokeswoman for the FCC said that the two agencies plan would sign the agreement after Thursday’s adoption of Pai’s proposal.

Critics of Pai’s order worry that the new transparency it requires will not have any meaningful effect. Companies could simply act transparently about unfair practices, and consumers will have little choice but to accept them. And some school officials question whether K-12 districts will know how to recognize banned practices by ISPs, or how to file complaints when the need arises.

Mignon Clyburn, a Democratic commissioner on the FCC, said the memorandum gives her little confidence that consumers’ rights were being safeguarded. She pointed to an earlier agreement between the FCC and FTC in 2015 that she said offered consumers more meaningful protections than the new one did.

“The agreement announced today between the FCC and FTC is a confusing, lackluster, reactionary afterthought,” Clyburn said in a statement, calling the MOU a “smoke and mirrors PR stunt.”

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