Federal Communications Commission Chairman Ajit Pai was in Wilmington on Friday defending his office's controversial decision in 2017 to dismantle the country's net neutrality rule.

The Obama-era regulation had prevented internet service providers from blocking or slowing websites or charging others to run faster.

Net neutrality has been favored by those who believe the internet should be treated as a public utility.

It was opposed by big internet and cable providers that lobbied hard for the repeal.

Today, in its place is a rule requiring companies like Verizon and Comcast to disclose to regulators if they slow – or give priority – to any website.

Many members of Congress want to bring the old rules back and, on Wednesday, Massachusetts Democratic Sen. Edward Markey sponsored a bill to reinstate net neutrality regulations.

While speaking at a co-working space in Wilmington, called NextFAB, Pai called Markey's bill an "unfortunate political distraction."

He said the 2017 "market-based" rule change has unleashed new investments in telecom infrastructure, though it is an assertion that has been disputed by many in the industry.

"The last year and a half of experience that we have disproves some of the predictions that were made," he said. "I still have on my desk some of the predictions that said, 'This is the end of the internet.'"

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Many of the Delaware tech workers listening to the country's top telecom regulator were skeptical of – or even disagreed with – the data he presented.

Adam Salamon, founder of Pression Inc., said internet infrastructure spending has dropped during the year since the repeal of net neutrality. That occurred despite an extra injection of potential capital from federal corporate tax cuts, passed at the end of 2017, he said.

In January, tech website Ars Technica was first to report that capital expenditures dropped 3 percent in 2018 at Comcast Corp.'s cable communications division.

The division provides internet in Delaware and the Mid-Atlantic as well as around major cities throughout the country. Comcast describes the division as "one of the nation’s largest providers of high-speed internet, video, voice, and security and automation services."

When asked how the repeal of net neutrality should incentivize new investment, Pai pointed to ancillary regulations, separate from the specific rule preventing the throttling of website speed.

The "regulation involves a whole host of regulatory things, for example, the prospect of price regulation, the fact that there was a general conduct standard that involved the SEC second guessing all kinds of business practices," he said.

In addition to throttling the speed of websites, Salamon said he also fears that internet providers may en masse begin to limit internet usage in homes, similar to what happens on many mobile phone plans.

While providers haven't yet subjected websites to tolls for faster speeds, that could happen in the future, Salamon said.

"To use the chairman's own comment, he said, 'Things don't happen quickly.'"

Responding to critics' main concern, Pai stated declaratively that a company cannot pay an internet provider to speed up its own website and slow down a competitor's.

But he did state – in what might telegraph a future regulatory action – that Google charges publishers to speed up mobile service to their pages.

"Google makes a ton of money every year from getting publishers that are struggling to pay them money for the faster delivery of their content," he said. "Is that anti-competitive? Is that pro-competitive? I'm not sure, but what I will say is that it's important for the Federal Trade Commission to evaluate all of those practices on a level playing field."

If companies begin to impose anti-competitive restrictions on websites, James McGall, electronics technical supervisor at NextFab Wilmington, said he is skeptical that regulators, such as the Federal Communications Commission, would "squash" such behavior.

"The regulatory body is constantly lobbied by the companies that have the most amount of money," he said.

Federal disclosure forms show that Comcast alone has spent nearly $6 million in lobbying in 2019. Most of the efforts are directed at Congress, though one form shows the Federal Trade Commission as the target.

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Salamon argued that the internet should be regulated like a utility company with potential profits capped at certain levels.

In Delaware, for example, Delmarva Power's prices and even its potential profits are determined by negotiations and rulings from the Delaware Public Service Commission — a board of five governor-appointed commissioners.

"Why isn't that the same for something like the internet?" Salomon asked. "I don't think anyone can say the internet is not essential. I think it's a utility."

Next-generation internet

One of the biggest upcoming investments in internet infrastructure will be for the next generation of mobile internet, called 5G. One company that desperately wants to build it in the United States is China's Huawei.

Despite dominating global internet infrastructure, Huawei has little such business in the United States after Congress in 2012 cited the company and a Chinese competitor, ZTE Corp., as security risks, telling phone carriers to avoid dealing with them.

On Thursday, Huawei challenged the law that allows officials to label a company a security risk.

The company filed a complaint asking a federal court to reject as unconstitutional a portion of this year’s U.S. military appropriations act that bars the military and its contractors from using Huawei equipment.

Asked on Friday about the controversy, Pai said the FCC has also proposed to "prohibit the use of federal funding on equipment or services that have been determined by the U.S. government to present a national security threat."

Asked if Huawei's relationship with the Chinese government, and specifically that it legally must cooperate with requests from Chinese intelligence services is concerning.

"Whatever the company might say, to the extent that they are owned and operated in China, they would have to comply with that law," he said.

Contact Karl Baker at kbaker@delawareonline.com or (302) 324-2329. Follow him on Twitter @kbaker6.