Former FCC Chairman Tom Wheeler (left), and new FCC Chairman Ajit Pai (right). Photo by Getty Images.

With a new President comes a new FCC. The agency has a new chairman who already started making big changes over the last few days. Here’s what’s happening and how it affects the principle of net neutrality going forward.


Ajit Pai Is Now the New FCC Chairman

If you haven’t been keeping up with FCC news—and we can hardly blame you, there’s a lot going on in the world of politics—the biggest change is to the agency’s leadership. The FCC is run by five Commissioners (traditionally three from one political party, two from the other), one of whom is named chairman who leads the agency. President Trump named Commissioner Ajit Pai the new chairman on January 23rd, replacing Tom Wheeler. Former Chairman Wheeler was responsible for the 2015 push to treat the internet as a utility under Title II rules, which we argued was a good thing. Notably, Ajit Pai voted against that order, but we’ll come back to that.


Meanwhile, Wheeler’s seat—as well as the one left by Jessica Rosenworcel, whose term ended on January 2017—are still open. President Trump can appoint two people to replace them, then they will have to be confirmed by the Senate. However, no matter who the President appoints, the Republican commissioners will have a 3-2 majority, meaning that Pai’s agenda will probably win out.

Even before the seats are filled, however, Pai has already begun to take action. Over the last week, Pai has quietly issued a series of orders within the FCC. Many of these received very little attention, often meriting only small updates on the agency’s website. However, the changes to FCC policy already have far-reaching implications.

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The FCC Has Dropped Its Investigation Into Zero-Rating Data

Over the last few years, carriers and internet service providers have moved away from unlimited data plans to metered connections. Under these plans, you pay based on how much data you download. Zero-rating (sometimes called “sponsored data”) lets an ISP decides that a certain type of data doesn’t count against your cap. So, for example, T-Mobile might limit you to 3GB of mobile data, but you can stream as much YouTube as you want with Binge On, as long as you don’t mind reduced video quality.


Zero-rating plans are pitched as a “free” benefit to consumers, and they do sort of feel like it. You get to download more stuff for the same amount of money. In fact, from most customers’ perspective, it’s a pretty sweet deal. However, the long-term problem is that it sets up internet providers as gatekeepers, deciding which services get an advantage in the market. Spotify might not count towards your data cap, but a startup called NuMusic that wants to be the next Spotify will still have to follow the old rules. To be fair, some companies like T-Mobile don’t charge for this special access so all companies are still on equal footing. Others like those from AT&T and Verizon, though, can cost money. Not only does this make it more expensive for new companies to enter the market, but it can raise the cost of the services you use everyday. Worse yet, internet providers could potentially give their own media services an unfair advantage by not counting data from their own products against your data cap, but charging competitors.

Prior to the change in management, the FCC was investigating these programs to see how they impact consumers. On February 3rd, Chairman Pai announced that the FCC was ending this investigation. In a statement on the subject, he said that zero-rating plans were “popular among consumers” and that the agency will no longer be pursuing the topic at all. There was no information resulting from the investigation released along with the statement, so it’s unclear if the FCC found nothing harmful, or if it just decided to stop looking, but the timing points toward the latter.


More importantly, it signals both to consumers and companies that zero-rating is here to stay. At least for the next few years. If Verizon, Comcast, or AT&T want to implement a more extreme plan to give users “free” data as long as someone else pays for it, the FCC won’t make it a priority to stop them.

The Plan to Overhaul Set-Top Cable Boxes Is All But Scrapped

Photo by Mr.TinDC


Under Chairman Wheeler, the FCC was trying to pass a plan that would change the way consumers get set-top boxes for cable. Currently, cable companies can force you to rent a box from them for a monthly fee. So, if you want to buy your own cable box, you’re out of luck. Compare this with, say, internet modems. If Comcast wants you to rent a modem for $8/month, you can say no thanks and buy your own outright and use that to connect to the internet. For television, however, that’s not possible. You need a set-top box and you can only get it from the cable company.

To fix this, Wheeler’s first plan aimed to require cable companies to make their programming available to third-party set-top box manufacturers. So, for example, Motorola could build a box that you buy outright just like a modem and use it to watch TV. That plan quickly died. After some pushback from the cable industry, the FCC settled on a plan that would require cable companies to make apps for other set-top boxes that can do the same thing your cable box does. Under this new plan, if you wanted to watch TV or record shows, you could do it from the Xfinity or AT&T app on a Roku, rather than renting a special box. It wasn’t the plan the FCC really wanted, but it was a decent compromise.


That plan has now been shelved as well. Wheeler’s last proposal was “on circulation” for the last several months, which meant that the FCC could vote on it at any time. Chairman Pai, on the other hand, removed it from circulation. The overall proceeding on the subject is still open, which means that the FCC could come forward with a new proposal later, but it will be different from either of the previous plans that Wheeler put forward.

As for whether Pai will tackle the issue at all, it’s unclear. He has voted against Wheeler’s proposals before, however in one of his dissents Pai has admitted that consumers shouldn’t be required to buy expensive, clunky set-top boxes just to watch the TV they’re already paying for. Pai says he would rather eliminate the box altogether, so the FCC may come forward with a new proposal aimed at achieving that goal. In the meantime, though, we’re stuck in limbo on this topic as we have been for the last few years.


Some Recent Broadband Subsidies For Low-Income Households Are Being Rolled Back

The FCC runs a program called Lifeline that subsidizes telephone service for low-income households. Recently, it was expanded to include broadband, allowing providers to give poorer homes up to a $9.25 discount on internet-only service. Nine companies (including FreedomPop and Boomerang) were approved to join in this program. However, Pai has rescinded their Lifeline designation, which means that some customers will miss out on the subsidy.


While that sounds bad in the short term, it’s worth pointing out that there are already over 900 companies included in the Lifeline program, so the program is far from dead. However, as Ars Technica points out, this was the first time that companies were added on a nationwide basis. Previously, if a company wanted to get its Lifeline designation, it had to apply for the special status in every single state where it wanted to offer the discount.

Over the long term, this may simply be the new FCC trying to do the same thing their own way. Several of those nine companies only received their Lifeline status two days before the new president’s inauguration (which was also the day Wheeler stepped down). Pai has stated that one of his goals with the FCC is to bring broadband access to everyone, and these subsidies certainly seem in line with that goal. However, Pai has not commented specifically on whether these nine companies will get their Lifeline status back. His only remark on the subject was that the various last-minute actions taken by Wheeler “should not bind us going forward.” Fortunately, the Lifeline program itself doesn’t appear to be at risk for now.


The Title II Open Internet Rules May Be At Risk

Photo remixed from The Local People Photo Archive


The immediate actions taken by the new FCC mostly deal with disagreements about how to accomplish goals, but the agency still largely wants many of the same things it did before: the death of set-top boxes, broadband access for everyone, etc. How the FCC views net neutrality, however, is changing drastically and bigger changes may be coming. Chairman Pai is, in no uncertain terms, completely opposed to Title II regulation, which means it may be on the chopping block.

As we’ve explained here, Title II is shorthand for a very old law that governed utilities like phone lines. In 2015, the FCC voted to start treating the internet as a “common carrier,” which meant the agency could employ much more strict rules. For example, it could force ISPs to charge reasonable rates and prevent unreasonable discrimination (like charging higher prices for accessing certain services).


Pai has not yet said that he will definitely push to reverse the Title II classification, however he may not need to. The FCC can choose whether or not to enforce the existing regulations. If a situation arises where an ISP does something that violates Title II rules, Pai’s FCC could simply ignore it.

For example, the FCC is working an order that would exempt internet providers with fewer than 250,000 subscribers from the truth-in-billing regulations that were part of the 2015 order. These rules required ISPs to make public disclosures about their pricing, fees, and data caps. The previous FCC envisioned this as a sort of “nutrition label” for broadband providers. According to Pai, these disclosure requirement could put too much of a burden on smaller shops that don’t have the resources to make sure they’re complying with every detail of a complicated FCC regulation. Rather than removing the rule altogether, however, the FCC will make it a policy to ignore the rule for smaller ISPs.


Pai may use a similar tactic for enforcing (or not enforcing) other Title II rules during his tenure. Revoking Title II status for ISPs would be a more permanent long-term solution, but it’s unclear if the FCC could pass such a proposal without severe backlash. While Title II isn’t perfect, it’s a pretty popular plan outside the FCC. Significant public pressure may keep Pai from pushing forward with a total backtrack.

This only covers some of the biggest changes the FCC has already made, and that’s just what Chairman can do on his own. Over the next few years, we’ll likely see bigger changes to the FCC’s agenda, with a focus on rolling back the rules. Pai has openly said his plan is to “take a weed whacker” to regulation. If you’ve been pleased with how the FCC has operated over the past few years, you’re probably going to be less satisfied over the next few years.


However, that doesn’t mean all is lost. The FCC is still (and always) open to comments from the public. If you’re facing an issue with your internet service provider, file a complaint. You can also contact the FCC by phone, email, or snail mail at any time to weigh in on an issue. As we learn more about what this new FCC plans to do, that might come in handy