FCC Commissioners Ajit Pai (top), Michael O’Rielly
In February 2015, Federal Communications Commission approved the policy that’s known as net neutrality by a 3-2 vote. (Net neutrality calls for Internet service providers, or ISPs, to treat all Internet content equally, and it prohibits ISPs from charging more for faster delivery and less buffering to glean higher revenues.)
So, who were the two opponents? The dissenting votes came from the Republicans on the board—two-term Commissioner Michael O’Rielly and first-term Commissioner Ajit Pai. (Both were nominated for commissioner by President Barack Obama.) Included in each’s justification of his dissention were statements that consumers would suffer as a result of the plan. Unfortunately, speculation drove their arguments.
Prior to his role at FCC, O’Rielly served as a policy advisor in the office of the Senate Republican Whip. Prior to that, he worked for the Republican Policy Committee in the Senate as a policy analyst for banking, commerce, technology, trade and transportation issues. He also served as a member on the House of Representatives Energy and Commerce Committee and as a telecommunications policy analyst.
Pai worked in FCC’s Office of General Counsel in the administrative law division before becoming a commissioner. Previously, he was a partner at law firm Jenner & Block. Earlier in his career, he specialized in competition matters, regulatory issues and counseling of business units on broadband initiatives at Verizon Communications.
O’Rielly is worried that net neutrality prevents ISPs from expanding service into unserved and underserved communities.
“I am very concerned that, far from a virtuous cycle, we are creating a vicious cycle where regulation deters investment in broadband, and that begets more regulation to stimulate competition and deployment that will further deter investment,” he said in a written statement.
Evan Greer of Fight for the Future, which is a nonprofit group that supports net neutrality, believes that O’Rielly might have fallen for a scare tactic. She says that while ISPs have threatened to curtail expansion in the face of new regulation, they have told their stockholders and investors that they will continue to grow.
Influence from ISPs that see their potential to stash more money in their coffers being eliminated also worries Greer about Pai’s dissention—specifically in regard to his previous work as a “high-up lawyer” at Verizon. In a written explanation of his dissention, Pai said “consumers should expect their broadband bills to go up,” because the plan “explicitly opens the door to billions of dollars in new taxes on broadband.” Pai says that “one estimate” puts the new taxes on broadband at $11 billion per year.
The estimate Pai quoted was published by Progressive Policy Institute in December 2014. At that time, the estimate on new taxes on broadband was $15 billion. However, PPI later lowered the estimate to $11 billion.
Jeremy Gillula, who is a staff technologist at Electronic Frontier Foundation, which fights for digital civil liberties, disagrees. He says a federal ban actually prevents states and municipalities from taxing broadband service. According to Gillula, the estimate that Pai quoted assumed that broadband customers would be charged for 911 service, local-number portability and telecommunications-relay service for hearing-impaired people—all things for which phone customers already pay. Additionally, Gillula says that Pai’s estimate assumed that FCC would add the universal-service charge onto broadband bills but that the agency opted against that.
Pai also claimed that while “American consumers want greater competition, faster speeds, more deployment and lower prices,” the President’s plan “is already having precisely the opposite effect.”
In an interview with Consumers Digest, Pai named three ISPs—KWISP Internet in Illinois, Wisper ISP near St. Louis and SCS Broadband in Virginia—that told him they will delay network upgrades or stop their investment in new rural areas.
However, Gillula says that even though broadband Internet service barely has been regulated over the past 10 years, large companies—AT&T, Comcast, AT&T, Time Warner and Verizon—still dominate the market.
O’Rielly claims that the net-neutrality rules will limit the capability of ISPs to “vigorously and nimbly mitigate the congestion inherent to wireless networks. I expect that the rigid Title II rules . . . will hamstring the smooth functioning of these networks.” O’Reilly didn’t say upon what he based his expectations. He added that FCC commissioners who voted for net neutrality didn’t give “a shred of evidence” that lack of regulation could be harmful.
David Segal, who is the executive director of Demand Progress, which focuses on Internet freedom and open government, says that proof exists. One major example occurred in December 2013 and January 2014, he says, when Comcast slowed the speed of Netflix’s streaming videos to get Netflix to pay to connect directly to Comcast’s network—a practice that’s known as “throttling.”
O’Rielly also claims that interested parties (read: ISPs) had no opportunity to weigh in on changes to the original rules that were proposed by FCC, including reclassification of broadband service under Title II. Greer disagrees.
“It’s totally bogus,” she says, adding that not only did interested parties have plenty of time to comment on any changes but that Title II reclassification has been on the table since May 2014.
Segal agrees. He believes that broadband Internet providers simply ignored the possibility of Title II reclassification.
Consumers Digest reached out to O’Rielly multiple times for a response to the reaction to his written comments. He did not reply to our requests.