FCC Passes the “Restoring Internet Freedom” Order, Repealing Net Neutrality Rules and Restoring FTC Jurisdiction Over Online Consumer Protection

Today, the FCC voted to pass the Restoring Internet Freedom order, which repeals the 2015 “net neutrality” rules and reverts back to the “light regulatory” touch the FCC previously had in place regarding internet service providers (“ISPs”).  Of primary importance, the FCC restored the classification of Broadband Internet Access Services as “information services” under Title I of the Communications Act rather than as telecommunications services under Title II.  For purposes of data privacy and security, this reclassification (more specifically, the reversal of the 2015 reclassification) restores the jurisdiction of the Federal Trade Commission to act when broadband providers engage in anticompetitive, unfair, or deceptive acts or practices related to the security and privacy of online consumers.  While the FTC had such jurisdiction prior to the 2015 net neutrality order, they are prohibited from regulating common carriers, and so today’s order restores that jurisdiction.  Although the final order has not yet been published, today’s press releases outlines that today’s declaratory ruling, report and order, and order, will do the following:

Declaratory Ruling:

• Restores the classification of Broadband Internet Access Service as an “information service” under Title I of the Communications Act – the classification affirmed by the Supreme Court in the 2005 Brand X case.
• Reinstates the classification of mobile broadband internet access service as a private mobile service.
• Finds that the regulatory uncertainty created by utility-style Title II regulations has reduced Internet service provider (ISP) investments in networks, as well as hampered innovation, particularly among small ISPs serving rural consumers.
• Finds that public policy, in addition to legal analysis, supports the information service classification, because it is more likely to encourage broadband investment and innovation, thereby furthering the goal of closing the digital divide and benefitting the entire Internet ecosystem.
• Restores broadband consumer protection authority to the Federal Trade Commission (FTC), enabling it to apply its extensive expertise to provide uniform online protections against unfair, deceptive, and anticompetitive practices.

Report and Order

• Requires that ISPs disclose information about their practices to consumers, entrepreneurs, and the Commission, including any blocking throttling, paid prioritization, or affiliate prioritization.
• Finds that transparency, combined with market forces as well as antitrust and consumer protection laws, achieve benefits comparable to those of the 2015 “bright line” rules at lower costs.
• Eliminates the vague and expansive Internet Conduct Standards, under which the FCC could micromanage innovative business models.

Order

• Finds that the public interest is not served by adding to the already-voluminous record in this proceeding additional materials, including confidential materials submitted in other proceedings.

The order was approved by Chairman Pai, and Commissioners O’Rielly and Carr, with dissents from Commissioners Clyburn and Rosenworcel.  Chairman Pai and Commissioners Clyburn, O’Rielly, Carr and Rosenworcel each issued separate statements.