Debate Rages on FTC as a web arbiter after neutrality of the gutted network



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The plan of the president of the Federal Communications Commission, Ajit Pai, to eviscerate the net neutrality rules of the Obama era, requires that broadband service be entrusted to an agency with different powers and a different mandate .

. The web may make sense from Pai's perspective: it is a consumer protection agency that has already taken action against high-speed Internet providers.

Photographer: Zach Gibson / Bloomberg

But there is one key difference: the FCC establishes rules designed to prevent misbehavior, while the FTC acts after an infraction has occurred. That distinction has become a key point in the debate over Pai's proposal, which would change the way government regulates the internet with far-reaching implications for a large number of industries.

Opponents say that reactive nature means that the commercial commission is too slow to oversee the rapidly evolving digital economy.

"It's not appropriate," said Gigi Sohn, who helped write the current net neutrality rules as an FCC helper in 2015. "If you wait for a case to end, it may be"

Others say that Pai is bringing a powerful watchdog to the fray.

"There is no doubt that they can present cases," said Roslyn Layton, visiting researcher at the policy group of the American Enterprise Institute in Washington. "The FTC has the right people," including economists "accustomed to looking for all kinds of new arrangements" to enforce fair competition, Layton said.

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Pai on nov. 21 proposed eliminating the FCC's 2015 network neutrality rules and allowing broadband providers such as AT & T Inc. and Comcast Corp. to block websites or charge more for faster speeds fast in their networks, as long as companies reveal their practices. His proposal faces a vote on December 14 at the agency, and it is likely to happen because Pai leads a three-member Republican majority.

The proposed order of 188 pages establishes disclosure requirements for broadband providers. The FTC could act to make sure that companies keep their promises, for example, saying that not fulfilling what was promised amounts to an unfair commercial practice.

"Transparency amplifies the power of antitrust law and the FTC Act to deter and when necessary corrective behavior that hurts consumers," according to the order proposed by the FCC.

"The FTC has extensive experience in this area" and has acted against companies that accelerate data flows, Pai told Bloomberg Radio on November 21. "They can carry out their function of consumer protection and pro competition."

Open Internet Rules Fight See Past FCC Rollback

Both the FCC and the FTC are administered by bipartisan commissions made up of five commissioners, although the FTC currently has three members. The president appoints one of the commissioners in each panel to serve as president, while no more than three may belong to the same political party. The FCC has a workforce of 1,500 compared to 1,100 FTC employees; both have budgets of approximately $ 300 million per year.

But the commissions have very different mandates and areas of expertise. The FCC, founded in 1934, traditionally regulates industries such as cable television, telephone and transmission companies. The FTC was created in 1914 and says that it works "to protect consumers by avoiding unfair, deceptive, and uncompetitive business practices" in a wide range of industries. His recent actions have ranged from researching multi-million dollar deals, such as the acquisition of Whole Foods Market by Amazon.com Inc. to the false advertising of dietary supplements.

Data Security

The FTC says it has brought more than 500 cases as the main US agency. UU that safeguards the privacy and security of the data, helping to safeguard health, credit and financial information. He is currently investigating the data security practices of Equifax Inc. after the mbadive cyber attack against the credit reporting company. He has "solid technical expertise" in areas that include social media, online advertising and Internet searches, the agency said in comments to the FCC.

"The FTC is ready to protect broadband subscribers from anticompetitive, unfair or deceptive acts and practices as we protect consumers in the rest of the internet ecosystem," said Maureen Ohlhausen, a Republican who chairs functions of the FTC, in a message sent by email after Pai published his proposal.

In a 2015 agreement with the agency, for example, The wireless unit TracFone Wireless of America Movil SAB agreed to pay $ 40 million for settle claims that cheated consumers when it sold data plans unlimited and then slowed down speeds after customers used fixed amounts.

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The FTC sued AT & T for the same problem. An appellate court panel ruled last year that the FTC lacked the authority to pursue the company because the FCC's neutrality rules at that time eliminated the FTC's jurisdiction. The FTC has appealed to the full court. The FCC has said that a loss to the FTC in that case could "immunize" AT & T from the FTC's supervision of the company's broadband services.

The FTC is divided into partisan lines about the Pai plan.

FTC Democratic Commissioner Terrell McSweeny November 1 that the FTC has experience in antitrust and consumer protection issues, but "very real and important limits" to control online competition.

"He does not have specialized experience in telecommunications, data network management practices, or in the detection of data discrimination cases," said McSweeny. "That experience is in the FCC."

The FTC has no jurisdiction over common carriers, a designation badigned to broadband providers under the 2015 FCC rules, and one that Pai would revoke. Major vendors still have common operator functions, such as voice telephone calls, and whether the FTC could regulate its broadband practices remains a matter of litigation, McSweeny said.

No & # 39; Wild West & # 39;

Broadband providers said they had no intention of blocking legal content or slowing down rival sites. They will push them to keep their word through a combination of forces, including the FTC and competition among providers, said Brendan Carr, a Republican FCC commissioner, in a broadcast on Nov. 22 on the C-SPAN cable network.

"We are not proposing to go to a kind of Wild West regime where broadband providers are free to run over consumers, far from it," Carr said. "I'm confident the FTC can handle this."

McSweeny of the FTC, in comments to the FCC, said an investigation by the commerce commission would occur only after the competitive damage has already occurred.

It can be expensive and it's difficult to solve a problem, or even detect one, McSweeny said. "For example, how could a typical consumer determine whether a slow or grainy discharge was caused by embezzlement or something routine and benign?"

Pai in an interview on November 22 on Fox News said the FTC may be just the agency to judge whether it is detrimental for a broadband provider to charge more for the fastest pbad through its network.

"In some cases, you can imagine that this type of arrangement is procompetitive, good for startups and consumers, and in cases it might not be as valuable," Pai said. "And that's exactly why the Commission Federal de Comercio is the best agency to investigate it. "

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