ICLE Statement on the FCC’s Vote to Approve the Restoring Internet Freedom Order - International Center for Law & Economics

ICLE Statement on the FCC’s Vote to Approve the Restoring Internet Freedom Order

Today, the Federal Communications Commission voted to approve the Restoring Internet Freedom Order (“RIF Order”). This initiative by FCC Chairman Ajit Pai restores the legal regime that governed the Internet throughout its first two decades of explosive growth —  a regime that was sharply curtailed by the sudden change of FCC policy in 2015 under then Chairman Tom Wheeler.

The RIF Order has a number of critical components:

By returning fixed broadband to a Title I classification and cellular broadband to a “private mobile service” classification, the Order removes the onerous, ex ante regulatory regime imposed by Title II classification.

The RIF Order applies a new, stringent transparency standard that will provide government regulators with comprehensive disclosures of Internet Service Providers’ (ISPs’) conduct that will facilitate effective regulatory enforcement.

The RIF Order takes a nuanced approach to the economics underlying the broadband industry and avoids overly prescriptive ex ante rules, creating a regulatory regime better suited to the fast moving online world.

The Order fixes a major regulatory loophole, created by the 2015 Open Internet Order, that removed the FTC as an effective regulator of ISPs.

When the FCC reclassified ISPs as “telecommunications service providers” in 2015, it displaced the Federal Trade Commission — the nation’s chief consumer protection and competition agency — from regulating broadband providers. Chairman Pai has enabled the FTC to return to its proper regulatory role by restoring the the classification of ISPs as “information service providers.”  

Former Chairman Wheeler’s 2015 OIO also dismissed crucial economics literature, sometimes completely mischaracterizing entire fields of study. One of the FCC’s own economists observed at the time that “[e]conomics was in the Open Internet Order, but a fair amount of the economics was wrong, unsupported, or irrelevant.”

By contrast, Chairman Pai’s RIF Order makes extensive use of existing empirical studies as well as expert analysis submitted to the docket to craft a more optimal regulatory regime. It is this sort of nuanced understanding of the facts of broadband deployment that will promote the development of next generation services from ISPs as well as edge providers.

Chairman Pai’s open and transparent approach throughout this proceeding should be a model to regulators everywhere.

The Commission should be commended for performing this regulatory reevaluation in such an open manner. The 2015 OIO was shrouded in secrecy and, arguably, inappropriately guided by electoral politics. Incredibly, the final text of the 2015 OIO was not released to the public until 14 days after the vote.

By contrast, Chairman Pai has made great efforts to give the public access to this important process, releasing the text of the proposed Order weeks in advance of when it was scheduled for a vote.

Finally, as we have said before, Congress can end the ping-pong of hyperbolic Internet doomsday scenarios clouding the substance of the debate by amending the Communications Act or passing a new law. Until then, Chairman Pai is to be commended for restoring the FCC’s historically light-touch, pro-innovation approach to regulating broadband Internet access services.