FCC Prepares to Hand Over Internet Oversight to FTC

FCC Prepares to Hand Over Internet Oversight to FTC
Rhett Pardon

WASHINGTON — The Federal Trade Commission and Federal Communications Commission announced their intent to enter into an agreement where the two agencies would coordinate online consumer protection efforts following the adoption of the Restoring Internet Freedom Order. 

The FCC on Thursday is expected to approve the proposed order that would toss consumer protections under current net neutrality rules made in 2015.

The plan would allow ISPs to block or throttle lawful content, or give the highest-paying websites  a better ability to reach users’ devices. It also would favor internet traffic from the ISPs’ own subsidiaries and business partners, all without any legal repercussions

With today's announcement, the FCC would scrap conduct rules governing ISPs and cede authority over the internet to the FTC.

“Instead of saddling the internet with heavy-handed regulations, we will work together to take targeted action against bad actors,” FCC Chairman Ajit Pai said in a statement. “This approach protected a free and open internet for many years prior to the FCC’s 2015 Title II Order and it will once again following the adoption of the Restoring Internet Freedom Order.”

The "memorandum of understanding," which was released today, outlines a number of ways in which the FCC and FTC will work together, including:

  • The FCC will review informal complaints concerning the compliance of ISPs with the disclosure obligations set forth in the new transparency rule. Those obligations include publicly providing information concerning an ISP’s practices with respect to blocking, throttling, paid prioritization and congestion management. Should an ISP fail to make the required disclosures — either in whole or in part — the FCC will take enforcement action.
  • The FTC will investigate and take enforcement action as appropriate against ISPs concerning the accuracy of those disclosures, as well as other deceptive or unfair acts or practices involving their broadband services.
  • The FCC and the FTC will broadly share legal and technical expertise, including the secure sharing of informal complaints regarding the subject matter of the Restoring Internet Freedom Order. The two agencies also will collaborate on consumer and industry outreach and education.

Industry attorney Corey Silverstein, of Silverstein Legal, told XBIZ that today's announcement was predicted by many.

"Nobody should be surprised by this 'memorandum of understanding' nor should anyone expect that companies such as Comcast and Verizon will seriously be held accountable for their potential failure(s) to disclose," Silverstein said. "If the FTC and the FCC were truly concerned about large ISPs taking advantage of the revocation of net neutrality, why did they support the revocation to begin with? This line of decision-making completely ignores common sense. 

"Further, how exactly is the FTC qualified to police internet providers? As it stands, the FTC is set to lose approximately $6 million in funding in 2018 under President Donald Trump’s government spending plan that was released this past May. Also, back in May, the Department of Justice’s antitrust division and the FTC proposed staffing reductions that would eliminate more than 135 positions.

"Moreover, it’s very nice to hear that the FCC and FTC will work together to the benefit for online consumers; but how?” he asked. "Without net neutrality, broadband providers can still block or throttle your service; but don’t worry because as long as they tell you about it, the FCC and the FTC may not see any issue.    

"Bottom line here is that this 'memorandum of understanding' is a weak attempt by the FTC and FCC to quiet the growing number of internet users who object to the elimination of net neutrality.

"This issue needs to continue to be followed by the adult industry because I suspect adult entertainment websites may quickly fall victim to the elimination of net neutrality. Unfortunately, the adult entertainment industry is an easy target, and I’m not so sure the FCC and FTC will utilize resources to help adult websites when they start complaining that access to their websites is being throttled."