Issue Brief: Net Neutrality

September 06, 2018

Issue Brief: Net Neutrality

Understanding the Issues: Net Neutrality

Net Neutrality has become a buzzword across the nation as states and the federal government debate the best ways to regulate the internet. What is net neutrality, how has the internet been regulated in the past, and what does all of this mean for Oklahoma?

History of Internet Regulation

In 1934, President Franklin D. Roosevelt asked Congress to create a Federal Communications Commission to regulate and oversee telephone service providers. The result was the 1934 Communications Act, which created the FCC and defined telephone service providers as common carriers, thus prohibiting them from providing preferential or discriminatory treatment.

Beginning in the 1980s and continuing through the early 2000s, the increasingly widespread presence of the internet in everyday life raised questions about how it should be regulated. During this time, the internet was treated as an information service, not a telecommunications service, and thus was not subject to public utility rules that apply to telephone services.

Under the Obama Administration, the FCC sought to conclude the debate about the nature of the internet, and in 2015 passed the Open Internet Order. The regulation determined that the internet is a public utility subject to the requirements of Title II of the 1934 Communications Act. The FCC used this determination to implement “net neutrality” rules for all internet service providers.

In November 2017, FCC Chairman Ajit Pai introduced a rule known as the Restoring Internet Freedom Order which sought to repeal the Obama-era mandate to regulate broadband providers as common carriers. The FCC voted 3-2 to approve the rule on December 14, 2017.

In early 2018, the United States Senate voted 52-47 to overturn the FCC’s Restoring Internet Freedom Order and to reinstate the 2015 Open Internet Order. However, the resolution failed to pass in the House of Representatives, so the Restoring Internet Freedom Order went into effect in June 2018. In response to the FCC Order, the Attorneys General of 22 states have filed lawsuits against the FCC, and multiple states—including Washington, New York, and Montana—have advanced proposals to create rules similar to the 2015 Open Internet Order within their own states. During the 2018 Oklahoma Legislative Session, SB 1543 would have directed the Corporation Commission to implement net neutrality rules similar to the 2015 FCC Order. The bill failed to advance out of committee.  

What Does Net Neutrality Mean?

The 2015 Open Internet Order established three main rules that became known as “net neutrality” protections. First, the rule prohibited internet service providers from blocking access to any site, so long as it was legal. Second, internet service providers were banned from slowing down, or “throttling,” data based on its content. Third, the order blocked internet service providers from creating paid “fast lanes” that would deliver data faster than the default speed to companies or customers who paid a higher premium.

To establish these rules, the FCC declared internet service providers “common carriers” of a public utility, subject to regulation under Title II of the 1934 Communications Act. Such a classification gave the FCC greater regulatory control over internet service providers, creating uncertainty among providers. Title II status additionally required internet service providers to adhere to a number of economic regulations from which they had previously been exempt, increasing the cost of business and impacting long-term development plans.

Why This Matters to Oklahoma

Access to fast, affordable internet is necessary for economic development. Its increasing importance means that areas with underdeveloped internet infrastructure will be left behind. Yet according to the most recent FCC data, 27% of all Oklahomans and 66% of rural Oklahomans are without access to high speed broadband internet.

Following the 2015 Open Internet Order, economic uncertainty among internet service providers caused the first slowdown in broadband infrastructure expansion outside of a recession. Reduction of broadband development in Oklahoma’s rural communities risks limiting or slowing Oklahoma’s future economic growth.

Issue Brief: Net Neutrality | Issues