ISPs can now discriminate against internet services

The FCC, led by its new chairman, Ajit Pai, voted to repeal the net neutrality rules first proposed in 2014 and passed in 2015. Pai, along with commissioners Michael O'Rielly and Brendan Carr, voted to repeal the rules, while Mignon Clyburn and Jessica Rosenworcel voted to preserve them.

Pai Argues That Repeal Will Spur Competition

In the open hearing before the vote, Pai tried to make the case for the repeal of the net neutrality rules. He argued that without these strict rules, ISPs will be free to invest more money in broadband expansion, and that it would be easier for smaller ISPs to compete.

Although that sounds good in theory, the reality is that in almost half the country, ISPs have effective state-granted broadband monopolies, making it at least extremely difficult for any small player to try and compete.

As for the investment argument, Comcast’s CEO recently told investors that Title II hasn’t made things any worse for their investments:

"On Title II, it really hasn't affected the way we have been doing our business or will do our business. We believe on Open Internet and while we don't necessarily agree with the Title II implementation, we conduct our business the same we always have…"

Net neutrality may indeed not normally be needed, if the market was highly competitive and consumers could easily switch from one ISP to another in their local areas the moment one ISP began to misbehave. However, as most Americans know, that’s hardly the case right now.

Throttling And Blocking Of Internet Services

The idea for net neutrality appeared when people started realizing that the big ISPs, which have local monopolies or duopolies in many areas, could (and did) use their power to throttle, restrict, block, or generally discriminate against certain internet services.

One of the early cases of an ISP’s abuse of power was when Comcast started throttling BitTorrent traffic. The act caused some outrage against the company\, and the FCC ended up ruling against Comcast in that case. However, the new FCC doesn't seem to have a problem with Comcast doing that.
AT&T also blocked Apple’s FaceTime service over 3G until a similar backlash against the company was created.

Verizon also blocked Google Wallet for years, as it was waiting to roll out its competitive mobile payments service called Isis (no, not that ISIS). Both Verizon and Comcast were capping Netflix and YouTube before the net neutrality rules passed, as many users reported online back then, and Verizon has already started doing it again today.

Some of the same ISPs have also been found guilty of spying on their customers’ browsing, injecting ads into their browsing streams, overcharging them on their monthly bills and equipment they didn't order, and so on.

Therefore, Pai’s theory that with net neutrality rules out of the way, the ISPs and carriers would not only behave but would make the internet better for consumers, doesn’t seem to have too much evidence supporting that, but quite the contrary.

The big internet providers have already proven that given the chance to hurt competition or to simply save some money by restricting certain types of traffic, they will take it, especially if there isn’t too much competitive pressure not to do that and get away with it.

What’s Next?

The FCC chairman has already warned states not to try and pass their own net neutrality rules, implying that those rules will not count because the ISPs only need to follow FCC’s federal rules. However, this will probably have to be proven in court, which means some states will pass their own rules, and if the ISPs don’t follow them, those states can then sue the ISPs. It will be up to judges to decide whether or not the states have power over ISPs.

Congress is always an option, too. Instead of relying on an executive body such as the FCC to define what rules the ISPs should follow every four years, or whenever there’s a change in FCC leadership, Congress could establish those rules into law. The current Congress makeup doesn’t seem to lean in favor of doing that, but with new elections coming up next year, an opportunity to set net neutrality rules into law will arise.

In the meantime, New York’s Attorney General Eric Schneiderman has already committed to suing the FCC over the repeal, after Pai completely ignored the fact that two million of the “pro-repeal” public comments were made under stolen identities. Because of this, the NY AG believes that the FCC’s repeal of the rules was done under false pretense.