What Trump’s New Man at the FCC Means for Net Neutrality and Your Cell Bill

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Ajit Pai's decisions could impact what you pay for everything from internet access to mobile phone data plans. Here are some of the changes you should be aware of.

The Federal Communications Commission, which sets the country’s rules on TV, phone, internet and radio access and pricing, is in new hands.

President Donald J. Trump last month appointed Ajit Pai as chairman of the FCC – and he is moving quickly to make changes that could impact what you pay for everything from internet access to mobile phone data plans. Here are just a few of the ways the new man at the FCC is changing the way you use technology.

Mobile streaming video choice

One of Pai’s first high-profile acts was to call off inquiries into the “zero rating” of certain mobile data services by AT&T Mobility, T-Mobile and Verizon Wireless – each of which offers deals for streaming video that could be seen to favor particular content providers. (Zero rating is the practice of not charging users for data used by certain apps or services over the network.)

AT&T, for example, offers an unlimited data plan for customers who use an AT&T wireless phone and subscribe to DirecTV (AT&T owns DirecTV). Critics of the plan have suggested it violates both the letter and spirit of the “net neutrality” policies championed by previous FCC Chairman Tom Wheeler, who was appointed by President Barack Obama. Users of other online video streaming services (such as Amazon Prime, Netflix and Hulu) are not offered this unlimited deal (unless they also signed up for DirecTV). One of the principles of net neutrality is to establish an even playing field for internet services, so consumers are not unfairly pushed toward some services over others.

The FCC issued an order Feb. 3 stating that it had sent letters to AT&T Mobility, T-Mobile and Verizon Wireless closing the inquiries into each company’s sponsored data and zero-rating offerings and that the FCC would be taking no further action. That’s a sharp turnaround from Jan. 11, when the FCC issued this report: “Policy Review of Mobile Broadband Operators’ Sponsored Data Offerings for Zero-Rated Content and Services” – which the FCC has ordered retracted.

In the Jan. 11 report, the former FCC administration had concluded that the AT&T deal in particular might not be good for consumers. “AT&T offers Sponsored Data to third party content providers at terms and conditions that are effectively less favorable than those it offers to its affiliate, DIRECTV,” the report said. “Such arrangements likely obstruct competition for video programming services delivered over mobile Internet platforms and harm consumers by inhibiting unaffiliated edge providers’ ability to provide such service to AT&T’s wireless subscribers.”

In the short term, this will have no direct impact on consumers, as the FCC had issued only its policy review. It does suggest, however, that mobile phone providers may be allowed to continue to favor content providers they own or have key partnerships with – and that could reduce affordable mobile streaming video choices for consumers.

High-speed internet access for low-income families

In addition to the order on zero-rated content and services, the FCC also ordered the reconsideration of nine providers of high-speed internet access designated Lifeline Broadband Providers under the Lifeline Program for Low-Income Consumers. The FCC program offers low-income families a $9.25-per-month credit toward high-speed internet offered by FCC-approved providers.

The response to the order was strong. This headline in Saturday’s Los Angeles Times was typical of reactions reported in the media: “FCC is stopping 9 companies from providing subsidized Internet to the poor.”

The FCC order cites concerns about potential waste, fraud and abuse within the program as reasons for the reconsideration – and suggests the previous FCC administration did not do enough in its reviews of applications from providers to prevent these negatives. The order also gives the new FCC administration “additional time to consider measures that might be necessary to prevent further waste, fraud and abuse in the Lifeline program.”

The controversy moved Pai to respond with a blog post that he called “Setting the Record Straight on the Digital Divide.” “(M)any of the media headlines have sensationalized this story and given some an entirely misleading impression of what is going on,” he wrote. “Indeed, based on some of the coverage, one would think that we had ended Lifeline broadband subsidies altogether.”

He said the order’s impact was limited to “9 of the over 900 providers participating in the Lifeline program” and that applications of the nine internet access providers had not been rejected and remained pending. Pai did, however, reiterate his view that there is fraud and waste in the program – and that it needs to be urgently sorted out before the Lifeline program expands.

“(E)very dollar that is spent on subsidizing somebody who doesn’t need the help by definition does not go to someone who does,” he said. “That means that the Commission needs to make sure that there are strong safeguards against waste, fraud, and abuse before expanding the program to new providers.”

Rates for interstate inmate calling services

For those who have a loved one serving time in prison, another move made by the new FCC administration may hit hard. On Jan. 31, FCC Deputy General Counsel David M. Gossett informed the U.S. Court of Appeals for the District of Columbia Circuit that the FCC was abandoning a multiyear effort to regulate the costs of phone calls between those in prison and their family and friends. Gossett said in his letter to the court that the majority of the three commissioners on the FCC is now of the view that regulation of interstate inmate calling services “exceeds the agency’s lawful authority.”

FCC Commissioner Mignon L. Clyburn, an Obama appointee, has been deeply involved in the fight to bring down rates, which she says have been as high as $17 for a 15-minute call. In a blog post Feb. 7 on the FCC website, Clyburn expressed her disappointment at the decision.

“(T)he most callous indictment of us all, is how little we appear to care about the 2.7 million children, the ailing grandmothers and the other often-destitute family members who pay a heavy price just for picking up the phone and keeping in touch,” she wrote.

Clyburn has been fighting court challenges to the FCC’s attempts to regulate this issue for years. “It does not even seem to matter that all credible studies show that maintaining connections with those back home reduces the potential for future criminal activity, which ultimately means that we all pay less because we will house fewer prisoners,” she said in a statement in August on the issue. “Families spending over a thousand dollars a year on inmate calling services — sometimes for a decade or more. Fathers, mothers, brothers, and sisters (are) relocating or downsizing their homes so that they may better afford to stay in touch.”

Broader high-speed internet access

If you can be sure of one thing about FCC Chairman Pai, it’s that he’ll be putting a lot of energy into the growth of high-speed internet access. He has set up a Broadband Deployment Advisory Committee designed to look at ways to speed up the rollout of high-speed internet access. And in a recent blog post, Pai announced that he had worked with Democratic New York Gov. Andrew Cuomo; Sen. Charles Schumer, D-N.Y.; Rep. Chris Collins, R-N.Y.; and other officials to direct $170 million in federal funding to build out broadband in upstate New York to currently unserved communities.

He also talked about proposals to spend billions of dollars to ensure that all parts of the country have 4G LTE coverage for mobile data and about $2 billion on a plan “advancing fixed broadband service” nationwide. In addition, Pai says he is working with members of Congress on a plan for “Gigabit Opportunity Zones” that would encourage businesses to create ultrahigh-speed internet access in lower-income areas. 

How do you think the FCC chairman’s plans will affect you? Share your thoughts in comments below or on our Facebook page.

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