Why You Should Care About the FCC's Open Internet Actions

By Daniel B. Kline Markets Fool.com

Talking about the Federal Communications Commission's (FCC) actions to kill off the 2015 open internet rule tends to cause eyes to glaze over. For most people, this is a debate between a federal agency they barely care about and the internet service providers (ISPs) they tolerate because they want to go online. In reality, however, this issue involves more than just a technical battle between industry and government.

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It's actually a fight where cable giants are using a newly friendly FCC to subtly shift rules that protect consumers to ones that solely benefit the ISPs. The details may be boring, but the reality is that an industry that has never put consumer interests over its own profits is now regulated by an FCC that supports commerce over the general public.

Net neutrality protects people from their internet service provider. Image source: Getty Images.

What has happened?

In 2015, the FCC, led by then-chairman Tom Wheeler passed a rule that classified broadband Internet providers as utilities or common carriers under Title II of theTelecommunications Act of 1934. That ruling, which was opposed by current FCC Chairman Ajit Pai -- who was a commissioner in 2015 -- prevented blocking, throttling, and paid prioritization of content on the internet.

The current, Republican-controlled FCC has begun the process of ending net neutrality regulation. Under the new rules, the FCC would no longer regulate ISPs as utilities. Instead, authority over internet providers would revert to the Federal Trade Commission (FTC), an agency with very limited regulatory power.

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It's what they don't say

The cable industry wants the public to believe they support an open internet. The Internet & Television Association (NCTA), a trade organization representing most major cable and broadband providers, even took out an ad in The Washington Post explaining its commitment to an open internet. In the ad, the group makes what sounds like a passionate defense of the concept.

What's missing is that the end of Title II classification would allow ISPs to essentially set their own definition of net neutrality/open internet. The only authority the FTC would have is if an ISP makes a promise in an ad or a contract that it does not deliver on.

ISPs may be fine with their version of "open," which means letting you access any site you want, but does not prevent them from slowing down access to services like Netflix. The 2015 FCC rule, according to Consumerist, "recognizes that your ISP has both the ability and the financial incentive to speed up, slow down, charge for, or otherwise commit shenanigans with some of your internet traffic, and pre-emptively prohibits them from doing that."

That's a dead-on description of the difference between how the industry sees open internet and how the public sees it. Under the current FCC, the door has been opened for ISPs to manipulate the internet to force streaming services and other content providers (which compete with their own cable offerings) to pay up much like Neftlix did back in 2014.

Consumers are the target

Big cable wants to use the words "open internet" while also being able to make sure they can protect their bottom lines if consumers cut the cord. The best way to do that is by being able to legally charge streaming services and other content providers, or their customers, for the bandwidth needed to use their services properly.

No company or individual committed to following a rule lobbies government to get rid of it. The ISPs want be able to take the same loose approach to net neutrality/open internet that they do to billing where, in the cable space, they routinely market one price then charge another by tacking on mandatory fees.

Title II allows the FCC to enforce net neutrality. Changing the game and putting ISPs under the FTC takes away a level of protection for the public. It's hard to see why a supposed consumer watchdog organization such as the FCC is supposed to be would want that.

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Daniel Kline has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.