FCC Member: Net Neutrality a 'Secret Plan to Regulate Internet'

When FCC chairman Tom Wheeler distributed his net neutrality proposal to fellow commissioners last week, it was a fair assumption that it would not garner the support of Ajit Pai.

Pai, one of two Republicans on the FCC, was already skeptical of previous net neutrality efforts, and on Tuesday he solidified his opposition, characterizing the proposal as a "secret plan to regulate the Internet" with the possibility that it will lead to rate regulation and taxes.

At a press conference, he told reporters that the 332-page proposal is "worse than I imagined."

"Last week's carefully stage-managed rollout was designed to downplay the plan's massive intrusion into the Internet economy and to shield many critical details from the public," he said.

Wheeler's proposal calls for reclassifying the Internet as a Title II telecommunications service, a designation given to utilities like phone service. But his advisers said it also would limit the scope of the FCC's authority to prevent the agency from rate regulation, imposing new taxes or prohibiting bundling.

The idea behind reclassification is to give the FCC the authority to set robust rules for the Internet, like prohibitions on Internet service providers' blocking or throttling of content, or charging sites for speedier access to their subscribers.

Pai, however, contends that the plan still would allow for rate regulation. "The plan repeatedly states that the FCC will apply sections 201 and 202 of the Communications Act, including their rate regulation provisions, to determine whether prices charged by broadband providers are 'unjust or unreasonable,'" Pai said.

He also claims that the proposal "opens the door to billions of dollars in new taxes on broadband."

"The plan repeatedly states that it is only deferring a decision on new broadband taxes ... not prohibiting them," he said.

Wheeler has not released the 332-page proposal, but his staff has unveiled outlines of the regulation. As the agency has done in previous rule-making, the entire text will be released after the FCC votes on it on Feb. 26.

But Pai says that Wheeler has the authority to release the proposal now, "before the FCC makes it the law." He also appeared to back up claims by congressional Republicans that the White House may have exercised "undue influence" on the FCC when President Obama announced his support for reclassification in November.

Before Obama's announcement, Wheeler had been moving in a different direction on his net neutrality proposal, but then changed course, Pai noted, claiming that the administration "directed" the FCC to do so. Pai characterized Wheeler's proposal as "President Obama's plan to regulate the Internet."

Asked why he doesn't just release the plan by himself, Pai said that the rules were clear that he was prevented from making such a decision. "I start from the premise that the rules are the rules."

His press conference was briefly interrupted by a group of protesters, who shouted that he was merely doing the bidding of the cable and telecommunications monopoly. After they were escorted out by security, Pai said, "I want them to see the plan, too."

In response, FCC spokeswoman Kim Hart said, "The proposal will not regulate the prices broadband service providers charge their customers." She noted that mobile voice services have been classified under similar Title II rules for over two decades without the FCC regulating wireless prices.

She also said that the proposal "does not raise taxes or fees. Period. The Internet Tax Freedom Act bans state and local taxes on broadband access regardless of how the FCC classifies it. Congress already took care of it."

On Twitter, Gigi Sohn, special counsel for external affairs at the FCC, even noted that of the 332-page proposal, only eight pages are of the actual regulations, with the rest addressing the legal justification, the history of broadband regulation and addressing the record number of public comments to the agency.