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Regulatory Landscape Expected to Shift Under Trump

14 Dec, 2016 By: Doug McPherson

WASHINGTON – Net neutrality rules may be history when President-elect Donald Trump takes office. The two Republicans on the Federal Communications Commission (FCC) have said they’ll overturn the rules after Trump takes the oath of office.

Commissioner Ajit Pai, a net neutrality critic, said he believes its days are numbered. “We will shift from playing defense at the FCC to going on offense,” Pai said. “On the day that the [net neutrality order] was adopted, I said that ‘I don’t know whether this plan will be vacated by a court, reversed by Congress, or overturned by a future Commission. But I do believe that its days are numbered.’ Today, I am more confident than ever that this prediction will come true.”

The FCC passed the rules with a 3-2 vote last year. They reclassify broadband as a utility service and imposed some common carrier rules on broadband providers. The regulations prohibit providers from blocking or throttling service and from charging content companies higher fees for faster delivery. The rules also prohibit providers from hindering web users and content companies from connecting with each other online.

Michael O’Rielly, the other Republican member of the FCC, has characterized the open internet order as “wrongheaded, harmful to consumers and the industry, costly, and ultimately unworthy of continuation.”

He has also said that privacy rules were “inconsistent with the Federal Trade Commission (FTC) regime that has governed the Internet until now, and will continue to govern most of it.”

Those rules, passed in October, prohibit internet service providers from drawing on information about subscribers’ web activity and app usage for ad targeting, without consumers’ explicit consent. The privacy regulations apply only to companies that provide consumers with access to broadband, like Comcast, Time Warner, and Verizon.

Meanwhile, Charter Communications Chairman and CEO Tom Rutledge told investors at an annual UBS media and telecom get-together last week that Trump-era regulatory shift was “cool.”

While others in the telecom industry have been relatively subtle about all the laissez faire talk on the FCC and other areas of government, Rutledge said, “That’s cool. I was surprised at how captured I was in the psychology of the regulatory environment. And you start to think: It’s gone. That was Google again just trying to get content for free, and not having that happen is a good thing.”

Rutledge said certain decisions, such as an agreement to eschew usage-based pricing for seven years under the Time Warner Cable/Bright House Networks merger agreement, were made with the idea that the Obama-era regulatory climate would continue for some time. 

“Under that environment, I thought it was fine, but here we are,” Rutledge said. 

And answering a question about whether he would consider more mergers and acquisitions with less regulatory scrutiny, Rutledge said, “If you had asked me in June about M&A, I’d say I’d never go to the FCC again. By October, I was OK – it was kind of like having a baby.”

About the Author: Doug McPherson

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