Move could fundamentally reshape internet economy and consumers’ online experience
FCC Chairman Ajit Pai has said hard-and-fast rules can stifle investment and innovation in a fast-moving industry. Photo: Zach Gibson/Bloomberg News
WASHINGTON—Federal regulators this week are expected to unveil their plans for reversing Obama-era rules that require internet service providers to treat all web traffic equally, a move that could fundamentally reshape the internet economy and consumers’ online experience.
The changes, expected to be adopted at the Federal Communications Commission meeting in mid-December, would open the door to a wide range of new opportunities for internet providers, such as forming alliances with content firms to serve up their webpages or video at higher speeds and quality than those without such deals.
Such “paid prioritization” was explicitly blocked under the 2015 rules, which required internet service providers to keep all corners of the internet equally accessible to consumers, and limited the providers’ ability to favor content, including their own.
The new rules, according to industry officials, are expected to thoroughly dismantle the “open internet” plan adopted by the Obama administration’s FCC. Advocates of the current approach, including consumer groups and big internet companies, argued that such regulation is needed to curb the power of the broadband providers to affect the online environment through their control over the pipes.
Proponents of reversing them, including current FCC Chairman Ajit Pai, say hard-and-fast rules can stifle investment and innovation in a fast-moving industry. Internet service providers worried the Obama administration rules could open the door to eventual rate regulation and other heavy-handed oversight. They also viewed the rules as a solution in search of a problem, given the internet’s relative openness historically.
Mr. Pai began the process of reversing the 2015 rules earlier this year.
If the rollback survives likely legal challenges, it has the potential to reorder the online business environment. It could give internet providers such as AT&T Inc., Comcast Corp., Charter Communications Inc. and Verizon Communications Inc. more flexibility to use bundles of services and creative pricing to make their favored content more attractive to consumers.