What is Light-Touch Regulation?

One thing I’ve noticed recently is that a lot of people are climbing on board the idea of building better broadband to rural America. A lot of people seem to think that the FCC can somehow act to fix a lot of the shortcomings of rural broadband – but in doing so they have missed the entire point of what the FCC calls ‘light-touch’ regulation – because, from a practical perspective, broadband is not regulated at all.

It’s not hard to understand why people would misunderstand the situation, because ‘light-touch regulation’ is one of those euphemisms that governments invent to disguise what they are really doing. Chairman Pai at the FCC never misses an opportunity to talk about his regime of light-touch regulation. I have to wonder if there would be as much support for the light-touch regulation if that phrase was replaced with the simpler and more descriptive phrase ‘deregulated’. I suspect a lot of people would be uncomfortable that one of our largest industries is largely deregulated.

The FCC pulled off this huge change by hiding the deregulation inside of their move to undo net neutrality. The FCC didn’t just reverse the net neutrality rules put into place by the previous FCC, they killed Title II regulation – which is the authority given to the FCC by Congress to regulate ISPs as common carriers. The FCC gave up Title II authority and gave the tiny remaining vestiges of broadband regulation to the Federal Trade Commission – even though the FTC is not a regulatory agency. The FTC doesn’t create or enforce new rules – they are more like corporate police that fine corporations when they’ve abused their customers too egregiously.

What does it mean to give up Title II authority? The FCC can no longer judge, or even track broadband prices. ISPs are free to raise rates to any level they want and make any profits they want. There hasn’t been an FCC since the dawn of the broadband industry that has invoked price regulation – but the fact that they could always acted as a brake on bad ISP behavior.

The FCC can no longer intervene in disputes between ISPs or with their biggest customers. Under Title II regulation, the FCC could decide if an ISP was fairly dealing with Netflix or some other large user of broadband. When Title II regulation was killed, the FCC stopped acting as the arbiter in industry disputes – ISPs are free to act in any way they want.

The FCC can’t even intervene when ISPs abuse customers. I recently wrote about the FCC complaint process. Before the end of Title II regulation, ISPs would try to resolve issues raised during the complaint process. The FCC had the authority to make ISPs treat customers fairly if they decided to exercise it – and it was the threat of the FCC creating new rules that made ISPs willing to curb some of their worst behavior. But now the FCC is nothing more than a gatekeeper – they lamely pass on consumer complaints to ISPs, which the ISPs largely toss into the wastebasket since the FCC no longer has any regulatory teeth.

It’s not completely fair to say that ISPs are 100% deregulated because there are a few areas of regulation that were not created under Title II authority that are still in place. For example, the Patriot Act created the requirement that ISPs have to allow federal law enforcement to be able to ‘wiretap’ broadband connections in the same way they used to wiretap telephone connections. The FCC can’t shed that responsibility and so they still enforce the CALEA rules that require ISPs to respond to subpoenas.

There are also various types of privacy and billing rules that were the result of other acts by Congress, and the FCC still oversees these remaining vestiges of regulation. As an example, the whole recent controversy over removing Section 230 protections for online companies like Twitter also applies to ISPs and is enforced by the FCC.

But the core basis for FCC regulation of ISPs was due to the fact that ISPs are common carriers, similar to telephone companies or cellular carriers. ISPs provide a two-way communications path with customers, and it is that basic function that justified regulating them under Title II regulations.

The FCC undertook one of the most bizarre steps in regulatory history when their voluntarily neutered themselves as broadband regulators. They no longer have the authority to force the big telcos to provide better rural broadband. They no longer have the authority to stop an ISP from raising rates to the point of unaffordability. They no longer even have the power to stop an ISP from billing customers for non-existent products. This is all easy to remember if you replace the term light-touch regulation with unregulated.

4 thoughts on “What is Light-Touch Regulation?

  1. God save us from self-hating regulators.

    FCC and Agit Pai now, also, are on a PR blitz where they dose their twitter feed with, often self congratulatory messages including:
    . baselessly claiming increases in coverage
    . claiming drop in prices, that I’m guessing aren’t right (my own experience is the opposite)
    . claiming hard-to-justify victory over net neutrality, although it’s true the world hasn’t ended
    . comparing Agit to Jesus (literally — I’m not kidding)

    Having freed up a bunch of time by killing off the majority of their job, they’re not heavily focused on marketing themselves.

    Brendon Carr and Agit both also use their work accounts to advocate various right-of-center political points of view including lots of hating on China for Covid response and human rights things. Which may or may not be right, but don’t have anything to do with their FCC roles.

    Personally, also I’m kind of tired about hearing about Agit’s family, seeing little science blurbs, and pictures of scary bugs. But, that’s in the bottom third of what’s inappropriate in a taxpayer funded twitter feed, imo. He’s got a personal feed that’s invite-only.

    I recently discovered that the head of the Rural Internet advocacy group, NTCA, is, like Agit, an ex-Verizon VP. Which, on one hand sort of makes sense, given the skill set needed. On the other hand, has incredibly bad optics given who tends to have taxpayer money funneled to them.

    I’d love to see how much taxpayer money top ISPs get. I’d love to be surprised.

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  2. I have always had a some what cynical outlook on “light-touch regulation” — both as a (previous) telecom professional, and now as a continuing telecom consumer.

    What is proposed is rarely what ends up in practicum, and rarely what works… “Light-touch regulation” can sometimes mean “touch the other guy” or “touch my competitors (but not me)”.

    Our own experiences with Verizon’s FiOS service has been “underwhelming” (… We’ve discussed this.). While the bandwidth has never been an issue — even when the house is over-full around holidays and weekends, getting VZ service when things are not working has been a harrowing and disappointing experience. Apparently, less regulation (… or “light-touch regulation”) means that the folks at Verizon do not have to care about service expectations.

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