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Regulation - What is it Good For?

The White House Encourages Broadband Reform

President Joe Biden signed an executive order last week that covered 72 issues across a wide range of industries including healthcare, agriculture, transportation, technology, and broadband. In the broadband arena it’s hard to call this an executive order because nothing specific was ordered to change – instead, the White House is encouraging the FCC to take four specific steps:

  • It asks the FCC to limit excessive termination fees on customers who want to change Internet Service Providers.
  • The order asks the FCC to eliminate exclusive deals between landlords and ISPs in order to give renters more options for broadband, and in many cases to lower prices.
  • The executive order asks the FCC to revive efforts to require a ‘broadband nutrition label’ that would better inform consumers about the broadband they are buying and would enable the comparison of different broadband plans.
  • Finally, the order encourages the reinstatement of net neutrality.

The executive order doesn’t implement any of these changes, making this more of an executive wish list.

The odd thing about this request is that the FCC is not in a position to implement any of these changes. The primary reason is that the White House has yet to nominate a fifth FCC Commissioner to replace Ajit Pai, who retired at the start of the new administration. With an FCC deadlocked two to two along party lines, no controversial issues are going to pass in this FCC until a new Commissioner is added.

Even if a new Commissioner would start tomorrow, the FCC’s hands are tied for making any sweeping changes concerning broadband since the last FCC under Chairman Pai killed the agency’s Title II authority over broadband. The FCC can’t tackle topics like net neutrality without first reinstating Title II authority or something like it. The process of reinstating Title II authority will not be quick because the agency will have to run through its slow docket process first.

Of course, Congress could shortcut this process by giving the FCC implicit authority to regulate broadband. The agency doesn’t have that authority today because there hasn’t been a Telecom Act from Congress since 1996 and the days of dial-up Internet access. If Congress provides direct authority to regulate broadband we could stop the never-ending battle of changing the FCC’s rules with every change of party in the administration.

Perhaps this executive order is a signal that a new FCC Commissioner is on the way – but even that will take time since any nominee must go through the Senate confirmation process.

In my mind, the most important idea on this list is the broadband nutrition label. ISPs regularly mislead consumers about the broadband products they sell. The big ISPs never talk about the difference between marketing speeds and actual speeds and millions of rural customers receive broadband that is far lower than the speeds they were told they were going to get. Customers are also sold broadband with low special pricing and are only warned in the small print that prices will rise drastically at the end of the special period. It’s hard to think that any other major consumer products in the US are sold with as much deception as broadband and cable TV.

There is one important issue that is missing from the list. I’m surprised to not see data caps on this list. Data caps mostly penalize families that use the Internet in ways that it was intended to be used. ISPs that charge data caps are imposing outlandish fees that are far out of proportion with the extra broadband being delivered.

I’m sure the current FCC will put these issues onto a docket since the White House told them to do so. But it’s hard to envision any progress being made until a fifth FCC Commissioner is on board.

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