SALT LAKE CITY — While industry watchers are expecting Obama-era net neutrality rules to get nixed in a mid-December vote by the Federal Communication Commission, some Utah tech companies are concerned the changes could lead to stifled innovation, competitive disadvantages and unfair constrictions on web browsing.
Even so, some of Utah's congressional delegates remain staunchly in favor of the changes proposed by FCC Chairman Ajit Pai, a Trump appointee.
The FCC's Restore Internet Freedom proposal — recently made public after months of rumor and conjecture — will return internet regulations to essentially the same place they were before a set of 2015 changes reclassified broadband service as a "telecommunication" function rather than an "information exchange" process.
This is significant, as the Title II classification instituted in 2015 views internet service more like a public utility and comes with a heavier set of regulatory requirements, including restricting service providers from speeding up, slowing down or blocking access to any website, content or applications.
Roger Timmerman, CEO of the Utah Telecommunication Open Infrastructure Agency and Utopia's executive director, said the functionality of the internet since the 2015 modifications has been a positive for both consumers and innovation companies.
"Generally, we oppose the repeal of net neutrality rules and feel it's been a good thing for consumers and competition," Timmerman said. "Lack of net neutrality is a real problem, and we forecast that these rules being lifted will lead us to a 'walled garden' scenario, where providers will be able to decide what's inside the walls and what isn't."
Sen. Mike Lee, R-Utah, however, sees Pai's proposal as a positive move that will return the internet to a pre-2015 state he described as an "explosive source of growth and invention."
"Anyone who has followed the hyperbolic debate about net neutrality has likely heard that the FCC is moving to squelch competition, limit consumer choice, raise prices, and perhaps even destroy the internet,” Lee said on the Senate floor in May. "But none of this is true. Rather, the FCC is reviving the 'light-touch' regulatory environment that facilitated innovation and expanded internet access to millions of Americans over the course of many years."
The opposite contention was made by a group of people whose livelihoods are dependent on the internet in a letter sent to the FCC last week on Cyber Monday. Signed by more than 200 internet companies, including Twitter, Etsy, Pinterest and Utah-based Authentise, the group touted the $400 billion in online retail sales that occurred in 2016 and asked the commission to vote against the proposed changes, writing they would lead to "eliminating the protections that keep the internet free and open for America’s businesses and consumers."
"Without these rules, internet service providers will be able to favor certain websites and e-businesses, or the platforms they use to garner new customers over others by putting the ones that can pay in fast lanes and slowing down or even blocking others," the letter. "Businesses may have to pay a toll just to reach customers."
Authentise CEO Andre Wegner, whose Sandy-based company creates process automation software for 3-D printing, said he's concerned the proposed changes will put his company at a competitive disadvantage.
"Right now, we're all on the same level playing field but if that goes away, that's a really big problem," Wegner said. "If we can't promise industrial-strength internet service, we can't compete."
Utah's newest congressional member, Republican Rep. John Curtis, is supporting the FCC's proposal, but announced Thursday he will be holding a series of in-person town hall meetings in the next month-and-a-half where he hopes to gather input from his 3rd District constituents.
"I support the principles of net neutrality such as no blocking, throttling or paid prioritization," Curtis said in a statement. "That said, I’m concerned that heavy-handed regulation of the internet will stifle innovation and economic growth.
"As a member of Congress, I take my oversight responsibility very seriously and will continue to closely monitor the FCC's decision-making on net neutrality. Ultimately, I believe that Congress needs to take steps to modernize the statutes that govern how the internet is regulated."
While his company is located just outside of Curtis' district, the head of Draper's net-based real estate company Homie said he believes the current internet regulations are working well.
"The internet is already free, open and transparent, and startups like us are benefiting from it," said Homie co-founder and CEO Johnny Hanna. "I haven't heard any of my peers complaining. This proposal has a great name but seems to do the opposite."
Sen. Orrin Hatch is aligned with his GOP colleagues Lee and Curtis in support of the FCC's measure.
"Sen. Hatch is strongly supportive of the order," his spokesman, Matt Whitlock, said. "The internet thrived under the light-touch regulatory approach before 2015. With a turn away from heavy-handed regulation, the FCC assures continued investment in innovation, essential infrastructure, and the content and services Americans rely upon for a growing economy."
Politics appears to be playing a role in the federal regulatory realm, and changes in FCC internet regulations have not been immune.
In 2015, the re-designation of internet providers as Title II telecommunications companies was approved by the five-member commission on a 3-2 vote on partisan lines that favored Democrats at the time. The current makeup under Pai's chairmanship favors Republicans by the same margin and most expect the new proposal to find support on another 3-2 split on Dec. 14, when the Restoring Internet Freedom package is slated for a vote.
Timmerman, who is a Republican, said the new world of party-driven regulatory changes don't bode well for consumers or businesses and that, in the case of the current FCC proposals, his party's support is unsound.
"It’s unfortunate that it’s become a partisan issue," Timmermann said. "I’m on the (GOP) State Central Committee and we’re on the wrong side of it.
"People say this is Obamacare for the internet, but that’s absurd. It’s using scare tactics,' he said. "If you look at the FCC and what they do, they don’t run wireless networks, they’re a resource to research violations."19 comments on this story
Rep. Mia Love, R-Utah, declined to register either support or opposition to the proposal, but instead noted her dissatisfaction with internet rule-making falling under the jurisdiction of the FCC.
“The changes outlined in the FCC’s Restoring Internet Freedom order have the potential to affect the citizens of Utah, yet the FCC is poised to make those changes unilaterally," Love said in a statement to the Deseret News. "Any changes in regulation of the internet should be legislated through Congress.”
To review the full text of the FCC’s Restoring Internet Freedom proposal, visit: http://transition.fcc.gov/Daily_Releases/Daily_Business/2017/db1122/DOC-347927A1.pdf.