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New regulatory regime shapes up at the FCC

The direction of the Federal Communications Commission (FCC) is becoming clear under its new chairman, Ajit Pai. In short, there looks to be a big move to deregulation, and already one major plank of the Obama administration has been halted before coming into force. This is the broadband privacy rule that would have required internet service providers (ISPs) to get permission from consumers before selling data such as website browsing. The US Senate voted to overturn the rules, which were part of a move for the FCC to assume privacy enforcement from the Federal Trade Commission (FTC) following the net neutrality order. Pai, and acting chair of the FTC, Maureen Ohlhausen, have said: “Some argue that internet service providers should be treated differently because they have access to more of your personal information than companies such as Google and Facebook. But that’s not true.” They also say the claim that ISPs should be treated differently because consumers face a “unique lack of choice and competition in the broadband marketplace” does not hold up. The upshot is that the FTC should again become the privacy agency for ISPs, but the move has come under fierce criticism from privacy campaigners. The FCC is also studying restrictions on media ownership, with Pai describing a number of the rules as “quite antiquated”, and the open internet – net neutrality – order is a big target for elimination and is also being fiercely defended. The switch away from copper networks could proceed with less consumer protection, with fewer regulations and obligations on the incumbent phone utilities. One place where regulation is likely to stand is on aircraft – Pai has called the FCC’s plan to allow cellphone calls on planes “ill-conceived”. Pai says he will establish an office of economics and data (OED) that will “restore the tradition of staff economists spending time thinking about the future and publishing in the present influential white papers that keep us from being stuck in the past”. He cited previous and current spectrum auction policy as good examples of economic thinking, including the recently concluded incentive auction. A detailed talk on this can be read here.

  • Thursday, 20 April 2017

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