On the eve of the Thanksgiving holiday, the FCC decided to give ISPs an early Christmas present when it made public a draft "Internet Freedom" Declaratory Ruling, Report and Order, and Order ("Internet Freedom Order") it intends to vote into law on December 14, 2017.  The Internet Freedom Order would completely overturn the FCC's 2015 Open Internet Order and turn over almost all regulatory authority over the Internet to the Federal Trade Commission (FTC).  Here is a summary of the key points of the draft Order and its implications:

What the Declaratory Ruling Would Do:

Restore the classification of fixed and mobile broadband Internet access service as a Title I information service”—the classification affirmed by the Supreme Court and in effect until the 2015 Open Internet Order.

Reinstate the private mobile service classification of mobile broadband Internet access service.  In 2015, the FCC had declared that mobile broadband was a commercial mobile service and thus a telecommunications service.  

Inform states and localities that broadband Internet access service is an interstate service that must be regulated under a uniform federal regulatory approach.  Thus, any state or local efforts to create rules that are inconsistent with the federal rules are preempted

What the Report and Order Would Do:

Adopt transparency requirements under section 257 of the Telecommunications Act that require ISPs to disclose information about their practices to consumers, entrepreneurs, and the Commission. 

ISPs are permitted to block, throttle or prioritize paid traffic but must make these practices public under the transparency rules 

Permit consumers to complain to the Federal Trade Commission if they believe an ISP has engaged in an unfair, deceptive, or anticompetitive practice.

Eliminate the vague and expansive Internet Conduct Rule in which the FCC determined in advance whether a proposed Internet service or product offering was just and reasonable and not unreasonably discriminatory.

What the Order Would Do:

Finds that the public interest is not served by adding to the already-voluminous record in this proceeding any additional materials, including confidential materials submitted in proceedings in which ISPs have purchased or are attempting to purchase other companies.

Implications  

Remarkably here, a government agency (the FCC) has proposed to reduce its authority!  Under the new rules, other than requiring ISPs to make their practices transparent to the public, all regulatory authority of the Internet would be handled by the Federal Trade Commission.  That means, that there will be no set of regulations ISPs will be required to comply with.  Instead, if there are complaints made against individual ISPs, they will be handled on a case-by-case basis by the FTC under the antitrust laws.

While some believe some ISPs will immediately take advantage of the lack of overarching rules to make deals to prioritize traffic.  The belief here is that most will tread carefully, fearing any backlash from a public sensitized to potential ISP abuses.

Of course, the Internet Freedom Order will be appealed to the DC Circuit Court by consumer groups, and that ruling will be appealed to the High Court.  In addition, many states will still try to implement their own net neutrality rules despite the FCC's warning that it would preempt such attempts.  That is likely to result in many more lawsuits.

While under covered by the many media stories about the draft Internet Freedom Order, the most important outcome of the FCC's actions is that it could be the impetus to spur Democrats into compromising with Republicans on a final permanent regulatory regime for the Internet.  Until now, Democrats have been loath to compromise because they have focused on keeping the telecommunications classification for broadband Internet access service.  However, faced with a majority conservative FCC and Supreme Court, Democrats may feel that it would be worth it to bend on the classification issue in return for a continuation of the bright line rules of no blocking, throttling or paid prioritization of traffic.  Frankly, that would be the best outcome for this issue as it would avoid years of litigation and uncertainty.  Moreover, the bright line rules have already been supported by ISPs and their Republican backers.  This is a deal waiting to happen.  If only Congress understood that.