Happy New Year! 2018 is set to be the most unusual year ever for the telecom industry. In every other year I can remember, there were a set of issues everyone knew the FCC was likely to grapple with. Last year with a brand new conservative Commission it was obvious that Chairman Ajit Pai was going to reverse the 2015 net neutrality rules, eliminate one-sided ISP privacy rules (with the help of Congress) and deregulate ILEC special access services. In addition, the Commission improved the pole attachment rules, modified the Lifeline program and began looking at additional switched access reform. It was easy to criticize the FCC for many of its actions, but no one could accuse the FCC of inaction, even when they had less than a full complement of five commissioners.

2018 appears to be very different and strange. Yes, the Commission could take some additional controversial actions such as mandating that a region has sufficient broadband service when only mobile services are available, as it proposed in 2017. However, with its December 14, 2017 vote to eliminate the net neutrality rules, the Commission set the tone for 2018, and that will largely consist of industry players trying to stop the Commission in its tracks.

The text of the so-called "Internet Freedom" Order has not yet been released, suggesting that some significant modifications are being made. Likely the Commission is attempting to bolster its legal arguments for reclassifying broadband Internet access service as a Title I service just two years after the last reclassification. However, if the final Order is consistent with what we know so far, and eliminates the bright line net neutrality rules of no blocking, throttling or paid prioritization of traffic, and hands regulatory authority over to the Federal Trade Commission (FTC), we are likely to see the following 2018 reactions.

States are likely to craft their own net neutrality rules, challenging the FCC's threat to preempt any state laws in conflict with their own. According to the National Association of State Legislatures, so far 22 states have introduced legislation to establish their own net neutrality rules. Some, like a bill in Washington state would directly challenge the FCC's rules. It would require ISPs to disclose accurate information regarding their network management practices and performance, and the terms of their broadband Internet access services in sufficient detail to enable consumers to make informed choices about the service. The bill would also prohibit blocking and impairing access to content or allowing “paid prioritization.  

Other states are taking a backdoor approach. For example, New York would exert financial pressure on ISPs by only allowing the state and local governments to contract with ISPs certified as meeting the state's net neutrality requirements.

Any state rules the FCC deems are in conflict with the Internet Freedom Order will be fought out in Court, with the FCC usually, but not always the victor in such battles.

Net neutrality will certainly be an issue Congress deals with this in 2018. A broadband bill has already been proposed by Marsha Blackburn, a Republican representative from Tennessee. However, her "Open Internet Preservation Act" would not prohibit paid prioritization, thus it is likely dead on arrival with Democrats.

Some in Congress are attempting to use the Congressional Review Act (CRA) to overturn net neutrality. The CRA enables Congress to reverse a federal agency’s ruling within 60 legislative days if supported by both the Senate and the House of Representatives. However, with Republicans in control of both Congressional bodies, this seems a symbolic gesture ate best.

There is no doubt the FCC's Internet Freedom Order will be challenged directly in Court by consumer advocates, likely to be joined by some states. Legal challenges will take two approaches. Some will argue that the FCC's classification decision is "arbitrary and capricious" because it was based on selective data that purported to demonstrate Title II had hurt investment while simply ignoring contrary data. Other legal attacks will argue that the FCC's comment cycle was corrupt with many "fake" comments filed while valid comments were simply ignored. Sadly, the success of such arguments is likely to rise or fall based on the political leanings of the court involved rather than the merits of the legal case.

With all the legislative and political attempts to overturn the net neutrality rules coming this year, our long-held opinion is that a new comprehensive Telecommunications Act is desperately needed. A new Act would include fair net neutrality rules without getting bogged down with meaningless classification issues. It would define acceptable broadband speeds for both fixed and mobile broadband services, fix the contribution methodology for universal service, and establish rules to incent the movement to packet services such as Ethernet without leaving current time-division multiplexed (TDM) customers stranded. It would also final establish rules for interconnection in an Internet world.

To accomplish a new Act, Congress would have to get beyond its petty squabbles, and as we enter 2018, that seems an impossible dream. Perhaps the solution is a new moderate political party, one that represents the vast majority of the American people instead of the extremes.