Pai, O'Rielly Offer Small ISPs Reassurance After Transparency Exemption Disappears

Commissioners Ajit Pai and Mike O’Rielly assured smaller ISPs Monday the FCC won't clamp down on companies not in compliance with enhanced transparency requirements under the 2015 net neutrality order. The two are expected to hold a 2-1 majority at the agency starting Jan. 20 with the inauguration of President-elect Donald Trump. Pai and O’Rielly noted they favor an expanded exemption beyond ISPs with 100,000 or fewer subscribers.

Last week, in a double whammy for small ISPs, the FCC let the small ISP exemption lapse Thursday, and the commission said Friday the Office of Management and Budget approved the enhanced disclosure requirements to start Jan. 17 (see 1612160059). The FCC Republicans said in a letter to the heads of the American Cable Association, Competitive Carriers Association, CTIA, NTCA and the Wireless ISP Association that their members have nothing to fear. In a statement last week, Pai and O’Rielly suggested Chairman Tom Wheeler was partly responsible for the commissioners’ inability to reach an agreement on extending the exemption.

“We want to assure you and your members that we would not support any adverse actions against small business providers for supposed non-compliance,” Pai and O’Rielly wrote. They said they'll “seek to revisit” the requirements and the net neutrality order “more broadly, as soon as possible.” FCC Republicans are expected to consider major changes to the net neutrality rules after they take over in January, though making changes could be a slow process (see 1611090034). An agency spokesman wouldn't comment.

CCA President Steve Berry welcomed the letter, but said his members still face risks. “Unfortunately, despite this welcome and laudable commitment from Commissioners Pai and O’Rielly, small providers will still be vulnerable to enforcement actions between January 17th and when the new administration takes over,” Berry said in a news release. “I hope the full FCC will take Commissioner Pai and O’Rielly’s lead and extend relief to small providers, consistent with bipartisan, bicameral legislative efforts.”

“Apparently, Chairman Wheeler was the holdup to reaching a negotiated agreement on a compromise figure for the extension, and, if so, this is unfortunate,” said Randolph May, president of the Free State Foundation. “As Commissioners Pai and O’Rielly indicated today, there will be relief from the transparency requirement for small ISPs, and, importantly, broader regulatory relief is on the way. In light of the commission’s overzealous regulatory actions of the last several years, this is positive.”

“It looks as though Ajit and Mike are taking the initiative to remove uncertainty from this delicate period of transition,” said Robert McDowell, former commissioner now at Cooley. “With the lapse of the small business exemption, the status quo suddenly changed. Their letter cures that as an interim measure and gives the marketplace some certainty, at least until new rulemakings begin.”

“We don’t think of transparently disclosing terms of service to customers as a whammy for ISPs, whatever may come of the Republican commissioners’ threats,” said Matt Wood, Free Press policy director.