In an address to the Mobile World Congress in Barcelona, Federal Communications Commission (FCC) Chairman Ajit Pai said he was in favor of "free stuff" on the internet and that the agency's 2015 net neutrality ruling was a mistake. Pai said the FCC's 2015 move injected uncertainty into broadband markets. "And uncertainty is the enemy of growth," he said.
This is not the first time that Pai has come out against net neutrality. He has previously said that the 2015 ruling was a "solution to a problem that doesn't exist." The ruling classified broadband as a utility and subjected it to utility-style regulations. Major network providers, such as AT&T Inc. (T), protested the ruling and sued the agency, claiming that it would hamper fresh investment in the industry. According to USTelecom's annual broadband investment research growth report, capital expenditures by network providers declined by nearly $1 billion in 2015, the year that the ruling was passed. However, an earnings analysis of major network providers by the Consumerist website found that they had increased their spending on capital expenditures to upgrade networks. (See also: Trump Appoints Net Neutrality Critic as FCC Head.)
Under Pai's chairmanship, network carriers can expect minimal interference from the agency in their plans. "We are dedicated to a light touch, and we are on track to returning to that successful approach that prevailed (before the 2015 ruling)," said Pai. He referred to the ending of zero rating, or the option for carriers to introduce unlimited data in their carrier plans, as an example of that touch. "But the truth is consumers like getting something for free," he said. "Our new approach respects that preference." According to Pai, the end of zero rating has led to the introduction of new plans and competition between leading carriers, such as AT&T and Verizon Communications Inc. (VZ). (See also: FCC Ends Probe Into AT&T, Verizon Free Data Offers.)
However, tech publication The Verge points out that the plans do not use zero rating. "These companies are competing to offer highly competitive unlimited data plans because the last FCC chairman kept them in a competitive environment, leaving four nationwide wireless providers and a clear set of rules for them to follow," the publication writes.
Pai's "light touch" may also lead to the introduction of tiered systems for traffic on the internet. These systems allow network providers to offer premium speeds to customers who pay more. Such a move could affect traffic speeds for video streaming services like Netflix, Inc. (NFLX) because they are dependent on broadband services for transmission. While it has had fights with Comcast Corporation (CMCSA) over net neutrality in the past, Netflix seems to have softened its stance in recent times. The streaming service said it has no objections to the merger between AT&T and Time Warner Inc. (TWX). (See also: AT&T to Lawmakers: TWX Deal Won't Hurt Competition.)