FCC Says No More Cheap Internet For Schools And Libraries

FCC-new-regulations

Trump’s FCC new regulations are not going to please end consumers.

Trump doesn’t care if the consumer class ends up on the wrong side of the bargain.

Any bargain that is.

Not many people know this but Trump’s’ recent FCC vote can possibly lead to more expensive broadband connections for institutions like schools and libraries.

That obviously should lead us to the question whether Trump has done anything for the consumer class since becoming the 45th president of the United States of America?

Probably not.

The only winners in Trump’s administration so far are the giant corporations.

And not the ones that don’t plunder the earth.

We all know that President Trump is responsible for appointing Republican Ajit Pai as the Federal Communications Commission chief.

Now, Ajit is by no means a nice guy.

Why?

Because he has made it clear in no uncertain terms that he wants to do something bad.

Basically, Ajit wants to do away with US internet laws that protect net neutrality.

What Is Net Neutrality?

You probably don’t need a complete introduction to net neutrality to pass your term paper.

Not from this post anyway.

But in short, net neutrality means that all online content that is available on the internet should be accessible to all types of consumers equally.

Without any discrimination.

Very soon though, we’ll be able to witness another assault on net neutrality by the Republicans.

Even worse, this would be just one component of the overall Trump administration’s strategy.

What is that strategy exactly?

For now, the strategy seems to be to use the FCC and deregulate industries such as the broadband industry.

But Trump’s FCC doesn’t simply want to deregulate the broadband industry.

It wants to do that in a way that favors internet corporate behemoths such as Verizon and AT&T to the fullest.

Moreover, by the looks of it, it also wants to hurt the end-users, i.e consumers.

All of that is true if you believe what public interest advocates have to say.

Let’s Look At An Example

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Whose side is the FCC on? The coporations.

On April 20, 2017, the FCC successfully voted to approve a plan that can only be described as controversial.

Essentially the plan will allow the FCC to deregulate the business-to-business broadband internet market.

Currently, this market is valued around $45 billion.

Which is obviously a lot of money even by giant corporation’s standards.

Some folks like to refer to this market as the BDS market.

BDS stands for, Business Data Services.

This new and approved FCC plan will eliminate internet price caps that basically ensure that internet access for hundreds and hundreds of small businesses along with school and libraries and hospitals remains affordable.

But President Trump could care less about that at the moment it seems.

Readers should know that these price caps for affordable internet access are not new.

They are (very soon to be “were”) part of existing US laws for quite some time.

Years in fact.

As mentioned before, these internet laws are put in place for one specific reason.

That is to protect small business and other institutions (community ones more specifically) from

Vulturous behavior.

From whom you may ask?

Well, it should be obvious but, from monopoly-seeking broadband internet service providers such as Verizon and AT&T.

Ajit Pai Doesn’t Think There Is Anything Wrong With The New FCC Plan And For Good Reason.

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Local libraries will get affected by new FCC proposals.

The current Trump-appointed FCC Chairman is Ajit Pai.

You already knew that because we told you so in the beginning of this post.

What we didn’t tell you, and what you probably don’t know, is that Ajir was once a Verizon lawyer.

That makes all of this “new FCC rules and regulations” situation pretty interesting.

We’re not saying that working with Verizon had anything to do with it, but it does start to make sense as to why Ajit Pai would want to justify (completely rather) the Business Data Services rollback plan.

Ajit claims that internet price caps are something that are not necessary at all.

He says that in a market where there is sufficient amount of competition, there is no need for internet price caps.

But what is this “sufficient competition”?

In other words, we want to know what Ajit thinks should be called as “sufficient competition”?

You might find it hard to believe but according to Pai, or rather Pai’s FCC, a local Business Data Services related market has sufficient competition if it is served by a single broadband internet service provider.

And.

Has another broadband internet service provider within a radius of half a mile.

You don’t us to tell you that, this makes as little sense as you would expect it to.

After all, Ajit is President Trump’s main man.

Public Internet Advocates Do Not Agree With Ajit or Trumps’ FCC

Perhaps we should have seen this coming.

Public advocates are not at all convinced by the arguments put forward by the chairman of FCC Ajit Pai.

Mainly, the public internet advocates say that if Trump’s FCC does remove existing Business Data Services price caps, then it will be like these broadband internet service giant such as Verizon and AT&T have hit a humongous financial jackpot.

But this big financial windfall will be at the expense of the consumers.

Why?

Because consumers will have to pay higher prices for the same internet services.

More specifically though, you have to understand that there is a certain process that goes on every time you use a service like an ATM or do a transaction with a credit card.

Basically, if you use a credit card to pay for the fuel at a gas pump or use it at a grocery store, then this transaction makes use of the Business Data Services network.

If Trump’s FCC increases the price for BDS internet access then this will lead these entities to incur higher business costs.

And what happens when a business experiences higher costs?

That’s right.

These businesses will have to pass down these higher costs to the end user.

In other words, consumers will have to pay higher prices for the same services as before.

Other Voices

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Schools will feel the Business Data Services overcharge as well.

The Chief Executive Officer of the tech industry trade group INCOMPAS (which is pro-competition), Chip Pickering recently said in an official statement that the new FCC plan was basically crony capitalism that favored broadband internet service rights.

He also said that it was clearly anti-business and hurt consumers.

Ajit Pai’s Business Data Services proposal was also likely to push broadband internet prices up by a total of 25 percent for small businesses.

As indicated earlier, this increase in price will ultimately cost end-users, or consumers, perhaps billions of dollars every year.

Where will these extra dollars go exactly?

Correct.

All of these “extra” dollars will fill up the coffers of giant corporations such as Verizon and AT&T.

Mignon Clyburn, who is the Democratic FCC Commissioner, said that instead of looking out for the millions of small players, the majority had again chosen to take the side of multi-billion dollar broadband service providers and their interests.

Clyburn also was one of the people who voted against the new Trump FCC’s BDS measure.

The following Thursday, Clyburn said that communities, where competition was unlikely to ever develop, would see substantial deregulation.

In other words, the most affected areas (as a result of new FCC rules) will not be overpopulated cities.

In fact, it will be poor and rural areas.

These areas will witness the prices of broadband services go up.

And there will be little hope and/or relief.

The Poor And The Rural Will Be Affected The Most

Continuing with his statement Clyburn said that it was a sad day for the proud and hardworking small business across the country.

Of course, Clyburn was talking about schools, libraries along with police departments and hospitals in rural areas.

According to Clyburn, all consumers will be affected adversely by the new FCC rules.

Now would be a good time to ask why the new deregulation regarding Business Data Services plan is likely to trouble most public interest advocates.

The primary reason why public interest advocates don’t like the new deregulation plan is because the FCC is lying.

More like, Trump’s FCC is misleading people.

In other words, FCC’s assertions about the competitiveness of the broadband market are wrong.

The Business Data Services market is not competitive at all.

If anything, then the Business Data Services is as uncompetitive as a market can get.

Not only that, this has been the case for many many years.

And that is the reason why there is a serious need for internet price caps.

Because otherwise, the broadband internet providers who monopolize the market would jack up prices to extremely unreasonable levels.

Is This A Rip Off?

Back in the year 2016 (which was last year), when Barack Obama was still the President of the United States of America, the FCC produced a report/research that showed the lack of competition in the Business Data Services market.

The research pointed out that in fact, 73 percent of the Business Data Services location were only served by one, and only one, broadband internet provider.

Moreover, from the rest of the percentage, over 24 percent of Business Data Services locations were served by more than one, by that we mean two, broadband providers.

What does that really mean?

That means, that over 97 percent of the Business Data Services locations across the United States of America, which probably amounts to thousands of locations, face either a monopoly or at best, a duopoly when it comes to market conditions.

We’ve already mentioned before that the impact is worsened by the fact that most of the affected parties include entities such as small businesses along with schools, hospitals, libraries and other local institutions.

Does Trump’s FCC Care?

Not really.

We mean, the FCC hasn’t given any indications that it cares about local businesses getting crushed under price increases.

But under Ajit Pai, the FCC is a different beast altogether.

Trump’s FCC has shown a remarkable (and rather casual) indifference in its assertions.

What do we mean by that?

When the FCC says that there is strong competition in the business data services market and hence the organization felt that it needed to step in and ease the regulatory burdens, the FCC is straight out lying.

The “easy of regulations” is only meant to benefit giant corporations like Business Data Services broadband providers such as Verizon and AT&T.

To put it another way, public interest advocates are making some noise for nothing.

Trump’s FCC contentions are, and should be, strongly being contested for the right reasons.

 

How Bad Is The Business Data Services Market?

The current condition of competition in the Business Data Services market is really really bad.

As a result, US businesses are suffering.

Why?

Because it is them who have to pay an estimated $20 billion every year in, what the government describes as, market failure-driven overcharges.

The Consumer Federation of America has argued that Ajit Pai’s deregulation plans will cost these small businesses even more.

How much more?

About another $20 billion on top of the $20 billion Business Data Services overcharges they already have to pay.

As we have mentioned before already, there is no way that these small businesses are going to pay these additional costs by themselves.

The ultimate cost of eliminating price caps will be transferred to the end-users, i.e consumers.

According to the Consumer Federation of America, these overcharges could come to around $300 for every household, every year.

Consumer Federation of America Research Director, Mark Cooper, recently told reporters that this was a huge rip-off.

He also said that the proposal from the FCC relied on contradictory data.

Talking to reporters on a conference call, he also pointed out that the new proposals also, possibility, violated multiple sections of the Federal Communications Act.

He said, that the new proposals also went against the Administrative Procedure Act.

This Is Just Another Example Of How Trump Does Business.

Aji Pai’s Business Data Services proposal is nothing new.

There are many other examples where Trump’s FCC has put the interests of giant corporations such as Verizon and AT&T ahead of all others.

Mostly American citizens though.

Phillip Berenbroick, who is the senior policy counsel at Public Knowledge (which is a digital rights group based in DC) recently told reporters that the Business Data Services order was another in a long list of issues on which FCC Chairman Ajit Paid had chosen to side with the biggest telecom companies who possessed market power instead of the public interest and consumers.

He ended his comment by saying that the common theme of FCC Chairman Ajit Pai’s short tenure as the head of Federal Communications Commission is that the FCC would stand up for the biggest companies that are regulated by the federal agency rather than the average consumers.

 

Zohair

Zohair

Zohair is currently a content crafter at Security Gladiators and has been involved in the technology industry for more than a decade. He is an engineer by training and, naturally, likes to help people solve their tech related problems. When he is not writing, he can usually be found practicing his free-kicks in the ground beside his house.
Zohair

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FCC Says No More Cheap Internet For Schools And Libraries

by Zohair time to read: 9 min
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