Pai Engages Silicon Valley As Net Neutrality Fight Brews

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By Kyle Daly and Michaela Ross

Federal Communications Commission Chairman Ajit Pai huddled with Facebook Inc. and Oracle Corp. executives in Silicon Valley to discuss the agency’s net neutrality rules, as the tech sector gears up to fight his planned changes.

Pai told reporters April 20 he met with executives from the two companies and others, including Cisco Systems Inc. and Intel Corp, on April 17, but declined to discuss specifics.

The coming storm over the rules promises to pit the tech giants against communications titans, including AT&T Inc. and Comcast Corp. The fight is likely to be the biggest test yet of whether the tech sector’s clout in Washington has diminished since President Donald Trump took office.

The current rules bar internet service providers from blocking or throttling traffic flowing across their networks in most circumstances. Pai said he sought ideas from the tech companies on “how to secure some of those principles of free and open internet that I think most people agree on.”

Pai has met with broadband trade groups and other stakeholders to discuss his plan to shift net neutrality enforcement powers to the Federal Trade Commission, according to people familiar with those discussions. Pai also wants to end the FCC’s classification of broadband as a common-carrier service under communications law, those sources said.

The FCC chairman is expected to unveil his proposal to change the net neutrality rules as early as April 27. That may open the floodgates for public interest groups and Silicon Valley to publicly mobilize against him. It’s not clear if the opposition will sway Pai. But mass resistance to his intended approach could factor into a legal challenge to any rules Pai produces. It also could influence congressional Republican plans to codify Pai’s net neutrality policy with legislation.

Brewing Fight

Tech trade groups and startup advocates have been quietly gearing up for months in anticipation of an FCC attempt to roll back the current rules. The groups say the rules help ensure online competition and a better user experience.

Several startup advocacy organizations, including Engine and Y Combinator, an accelerator that has helped to launch tech giants such as Dropbox Inc. and Airbnb Inc., say current FCC rules protect the ability of smaller internet companies to compete with larger players on a level playing field. The groups are collecting signatures of investors, entrepreneurs and incubators for a letter slated to be sent to Pai by May 1.

The letter attracted over 700 signatories from every state as of April 20, according to Evan Engstrom, executive director at Engine. Engstrom said there’s more at stake for smaller companies.

“The people that have the most to lose from a world without net neutrality are startups,” Engstrom told Bloomberg BNA.

The Internet Association, a leading internet industry trade group that represents Alphabet Inc.’s Google and Facebook, met with Pai April 11 to reiterate its stance that the FCC should keep its current rules.

Pai got a taste of opposition efforts early in the agency’s April 20 open meeting. A group of activists led by policy group Free Press stood and serenaded him with a net neutrality-themed parody of recording artist Rick Astley’s “Never Gonna Give You Up” to plead with Pai not to change the rules. Pai sang and danced along as the activists were escorted out of the meeting room.

To contact the reporters on this story: Kyle Daly in Washington at kdaly@bna.com; Michaela Ross in Washington at mross@bna.com

To contact the editor responsible for this story: Keith Perine at kperine@bna.com

For More Information

The startup groups' draft letter to Pai is available at: http://src.bna.com/n8B

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