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November 26, 2017

Deregulation: Not Always a Good Thing

By Mark Hite
President, Greater Chattanooga REALTORS®

While deregulation may sound appealing with hopes of spurring economic growth, one item that is on the way to passing may spell the end of your local Mom and Pop real estate office.

This past week, U.S. Federal Communications Commission Chairman Ajit Pai (Senator from Kansas) released a plan to repeal so-called “Net Neutrality” regulations, which may sound like gibberish to you, but is a scary prospect for  small real estate offices locally and across the country.  Pai’s plan would dismantle the two-year-old Open Internet Order, which prohibits internet providers from blocking or slowing down websites, or charging higher fees for certain websites online and bundling services,

“Today, we propose to repeal utility-style regulation of the Internet,” said Pai, an Obama appointee to the FCC, elevated by Trump into Chairman of the agency, who voted against the Open Internet Order in 2015.  The repeal,  which is likely to be approved in December, would negate a ruling declaring broadband internet as an essential utility.  What this means is that  companies that provide internet, such as Comcast or Charter also known as “common carriers” under “Title II” of the Communications Act of 1934,  much like phone service and electricity,  must be “just and reasonable,” when charging consumers.

If this passes and internet providers were suddenly exempted from this provision as Pai proposes, they could technically begin charging internet users more to access certain websites such as Netflix, Google, or, more likely, smaller websites that don’t see as high demand  such as a local real estate  brokerage website.  Providers could also “throttle” consumer access to certain websites outside their bundles, making them load more slowly than other privileged websites.

While rapidly approaching reality, this is not a new agenda item in Washington.  The National Association of Realtors sent a letter to the FCC in July urging Pai to reconsider his motion to repeal the Open Internet Order.  Again, this past week NAR reaffirmed its opposition, accusing the agency of stacking the deck against smaller companies in favor of corporations

NAR President Elizabeth Mendenhall said in a statement,“Technology is an increasingly important part of the way our membership delivers its services, whether through streaming video, drone technology, or other applications. We remain concerned that a rollback of net-neutrality rules could lead to blocking, throttling, or discriminating against Internet traffic, or even ‘paid prioritization’ arrangements that put small mom-and-pop businesses at a disadvantage in the marketplace. We will continue working with the FCC to share these concerns and ensure a fair and open internet where everyone can succeed."

The proposal, which would shift power from the FCC to large companies like AT&T and Comcast, is expected to pass on December 14, when the agency’s commission meets next.  The commission, comprised of three Republicans and two Democrats, is expected to vote largely along party lines with the Republicans supporting Pai’s plans. 

As you contemplate the far-reaching results, beyond local real estate brokers, you may wish to join the National Association of REALTORS® and express your concerns about this change to your US Senators.   However, do not delay, as this is expected to pass before year end.

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