Potential Impacts on Telehealth From Net Neutrality Repeal

Antitrust Law

On December 14, 2017, the Federal Communications Commission (FCC) passed the Restoring Internet Freedom Order (RIFO), repealing the FCC’s 2015 “net neutrality” rules and shifting the responsibility for regulating the conduct of Internet service providers (ISPs) to the Federal Trade Commission (FTC) under the antitrust and consumer protection laws. While RIFO’s impact on video streaming seems to be at the top of most consumers’ minds, telehealth experts are concerned that the decision could raise the costs of providing telehealth services, hindering the development of such services.

The New Regulatory Structure Under RIFO

Under net neutrality, ISPs were prohibited from throttling speeds or blocking or slowing down specific Internet content. RIFO replaces a regime based on rules with one based on potential enforcement. RIFO specifically states that “antitrust law and the FTC’s authority under Section 5 of the FTC Act to prohibit unfair and deceptive practices” will protect against potential consumer and competitor harm.

Rather than prohibit ISPs from discriminating against certain content, RIFO contains transparency measures to ensure that ISPs disclose information about their practices relating to issues like blocking websites, throttling delivery speeds, prioritizing delivery and managing congestion to consumers, entrepreneurs and the FCC. Accordingly, the onus will be on the FTC and other enforcers to police the ISPs and ensure that they are delivering what they promise. The remedies will likely follow traditional FTC consumer protection remedies for deceptive statements. For example, it would be deceptive if an ISP states that it does not throttle when in fact it does, and an unfair act could include a unilateral change in a material term of a contract. State attorneys general are also expected to be active in enforcement efforts.

In addition, RIFO opens the door to antitrust enforcement. The FTC and the Department of Justice’s Antitrust Division have the power to prosecute ISPs under the Sherman Act for conduct that damages competition in markets for provision of content to consumers. For example, if an ISP has market power in ISP markets and restricts its customers’ access to the content of a multichannel video distributor or online video distributor with which the ISP competes (such as could be the case with large, vertically integrated ISPs), it will likely face investigation and enforcement action under the antitrust laws. The FTC also could challenge such conduct as an “unfair method of competition” under Section 5 of the FTC Act.

The FCC, however, has not been completely eliminated from regulating the ISP market. According to the Memorandum of Understanding (MOU) between the FTC and FCC, the FCC will still monitor the broadband market, identify market entry barriers, review informal consumer complaints, and investigate and take enforcement action against ISPs that fail to comply with RIFO’s requirements to file with the FCC or display on a publicly available, easily accessible website the specified subjects of disclosure. The MOU also provides that the agencies will continue to coordinate and discuss consumer and industry outreach and educational efforts, potential investigations, and enforcement actions under each agency’s jurisdiction to prevent duplicative or conflicting actions.

Potential Implications for Telehealth

FCC Chairman Ajit Pai was in favor of abolishing net neutrality, believing it would increase Internet innovation and flexibility that would allow for prioritization of content important to consumers, such as telehealth. According to an FCC spokesperson, for “Internet-enabled healthcare apps and services, paid prioritization could be the difference between life and death for patients who require very reliable and fast connectivity for health monitoring, consultation, and service delivery” and RIFO will “unleash innovation and investment in networks, providing better connectivity for rural and underserved hospitals and reducing costs everywhere.”

But such claims assume that telehealth providers will be in a position to pay for priority. Telehealth and healthcare experts and advocates are concerned that the end of net neutrality could lead to prohibitively high Internet costs. Providers require connectivity to practice telehealth and rely on the Internet for data storage to support the use of government-mandated electronic medical records. Telemedicine has been praised as a solution for patients in rural areas where healthcare access is limited. Net neutrality has ensured that telehealth services are not deprioritized in favor of deep-pocketed alternatives. RIFO may lead to higher rates for the bandwidth required to deliver these services.

While larger providers may be able to budget for Internet prioritization costs or pass them on to patients, increased costs may discourage federally qualified health centers and rural health centers from providing these services and could force them to reduce or eliminate them. Even if hospitals are not priced out, patients in rural and underserved areas may find higher connectivity prices cost-prohibitive. Either way, the reduction of telehealth services may further exacerbate health disparities between high- and low-income patients, particularly in rural areas.

Conclusion

It remains to be seen exactly how the end of net neutrality and the new regulatory structure will play out and impact telehealth. Only days after the FCC abolished net neutrality, a federal bill was proposed to restore net neutrality’s bans on the blocking and slowing of websites. Similarly, Democratic senators are rallying to secure the votes necessary to pass a resolution to revive net neutrality. Critics, however, are skeptical that this effort will be successful due to lack of votes in the House and President Trump’s veto power.

Some states also are working to revive net neutrality by introducing bills to forbid Internet providers from blocking or slowing down sites or online services. To date, six states have introduced bills and at least two others are considering them. The states, however, face an uphill battle, and state laws could be subject to court challenges because the FCC’s order blocks states from creating their own net neutrality laws. According to the FCC, differing state laws would be too difficult for an ISP to follow because the Internet does not recognize state borders. The states counter that they have an obligation to protect consumers and that the FCC lacks the authority to pre-empt all states. Both state attorneys general and private parties are also expected to sue the FCC. For now, it is important to keep apprised of the developments and their potential impact on telehealth.

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