FCC Chairman Tom Wheeler today said explicitly what the FCC has been rumored to be intending for months: the FCC will propose reclassifying broadband under Title II of the 1934 Communications Act.
The FCC intends to vote on the plan during its public meeting on February 26.
He plans to raise network neutrality principles from general tenets to explicit rules.
“These enforceable, bright-line rules will ban paid prioritization, and the blocking and throttling of lawful content and services,” Wheeler said in a statement.
Furthermore, the rules will explicitly include mobile broadband for the first time, he said.
The industry is steadfast against any regulation. Service providers threatened that investment in networks would dry up, or that innovation would cease, or both. They claimed that the FCC would start regulating prices. They claimed that old laws shouldn’t apply because they’re old.
They have been repeating themselves over as if repetition would make it so. They conscripted their vendors to echo them.
Service providers failed to provide any explanation of why investment would cease, or why innovation would lag.
AT&T CEO Randall Stephenson made diminishing network investment sound less like function of economics than a retaliatory option when, during his third quarter call with analysts, he threatened AT&T would stop investing in its networks if the FCC tried to reclassify broadband. During his fourth quarter call, he pulled back from the implicit threat, saying instead that if broadband were reclassified, AT&T would have to re-evaluate its investment strategy.
Wheeler addressed the concern directly. Title II reclassification, he wrote, “can be accomplished while encouraging investment in broadband networks. To preserve incentives for broadband operators to invest in their networks, my proposal will modernize Title II, tailoring it for the 21st century, in order to provide returns necessary to construct competitive networks.”
Senator Ron Wyden swept away the notion that the FCC would have the power to regulate broadband rates by saying that the Internet Commerce Act (which he co-authored) expressly forbids anyone (including the FCC) from doing so.
Nonetheless, Wheeler provided explicit assurance the FCC would not exercise any power over pricing: “…there will be no rate regulation, no tariffs, no last-mile unbundling. Over the last 21 years, the wireless industry has invested almost $300 billion under similar rules, proving that modernized Title II regulation can encourage investment and competition.”
Nor have any service providers offered a compelling rationale for why reclassification would stifle innovation.
Wheeler reminded the industry that the opposite – that innovation would be encouraged – was more likely. “The internet wouldn’t have emerged as it did, for instance, if the FCC hadn’t mandated open access for network equipment in the late 1960s,” he wrote. “Before then, AT&T prohibited anyone from attaching non-AT&T equipment to the network. The modems that enabled the internet were usable only because the FCC required the network to be open.”
Innovation is the result of open networks, he explained, network neutrality rules keep the Internet open, and the only way to assure the Internet remains open is to give the FCC the authority to keep it so, he argued. “The phone network’s openness did not happen by accident, but by FCC rule,” he reminded.
Small cable operators insist they are in no position to flout network neutrality principles, and that reclassification could be a regulatory burden, unless the FCC took pains to ensure reclassification was not a burden.
Wheeler also explained why he opted to pursue this course rather than assert the FCC’s authority over broadband under the “commercial reasonableness” clause of Section 706 of the Telecommunications Act of 1996 – an approach the industry preferred over Title II reclassification.
“While a recent court decision seemed to draw a roadmap for using this approach, I became concerned that this relatively new concept might, down the road, be interpreted to mean what is reasonable for commercial interests, not consumers,” he wrote.
His ability to frame regulation as a consumer issue was strengthened by passionate endorsement from consumers, including an impressive barrage of commentary in favor of reclassification spurred by late night talk show host John Oliver.
“The internet must be fast, fair and open,” Wheeler concluded. “That is the message I’ve heard from consumers and innovators across this nation. That is the principle that has enabled the internet to become an unprecedented platform for innovation and human expression. And that is the lesson I learned heading a tech startup at the dawn of the internet age. The proposal I present to the commission will ensure the internet remains open, now and in the future, for all Americans.”
Filed Under: Industry regulations