The fight over telecom regulation is finally getting as bitter as it was destined to become, with the two FCC Commissioners of the minority party yesterday excoriating Chairman Tom Wheeler for antidemocratic “antics,” and a prominent U.S. Senator today calling the communications industry’s bluster about consumer fees ballooning up to $15 billion “baloney.”
The communications industry pulled off a nice feat 15 years ago convincing Congress and the FCC at the time that Internet communications are not communications. The result was that broadband communications/not-communications have been subject to what the industry calls a “light touch” and which FCC Chairman Tom Wheeler calls negligible oversight.
No matter how you phrase it, broadband is largely unregulated, leaving barely any legal framework available to force broadband providers who misbehave to comply with any rules of any sort. This is the reason why it’s been so hard to make any network neutrality principles stick to any company that hasn’t agreed to them as part of a bargain for approval of a megamerger.
And all along, communications companies have been redirecting all of their services into IP pipes, so that even the ones that used to fall under Title II will end up almost completely unregulated.
Wheeler started a year ago from this position: work with the FCC to create some reasonable regulatory framework for broadband; a failure to do so would leave him little choice but to try to apply Title II to broadband.
The industry preferred a fight over Title II, a sensible tactical maneuver if it’s against any new regulation at all.
So Wheeler invoked Title II. Communications companies responded by saying they might be compelled to stop investing in their networks if Title II regulation were to be considered. They even drafted letters echoing that sentiment and gave them to their suppliers to sign. Who could refuse?
But the threats smacked of extortion – “we’ll hold the economy hostage if you do this.” Worse, investors began to question if it’s just dangerously stupid for companies whose value hinges largely on operating advanced networks to stop investing in their networks. The industry has been forced in recent weeks to walk back that argument.
As that industry threat got undermined, the industry found a new one: Title II regulation would inevitably lead to increased regulatory fees that would be passed on to consumers. Those fees could total up to as much as $15 billion.
Sen. Ron Wyden published a blog post today saying not just that that won’t happen, but that it can’t.
“I wrote the Internet Tax Freedom Act,” Wyden wrote. “So I want to set the record straight about the false claim being peddled by opponents of net neutrality. They are saying things that aren’t true to try to stop the FCC from acting to protect the free and open Internet.
“The claim: If the FCC reclassifies broadband Internet access as a “common carrier” under Title II, consumers could be stuck with new taxes by state and local governments.
“In a word: Baloney.”
The italics are Wyden’s. Wyden is a pretty mild-mannered guy. When he says “baloney,” that means he’s angry. In italics? He’s spitting mad. He concludes: “The Internet Tax Freedom Act will protect the Internet from taxes regardless of how the FCC defines Internet access.”
Meanwhile, bipartisan ugliness is escalating among Commissioners. The two GOP commissioners, Ajit Pai and Michael O’Rielly have been sniping at Wheeler and the two other Democratic appointees for months. Nearly every important decision at the FCC for more than a decade has broken down on a 3-2 partisan split.
The FCC recently fielded two related issues – one regarding cellular roaming rates, the other a petition from T-mobile on cellular data rates. Pai and O’Rielly disagreed with the outcome and demanded what was inevitably going to be a show vote they would have been destined to lose 3-2.
Losing another 3-2 vote is unremarkable, but the elevated level of vitriol in response might be.
“Bad process makes for bad policy,” the two said in a release. “And today’s antics simply underscore the need for Congress to maintain its focus on FCC process reform.
Wheeler dismissed the complaints as partisan sniping.
Filed Under: Industry regulations