FCC Boss Now Making The Case For Reclassification, Rather Than Against It

from the well,-duh dept

It's been all but confirmed for the past couple of months that Tom Wheeler was going to put forth new FCC net neutrality rules that include reclassifying broadband under Title II. While he had been moving forward with his split the baby hybrid approach, President Obama's surprising clear support for Title II shifted the debate. At this point, nearly everyone expects the plans, to be released soon and voted on at the end of February, to include reclassification with forbearance. Yesterday at CES, Wheeler was interviewed by CEA boss Gary Shapiro, and while he didn't come out and directly say it, it was quite clear that he's going for Title II reclassification. You can see the 48-minute video if you want to catch the whole thing.

In it, Wheeler makes two key points that he (and others) have avoided making over the past year. First, a "commercially reasonable" approach doesn't actually do much for the public. As we discussed all the way back in April, the "commercially reasonable" standard is a recipe for disaster, allowing for broadband companies to put in place nasty anti-consumer practices, focusing on adding tollbooths and limiting online services. For the first time, Wheeler was pretty explicit about the problems of this standard, that he had supported earlier:

It became obvious that commercially reasonable could be interpreted as what is reasonable for the ISPs, not what is reasonable for consumers or innovators. And that's the wrong question and the wrong answer because the issue here is how do we make sure that consumers and innovators have open access to networks. That led us to a more robust investigation of the well established concept of just and reasonable, which is a Title II concept. And as I said, Title II has always been something that was on the table. So last summer we began investigating various approaches using title II as a way to get to just and reasonable because it has the best protections.

The second key point that Wheeler made, which he hadn't been making in the past (and had actually argued almost the opposite), was that there's no real evidence that Title II kills innovation. During meetings with tech companies in the past, Wheeler had said that he was worried about Title II hurting broadband investment, but it appears that he's finally realized this isn't true.

The key here (again, as we've pointed out in the past) is that Wheeler realized that mobile phone service has always been regulated under Title II and there continues to be tremendous investment in that space. In fact, Wheeler notes that the recent spectrum auction activity pretty clearly proved the point that Title II doesn't scare off investment:

After the president said what he said about Title II, we still had a record bidding for spectrum from ISPs...

Oh, and also, he pointed out that the mobile phone space has appropriate forbearance, ripping to shreds the argument that forbearance is impossible and that Title II will lead to tariffs and other burdensome regulations. As he noted, he was actually the lobbyist on the mobile side that negotiated such a deal, so he knows it works:

“It just so happens that 20 years ago I was the guy that negotiated on behalf of the wireless industry to establish Section 332," Wheeler said.

“Section 332 says that wireless should be regulated under Title II as a common carrier, except that the FCC is instructed to forbear from onerous provisions and inappropriate provisions of Title II, except for section 201 and 202, which is just and reasonable, and Section 208, which is consumer protection," he added.

[....] ”So I say to myself, 'ok there is a way to do Title II right, and sure there are many ways to do Title II that would thwart investment, but there are other ways to do Title II,'” Wheeler told Shapiro on stage. “We ought to take a look at how that fits together with consumer protection.”

Wheeler urged listeners to look at the wireless industry under Title II to see how the FCC might enforce it. “There is no need to file tariffs, there is no need to file all these informational activities,” Wheeler said. “The problem we had at that time [in the 90’s] was the wireless industry was having to go before state commissions to change rates.” Having the FCC approve all rate changes, Wheeler seemed to imply, is not what he wants.

These are all points that people have raised before... but which have been mostly ignored in statements by Wheeler until now. In fact, for those who immediately condemned Wheeler's past as an industry lobbyist, he seems to have effectively flipped the script. He's now using that past and his experiences to show that he knows damn well that the FCC can do Title II with appropriate forbearance in a way that works fine for the industry, because he was the one who negotiated it that way for the mobile industry years ago.

Again, there's nothing too surprising in the effective acknowledgement that Wheeler is finally aboard the Title II bandwagon, but what's good to see is not just his support for Title II, but the fact that he's demolishing the ridiculous and misleading complaints the big broadband players have been making against Title II and for the old Section 706 approach. That is, it doesn't look like Wheeler is cautiously stepping into Title II, but rather that he's fully onboard and is ready to defend the argument in a way that sticks.

Big broadband is going to howl and protest, but the reality is that their arguments never made much sense in the first place -- and now Tom Wheeler is making that clear as well.

Filed Under: fcc, net neutrality, open internet, reclassification, spectrum, title ii, tom wheeler, wireless

Commerce Department Study Reveals There's Almost No Competition If You Want Real Broadband

from the what-broadband-problem? dept

Just recently, the U.S. Commerce Department's Economics and Statistics Administration (ESA) released yet another study for defenders of the broadband industry status quo to ignore. The study specifically took a look at the competitive options available at higher speeds, and found that -- surprise surprise -- they simply don't exist for most users. FCC boss Tom Wheeler has recently been making the rounds trying to sell the idea that our minimum broadband definition needs to be higher than 4 Mbps, in the process pointing out that three quarters of the country doesn't have the choice of more than 1 ISP when it comes to speeds of 25 Mbps or higher.

The ESA study confirms this and then some. When it comes to speeds of just 3 Mbps, the study notes that 98% of the public has the choice of two providers. Of course 3 Mbps is barely enough for decent HD streaming, much less a household of hungry bandwidth users, and the choice of just two providers means both are going to be expensive. It's fairly similar at speeds of 10 Mbps, where most people at least have the choice of two ISPs -- an apathetic cable operator, engaging in "wink wink nod nod" competition with a phone company. Move past 10 Mbps, and competitive options get worse -- quickly:

"For example, only 37 percent of the population had a choice of two or more providers at speeds of 25 Mbps or greater; only 9 percent had three or more choices. Moreover, four out of ten Americans did not live where very-high-speed broadband service – 100 Mbps or greater – is available. Of those with access to broadband at this speed level, only 8 percent had access to two or more providers; 1 percent had access to three or more. Only 3 percent of the population had 1 Gbps or greater available; none had two or more ISPs at that speed."

So for all the hype surrounding 1 Gbps speeds this year, it's important to remember that only 3% of the population can get it. That's a lot of fiber to the press release. The ESA offers a handy graphical breakdown of the dearth of options in most markets:It's worth noting that while the ESA makes it clear from the outset that the lack of competition impacts pricing, the word "price" is mentioned just twice in the study. For years ISPs have worked very hard to ensure that specific pricing data never reaches the eyes of the public. The defense is always that ISPs don't want to give competitors access to pricing data, though any ISP worth its salt already knows exactly what its competitors charge -- and where. There's really one reason efforts like our $300 million broadband coverage map don't include pricing data: it makes it easier for the industry's proud defenders of the status quo to continue pretending there isn't a problem.

Filed Under: broadband, competition, fcc, net neutrality, tom wheeler