FCC Chairman Tom Wheeler.FCC
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In his final speech before leaving the Federal Communications Commission, Chairman Tom Wheeler today made the case for why net neutrality rules are working and said that Republican commissioners won’t necessarily have an easy time overturning the rules.
“Contrary to what you might have heard, reversing the Open Internet rules is not a slam dunk,” Wheeler said at the Aspen Institute in Washington, DC. “The effort to undo an open Internet will face the high hurdle, imposed by the Administrative Procedure Act, of a fact-based showing that so much has changed in just two short years that a reversal is justified.”
The speech’s full text is available here.
A federal appeals court last year upheld the FCC order that imposed net neutrality rules and reclassified broadband providers as common carriers under Title II of the Communications Act. Wheeler called the court decision “a strong and resounding affirmation of the FCC’s authority as well as the soundness of its decision based on the record.
If there is a reversal of the Open Internet rule, it will have a high hurdle to vault to prove to the same court why its 2016 decision was wrong.”
Wheeler will leave the FCC one week from today when President-elect Donald Trump takes office, and the FCC will shift from Democratic to Republican control. Wheeler discussed the importance of open networks and limits on the “gatekeeper” power that can be exercised by broadband providers, but he said that “all the press reports seem to indicate that the new Commission will choose an ideologically-based course.”
Wheeler acknowledged that Congress would have an easier time undoing the FCC’s net neutrality rules, since it “does not bear the burden administrative procedure imposes to justify its decision.” But he argued that the rules are working well and that Congress should leave them in place instead of getting rid of them or replacing them with a weaker alternative.
“Tampering with the rules means taking away protections consumers and the online world enjoy today,” he said. “What some describe as ‘free market economics’ cannot mean simply freeing incumbents of their responsibilities.
A hands-off approach to network oversight is more than a shift in direction, it is a decision to remove rights and move backward.”
FCC Republicans Ajit Pai and Michael O’Rielly have vowed to gut net neutrality rules “as soon as possible.”
Interconnection disputes a thing of the past
The net neutrality order prohibits Internet service providers from blocking or throttling lawful Internet traffic or giving priority to Web services in exchange for payment.
But there’s more to the Open Internet Order than just that, Wheeler noted.
The FCC’s order also set up a complaint process to oversee interconnection payments in which network operators or content providers pay ISPs for direct connections to consumer broadband networks.
These payments aren’t against the rules, but the FCC retains authority to prevent “unreasonable” or “unjust” payment demands.
Most famously, Netflix for a time refused to pay ISPs for interconnection, and customers were punished with poor video quality. While Netflix settled its disputes with ISPs before the rules were finalized, the rules helped put an end to other disputes that could have impacted Internet service quality.
Wheeler today said:
When AT&T—in its role as an edge video provider—is assured access to the broadband networks of Comcast and Charter for its competitive cable-like DirecTV Now service, it is proof that the Open Internet rule is working. One only has to remember the interconnection and porting debates that hindered the access of over-the-top (OTT) video providers pre-Open Internet-rule to appreciate the importance of an open Internet to everyone—even its opponents.
What is most interesting about this example is that the porting and interconnection problems that existed pre-rule have been eliminated without heavy-handed regulation.
The mere fact that the FCC declared interconnection a Title II activity under the rules—but chose not to regulate—has produced an upswing in interconnection agreements and a downturn in interconnection pricing.
This is a significant development because it shows how the Open Internet order is successful simply by being watchful.
There has been no ex ante rate regulation.
The simple fact that the FCC was the referee on the field ready to act if necessary has meant the game has been played fairly.
The Open Internet Order’s so-called “general conduct rule” is also important for preventing anti-consumer and anti-competitive practices by ISPs, Wheeler said.
Instead of banning specific activity, the general conduct rule lets the FCC decide whether new conduct by ISPs should be allowed. “Passing legislation or adopting regulations without these key provisions and calling it net neutrality would be false advertising,” Wheeler said. Limiting the definition of net neutrality to include only rules against blocking, throttling, and paid prioritization would not “comprehensively protect against the power of broadband gatekeepers,” he said.
The rules have not harmed network investment, Wheeler argued.
“Yesterday, the CEO of AT&T reportedly told the President-elect that his company had been the country’s leading investor of capital for each of the last five years,” Wheeler said. “This, of course, includes the two years since adoption of the Open Internet rules.
A recent report pegged overall network investment at $76 billion for 2015, which is an increase from the year I arrived at the Commission.”
That report, by the USTelecom industry lobby group, said that the $76 billion investment level in 2015 was $1 billion lower than in 2014 but $1 billion higher than the $75 billion investment in 2013 when Wheeler became FCC chair.
ISP revenues and stock prices are “at record levels,” Wheeler said. “So, where’s the fire? Other than the desires of a few ISPs to be free of meaningful oversight, why the sudden rush to undo something that is demonstrably working?”
Wheeler surprised many people by pushing through stricter regulations than previous FCC chairmen, given that Wheeler was formerly a lobbyist for the cable and cell phone industries.
Being FCC chairman was “the greatest professional honor of my life,” Wheeler said.
“It is time to keep moving forward,” he also said. “This is not the time to retreat and take things away. Vigilance to protect that which Americans now enjoy must be our watchword.”