FCC Should Use Authority Over Net Only in Market Failures, Says Wheeler as He Backs Net Neutrality Order
In his first major policy address as FCC chairman, Tom Wheeler said it’s important to stay out of competitive markets where they exist, while backing exercising a strong regulatory hand where needed -- including on the Internet. “If the facts and data determine that a market is competitive, the need for FCC intervention decreases,” he said Monday at his alma mater, Ohio State University. “I have zero interest in imposing new regulations on a competitive market just because we can.” The speech (http://fcc.us/1cOJRlT) was webcast.
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The FCC still has a major role as technology progresses, Wheeler said. As the U.S. communications infrastructure evolves from the monopoly phone network of the 20th century to more efficient digital networks, “government oversight” should evolve with it, he said. Wheeler dismissed those who “suggest that new technology should essentially free the new networks from regulation.” Market forces aren’t enough to ensure the public interest will be served, he said.
The Internet is well within the FCC’s purview, Wheeler said, citing the agency’s congressionally granted authority over interstate and foreign wire and radio communications. “The Internet is not a law-free zone,” Wheeler said. “It depends upon standards of conduct. And it depends upon the ability of the government to intervene in the event of aggravated circumstances."
Wheeler supports FCC net neutrality rules, he said. “We stand for the open Internet,” he said in Q-and-A after the speech. “You can’t have access unless you have the ability to access any lawful network.” Wheeler is “hopeful that the court will affirm the fact that reasonable rules that require the carrier to make sure they provide access” should be lawful, he said of the challenge in the U.S. Court of Appeals for the D.C. Circuit.
Wheeler expects “variations” among ISPs in pricing and service as they experiment with data caps, he said. He expects a “two-sided market” in which Netflix might be able to pay Internet providers so a customer can receive “the best possible transmission of this movie,” he said. The FCC should “observe what happens” there, and “make decisions accordingly,” said Wheeler. The decisions ought to be made in the market, he said.
Wheeler isn’t proposing to “regulate the Internet,” he said in the speech. That idea is a “nonstarter,” he said. U.S. policy “strongly favors Internet freedom.” The U.S. government’s specific policy goals online are ensuring 911 calls be complete and enforcing a ban on child pornography, said Wheeler. The FCC’s overarching purpose should be ensuring the Internet’s continued openness, he said. “Assuring that the Internet exists ... as a collection of open, interconnected entities is an appropriate activity for the people’s representatives."
Companies have control over their “regulatory fates,” Wheeler said. It’s “based on the degree to which they embrace competition in their markets.” When competition is high, “regulation can be low,” Wheeler said, calling it the “seesaw” rule. When competition doesn’t produce “adequate outcomes” -- such as in the face of “significant, persisting market power” or “significant negative externalities” -- defending the public interest compels the agency to act, Wheeler said. It often leads to “good things,” he said. “It’s because of the FCC that you have multiple competitive choices for your mobile phone service."
Wheeler laid out what he called a “network compact,” in which the FCC would work to ensure accessibility, interconnection, and public safety and security. Accessibility includes “the ability of users to access all lawful content on a network,” Wheeler said. “That’s why the FCC adopted enforceable rules to preserve the open Internet.” The agency also has a role in ensuring interconnection on the Internet, Wheeler said. “Assuring the Internet exists as a collection of open, interconnected facilities is a highly appropriate subject.”
"What the Internet does is not an area that is appropriate for federal regulation ... with a few notable exceptions,” Wheeler said in the Q-and-A. Other than ensuring 911 calls go through and child pornography is stopped, “considering what else the Internet delivers and what else the Internet does should be off limits to the government. Assuring that the Internet exists is where I believe we, however, have a responsibility,” Wheeler said. “The Internet isn’t a thing, it’s a collection. And if you can’t have that collection, if you can’t have the connections among the various networks that make up the Internet, then you don’t have an Internet."
On his decision to push to reevaluate mobile phone rules on planes, Wheeler said the FCC is just proposing the collection of public comments on the agency’s rule preventing cellphones from being used while in air. Technology may have made that rule obsolete, he said. “Our rule, if it no longer applies, should no longer exist.” Wheeler said he doesn’t want the guy next to him on a plane “yapping” the entire flight, but that’s a policy for the airlines to consider.