Sponsored Data Plans OK for Now, but FCC Watching Carefully, Wheeler Says
FCC Chairman Tom Wheeler isn’t afraid to intervene if sponsored data plans like AT&T’s end up hurting consumers, he told a packed house at the Computer History Museum Thursday in Mountain View, Calif. It’s the second time in two days Wheeler has indicated his willingness to step in if needed. (See separate story below in this issue). AT&T said Monday it would let content companies pay for their data to not count against a user’s data cap (CD Jan 7 p2).
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Unlike in the wireline context, the FCC net neutrality rules “did not discourage this type of two-sided market for mobile uses,” Wheeler said. That was based in part on the premise that consumers have more choices for wireless Internet services than for fixed, he said. At the same time, the commission made clear that it would monitor these types of developments carefully, he said.
For now, Wheeler is endorsing that wait-and-see approach. “It may well be that the kind of offering AT&T has announced enables increased competition and increased efficiency -- both things that benefit consumers,” he said. “It is not the sort of thing that should be prohibited out of hand. But, again, history instructs us that not all new proposals have been benign. There has to be some ability on the part of government to oversee, to assess, and, if warranted, to intervene."
The FCC should intervene only if there is “an unmistakable warrant for it,” Wheeler said. “I am not interested in protecting competitors from competition, nor am I interested in presiding over a festival of rent-seeking. But I am committed to maintaining our networks as conduits for commerce large and small, as factors of production for innovative services and products, and for channels of all of the forms of speech protected by the First Amendment."
"AT&T’s sponsored data service is aimed solely at benefiting our customers,” said Senior Executive Vice President Jim Cicconi in a statement. “It allows any company who wishes to pay our customer’s costs for accessing that company’s content to do so. This is purely voluntary and non-exclusive. It is an offering by that company, not by AT&T. We simply enable it. The bottom line is that this can save money for our customers. We see no reason why this is not a good thing.” Cicconi said AT&T is “completely confident” that sponsored data complies with the FCC’s net neutrality rules.
Wheeler reiterated his support for the agency’s net neutrality rules, which he said have “helped preserve the Internet as an open platform for innovation and expression,” and increased predictability in the marketplace. Wheeler said he supports “common law-like approaches” to determining the difference between appropriate and inappropriate broadband network conduct. This means the “very general principles” in the net neutrality order “should be reduced to” justifiable practices “on the basis of facts arising from specific circumstances,” he said. Wheeler said it’s “essential” to the public interest that “the government -- and by ‘government’ I mean the FCC -- have the power to oversee the broadband networks and to intervene to forestall their exploitation by unacceptable acts."
Wheeler also spoke of the “once-in-a-lifetime” opportunity that the broadcast incentive auction will present for broadcasters. They don’t simply have the opportunity to sell their spectrum and exit the business, Wheeler said. Instead, he said they can “bolster their balance sheets, reduce capital expenses, and continue their traditional business by sharing a channel with other broadcasters.” Broadcast licenses are 6 MHz of spectrum, which was enough for only one analog waveform, but now offers sufficient capacity for multiple digital TV signals “to coexist comfortably,” Wheeler said. “The rebanding associated with this auction is hard enough; when it is done the ability to do it again will be virtually nil. There will not be another round of broadcast incentive auctions."
Wheeler touted the upcoming IP transition trials, which will begin shortly after an order is approved at this month’s FCC meeting, he said. (See separate report below in this issue.) There, the commission will invite proposals for a “series of experiments” utilizing all-IP networks, said Wheeler. “We hope and expect that many proposed experiments, wired and wireless, will be forthcoming. Those experiments will allow the networks, their users, the FCC and the public to assess the impact and potential of all-IP networks on consumers, customers and businesses in all parts of our country, including rural America.”