FCC Chairman Tom Wheeler: Internet Will Not Be Divided Into “Haves” And “Have-Nots”

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At a meeting of the National Cable & Telecommunications Association this afternoon, FCC Chairman Tom Wheeler took to the stage and again addressed net neutrality, along with municipal broadband, an issue that impacts the open Internet.

Wheeler spoke at length regarding the idea of ISPs creating “fast lanes,” in which content companies can pay networks for faster, better access to end consumers. The standard fear at such a setup is that it would tilt the market in favor of incumbents at the expense of newcomers. This is especially troubling on the Internet, where so many of the current incumbents were but a few years ago the newcomers.

TechCrunch obtained a copy of Wheeler’s prepared remarks from the FCC. Regarding the idea that the Internet will be bifurcated, Wheeler spoke forcefully:

Let me be clear. If someone acts to divide the Internet between “haves” and “have-nots,” we will use every power at our disposal to stop it. I consider that to include Title II. Just because it is my strong belief that following the court’s roadmap will produce similar protections more quickly, does not mean I will hesitate to use Title II if warranted.

Yesterday Wheeler stated in a blog post that he would be willing to use Title II to regulate the Internet essentially as a utility if needed to protect the openness of the Internet. However, in his estimation, to do so would take years of legal wrangling — with the very people he addressed today, I’d wager — to put into place. He indicated that he favors more rapid action.

The question becomes how the FCC would use a “commercial test” to determine what behavior would be counted as reasonable under the new rules, and what would be deemed contrary to a fully free Internet.

This is, I think, his key comment regarding what we could expect:

Prioritizing some traffic by forcing the rest of the traffic into a congested lane won’t be permitted under any proposed Open Internet rule. We will not allow some companies to force Internet users into a slow lane so that others with special privileges can have superior service.

That, if meant and enforceable, is a fine standard. Theoretically, the damage to the Internet would be minor, when compared to how bad the pay-for-speed idea could become, if those rules were intensely applied to ISPs. It would still, in my view, be better to avoid the entire challenge that Wheeler wishes to create a solution to, but here we are.

Wheeler did hit upon a very important point towards the end of his discussion, pivoting to competition. He said the following regarding recent investment from various ISPs:

One of the most effective tools for ensuring Internet openness is competition. I developed a great deal of my regulatory philosophy in the days when cable was fighting to be allowed to compete.  As you probably have heard, the mantra today at the FCC is “Competition, Competition, Competition.”  Competition promotes efficient pricing, technical progressiveness, consumer protection, and, yes, private investment. Case in point: AT&T just announced plans to expand fiber networks that can deliver 1 Gigabit per second service to up to 100 communities.

Yes, Wheeler is right that competition among ISPs would lead to more openness. How so? It’s reasonable to assume that consumers would want the option to select whatever content they desire and have it delivered to their homes without bias instituted by a third-party to another third-party. Given that, consumers would select ISPs that respected more stern net neutrality rules more than those that do not, or not as strictly.

As Google rolls out its Fiber service, expect ISPs to scramble to keep up.

Capping his points regarding competition, Wheeler endorsed municipal broadband. This is a way for communities to put in place locally sourced competition. He also denounced state-level bans of this type of service:

[I]f municipal governments—the same ones that granted cable franchises—want to pursue it, they shouldn’t be inhibited by state laws.  I have said before, that I believe the FCC has the power – and I intend to exercise that power – to preempt state laws that ban competition from community broadband.

Wheeler has been on a kick lately to speak plainly about how his plans for amended net neutrality will preserve openness, ensuring consumer safety. But at every turn, we find Wheeler defending his plan to allow for companies to pay ISPs for preferred delivery of one sort or the other. Here’s Wheeler’s somewhat muffled explanation of why this matters:

Our goal is rules that will encourage broadband providers to continually upgrade service to all. We will follow the court’s blueprint for achieving this, and, I must warn you, will look skeptically on special exceptions.

So the goal of the new rules is to drive investment. Perhaps. I’d argue that the risks that Wheeler appears to be cognizant of outweigh the potential market benefits of expected service upgrades to the networks.

Will those upgrades be served to those who pay or to the average consumer? Despite everything Wheeler has said, the investment onus will always rest on the party willing to pay more. And that’s backwards.