The FCC Chief Just Told the Cable Execs to ‘Put Away Their Party Hats’ on Net Neutrality

The chairman warned the industry it faces tough regulation should it abuse its newfound internet leeway.

CC Chairman Tom Wheeler gives testimony before the Financial Services and General Government Subcommittee hearing on 'Review of the President's FY2015 funding request and budget justification for the Federal Communications Commission (FCC).'on March 27, 2014 on Capitol Hill in Washington, DC.
National Journal
Laura Ryan Brendan Sasso
April 30, 2014, 1:38 p.m.

The head of the Fed­er­al Com­mu­nic­a­tions Com­mis­sion is warn­ing cable in­dustry lead­ers not to ab­use their power over In­ter­net ac­cess — lest they find them­selves on the re­ceiv­ing end of tough­er fed­er­al reg­u­la­tion of the In­ter­net.

Speak­ing at the Na­tion­al Cable and Tele­com­mu­nic­a­tions As­so­ci­ation’s an­nu­al Cable Show on Wed­nes­day, FCC Chair­man Tom Wheel­er re­minded the in­dustry that he has the power to re­clas­si­fy broad­band as a util­ity, which would grant his com­mis­sion much stronger lever­age to reg­u­late the in­dustry.

“If someone acts to di­vide the In­ter­net between ‘haves’ and ‘have nots,’ we will use every power at our dis­pos­al to stop it,” said Wheel­er, a former NCTA pres­id­ent and wire­less lob­by­ist.

Wheel­er said his op­tions in­clude “Title II,” a move that would re­clas­si­fy broad­band as a “tele­com­mu­nic­a­tions ser­vice” — the same clas­si­fic­a­tion cur­rently ap­plied to tele­phone util­it­ies.

Lib­er­al ad­vocacy groups have urged the FCC to take that step, say­ing it’s ne­ces­sary to pro­tect the open In­ter­net, but the com­mis­sion has so far res­isted that call.

Wheel­er pro­posed net-neut­ral­ity rules last week that would al­low In­ter­net ser­vice pro­viders to charge web­sites for ac­cess to spe­cial “fast lanes.” But the FCC chief warned the audi­ence of cable and broad­band ex­ec­ut­ives not to get too ex­cited.

“Re­ports that we are gut­ting the open-In­ter­net rules are in­cor­rect,” Wheel­er said. “I am here to say: Wait a minute. Put away the party hats. The open-In­ter­net rules will be tough, en­force­able and, with the con­cur­rence of my col­leagues, in place with dis­patch.”

The rules would still ban In­ter­net ser­vice pro­viders from block­ing or de­grad­ing any web­sites.

But con­sumer pro­tec­tion groups and lib­er­al law­makers fear so-called “fast lanes” would give rich web­sites, like Net­flix or Face­book, an un­fair ad­vant­age over small web­sites, po­ten­tially pre­vent­ing “the next Face­book” from reach­ing its po­ten­tial.

Wheel­er is try­ing to re­work the net-neut­ral­ity rules after a fed­er­al court struck down the old reg­u­la­tions in Janu­ary. Al­though he has lim­ited leg­al op­tions un­der the cur­rent au­thor­ity, re­clas­si­fy­ing broad­band as a “tele­com­mu­nic­a­tions ser­vice” would give him ex­pans­ive powers — in­clud­ing to ban ISPs from speed­ing up any web­sites.

Wheel­er em­phas­ized that his pri­or­ity is to get new net-neut­ral­ity rules in place as quickly as pos­sible, but said he will do what’s ne­ces­sary to pro­tect an open In­ter­net.

“Now, as chair­man of the FCC, I do not in­tend to al­low in­nov­a­tion to be strangled by the ma­nip­u­la­tion of the most im­port­ant net­work of our time, the In­ter­net,” Wheel­er said.

But while lib­er­als are push­ing for tough­er rules, re­clas­si­fic­a­tion would prompt a massive back­lash from Re­pub­lic­ans and busi­ness groups.

Re­clas­si­fy­ing the In­ter­net as a pub­lic util­ity is a worst-case scen­ario for the cable in­dustry. On Tues­day at the Cable Show, NCTA Pres­id­ent and former FCC Chair­man Mi­chael Pow­ell urged the agency not to make the In­ter­net a util­ity.

Pow­ell com­pared the state of the In­ter­net to the state of util­it­ies, like elec­tri­city, which he said ex­per­i­enced 307 ma­jor black­outs in 2011.

“Can you ima­gine if the In­ter­net blacked out 300 times a year?” Pow­ell asked. “No, be­cause it doesn’t. Be­cause the In­ter­net is not reg­u­lated as a pub­lic util­ity, it grows and thrives, watered by private cap­it­al and a light reg­u­lat­ory touch.”

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