FCC Chairman Tom Wheeler signaled Wednesday that the FCC is not likely to bless paid prioritization if its impact is to disadvantage edge providers, saying that "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."
That is the so-called nuclear threat of applying some form of common carrier mandatory access regs to Internet access. Also in the threat, more like a promise, the chairman said the FCC would step in to preempt state laws on municipal broadband as a way to promote competition.
Wheeler dispensed with the light banter, he said as much, in his Cable Show keynote speech Wednesday in order to issue various warnings to the crowd, in this case with an emphasis on their ISP hat, though Wheeler said anyone celebrating the press reports that his new network neutrality rules would gut the open Internet should take off their party hats.
He said that because cable has become the principle provider of broadband, he needed to spell out some expectations behind the new rules. That included the commission's judgment that without those rules, “broadband providers represent a threat to Internet openness," he said, quoting from the D.C. circuit decision in Verizon v. FCC, "and could act in ways that would ultimately inhibit the speed and extent of future broadband deployment.”
Wheeler said that innovation is "fragile" and that broadband providers have an incentive to "interfere" with competing edge providers and, again citing the court, said that broadband providers have "powerful incentives to accept fees from edge providers, either in return for excluding their competitors or for granting them prioritized access to end users.”
Following the speech, NCTA President Michael Powell took issue with the suggestion cable was a threat to openness. He pointed out that the industry had not opposed the old rules and would be a constructive partner in the new ones. Wheeler countered that he had no doubt of it.
"There has been a great deal of talk about how our following the court’s instruction to use a 'commercially reasonable' test could result in a so-called 'fast lane' and Internet 'haves' and 'have nots,'" he said. "This misses the point that any new rule will assure an open pathway that is sufficiently robust to enable consumers to access the content, services and applications they demand and innovators and edge providers the ability to offer new products and services."
Wheeler made it clear that fast lanes and slow lanes were not on his network blueprint. "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."
One criticism of allowing for paid priority is that, while the Netflix's and Amazon's of the world could pay for faster video traffic, startups might not be similarly situated. Wheeler addressed that criticism, at least implicitly.
"In the 30 years since I last stood on this stage [as NCTA president] I have built new technology-based companies as an entrepreneur, and helped other companies grow as a venture capitalist," he said. "I know in my bones how hard it is to start a company with innovative ideas. 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 flatly: "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 left some rhetorical room for permitting some to get priority service, though he had clearly signaled that could be an uphill climb in some cases.
Wheeler said the bottom line on Open Internet rules is that "the Internet will remain an open pathway. If users can’t effectively use the pathway then the conduct will be a violation of the Open Internet rules."
The devilish detail will be how the FCC defines effective use, which is where the "commercially reasonable" discrimination case-by-case standard comes into play.
Wheeler may have been talking to cable ops, but he was also clearly preaching to the consumer advocacy groups who have pilloried his effort to restore the rules while coming up with a way not to ban unreasonable discrimination outright, which the court said was a no-no, while still giving the FCC the chops to define and prevent unreasonable discrimination.
Wheeler segued into his assertion that, given cable's move into broadband dominance. "it has gone from regulatory constraints that were breathtakingly inhibiting to regulatory constraints that are barely discernible." He said one big change was that when he had headed NCTA, the industry was the insurgent, now it was the incumbent from whom much was expected given how much it had been given.
Wheeler said that while there are those who say the FCC's deregulation of broadband was the equivalent of the discovery of fire or the invention of the wheel," and others who equated it with original sin. He did not weigh in on where he fit within those hyperbolic extremes. But he did say that regardless, that "almost unimaginable" change in regulatory status "does not put it in a zone free of obligation and oversight."
Wheeler said one way to promote an open internet was to promote competition, and one way to do that was through municipal broadband. While he did not address that issue in his revision of Open Internet rules, he made it clear he would act.
"[I]f municipal governments—the same ones that granted cable franchises—want to pursue it, they shouldn’t be inhibited by state laws," he said. "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."