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Hundt on Zero Rating: FCC Needs to Let Consumers Get Free Stuff - Broadcasting & Cable

Hundt on Zero Rating: FCC Needs to Let Consumers Get Free Stuff

Suggests FCC should not foreclose business model
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Former FCC chairman Reed Hundt signaled Wednesday he thinks the FCC is going to have to allow some form of zero rating plans.

Hundt was paired in a lively discussion with current Republican FCC commissioner Michael O'Rielly at the Multicultural Media, Telecom and Internet Council's 14th annual Access to Capital and Telecom Policy Conference in Washington Wednesday.

Asked about the FCC's current investigation into zero rating plans under its network neutrality general conduct standard, Hundt said he thought the FCC was going to have to decide that people—in this case broadband providers carving out services from usage-based pricing plans—are going to be allowed to give things away for free. "Being against free is not very popular," he added.

Commissioner O'Rielly said he did not want the FCC to foreclose the kind of experimentation represented by zero rating plans. He said the FCC's investigation has caused companies to keep some offerings on the sideline awaiting an FCC decision and complained that there is no process for concluding debate over issues under the standard. 

The pair diverged sharply over the FCC's recent court victory in the ISP challenge to that general conduct standard and other parts of the Open Internet order.

Hundt said it was the second most important legal victory for the FCC, after the FCC's victory under Hundt establishing the FCC's jurisdiction over telephone regulation. He said that had the court not also upheld the FCC's jurisdiction over regulating a free and open Internet, the commission would be essentially out of business, including being unable to be a watchdog for innovative minority entrepreneurs.

O'Rielly, who voted against the order, said the court should not have blessed the FCC's adoption of prescriptive rules absent any evidence of a problem, saying the zero rating debate vetting under the general conduct standard was a prime example of companies trying to innovate and build a new business, but have to worry that the FCC could jump in anytime, on anything, and decide after the fact it was out of bounds.

O'Rielly said he had talked to manufacturers who had changed product lines because of the decision.

Each was asked what FCC priorities they would like to see under the next presidential administration. O'Reilly said he would like to see some humility and collegiality. Citing a former boss, he said if neither side is asked to bend on principles, there should be room for common ground in the middle, within the bounds set by Congress in statute.

Hundt, who pointed out he was a former law school classmate for Hillary Clinton (who would not go out with him, he added), was more specific.

He pointed out that the FCC is rolling out its plan for freeing up spectrum for 5G this week and said buildout rules would need to be in place to insure the new technology is rolled out everywhere and to everyone regardless of income or geography. He also said that the FCC might look for more progressive ways to fund its programs (he conceded such funding was essentially a tax). He did not say exactly what programs he was talking about, but did talk elsewhere about Lifeline and E-rate subsidies. He said he did not want to give away too much about what Clinton was thinking but suggested that "those who have a lot of money could pay a greater proportion."

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