FCC Chair Wheeler: I Want to Regulate the Internet As a Utility

by Gaius Publius

In a dramatic statement, issued through Wired magazine, FCC Chairman (and former telecom lobbyist) Tom Wheeler has "fully" endorsed reclassifying the Internet as a common carrier under Title II of the Telecommunications Act. In other words, the Internet, all of it, will be regulated as a "utility," the way your phone service is.

Wheeler's piece opens with a fascinating story in which he tells his own (bad) experience as a fledgling Internet provider dealing with the lock-out policies of cable providers — while Steve Case, the founder of what would become AOL, was successfully selling a similar, but much inferior product using common-carrier–protected phone lines. That part is not just interesting; it makes what follows entirely credible.

Then Wheeler writes this:

Originally, I believed that the FCC could assure internet openness through a determination of “commercial reasonableness” under Section 706 of the Telecommunications Act of 1996. While a recent court decision seemed to draw a roadmap for using this approach, I became concerned that this relatively new concept might, down the road, be interpreted to mean what is reasonable for commercial interests, not consumers.

That is why I am proposing that the FCC use its Title II ["common carrier"] authority to implement and enforce open internet protections.

Using this authority, I am submitting to my colleagues the strongest open internet protections ever proposed by the FCC. These enforceable, bright-line rules will ban paid prioritization, and the blocking and throttling of lawful content and services. I propose to fully apply—for the first time ever—those bright-line rules to mobile broadband. My proposal assures the rights of internet users to go where they want, when they want, and the rights of innovators to introduce new products without asking anyone’s permission.

All the right words, finally.

Words and Deeds

Still, so far just words. The deeds will have to match them. Two pieces for you. One, this from one of the main advocacy groups, Popular Resistance (my emphasis throughout):

Today [February 4] is the day that the FCC announced the rules for net neutrality that will be voted upon at their next meeting on February 26. Together, our work over the past year is the reason that we achieved reclassification of the Internet as a common carrier under Title II of the Telecommunications Act. We are on the verge of a tremendous people powered victory over the telecom industry. We expect more analysis of the actual language to come soon. But for now, we can celebrate that people power conquered the cable industry and welcome net neutrality back. (Here is a fact sheet from the FCC on the proposed rule.)

We agree with Chairman Wheeler that the interests of the telecoms is not always consistent with the public interest. [Yes, Wheeler actually said that.] We urge the Chairman to not compromise with telecoms and Internet providers as this is the opportunity to follow the wishes of the American people and put in place rules that ensure the Internet is free of discrimination.

We are also pleased to see that proposals in Congress for fake net neutrality are not moving forward. Both political parties would be wise to side with the American people, small businesses, Silicon Valley and other Internet-based businesses rather than the telecom companies. The public wants real Net Neutrality.

We look forward to reviewing the final rule but if it is consistent with the statement issued today, we will do all we can to ensure that the telecom’s influence in Congress does not undo rules that provide for real Net Neutrality and preserve the dynamism of the Internet as a democratized form of communication and vehicle for innovation.

So, notes of relief, notes of caution. Reasons for concern are two. One, that Wheeler will weasel in a way that matters. From his statement linked above:

All of this can be accomplished while encouraging investment in broadband networks. To preserve incentives for broadband operators to invest in their networks, my proposal will modernize Title II, tailoring it for the 21st century, in order to provide returns necessary to construct competitive networks. For example, there will be no rate regulation, no tariffs, no last-mile unbundling. Over the last 21 years, the wireless industry has invested almost $300 billion under similar rules, proving that modernized Title II regulation can encourage investment and competition.

Like Popular Resistance, we'll have to see what that means. "Returns" means profit. Still, he's firm and clear on many of the rules he's proposing, like no throttling, blocking, or "fast lanes." See page 2 of the FCC's Fact Sheet (pdf) for that. Page 3 talks about "Forbearance," Title II regulations that won't apply, which is where we could get some take-back.

Industry Reaction

The second note of concern is Congress and its (bought-and-paid) attempt to block this move. As you read above in the Popular Resistance statement, industry shills in Congress (is it really just Republicans?) are working to prevent this reclassification. The latest attempt is a set of bills before the House and Senate introduced by Sen. John Thune and Rep. Fred Upton. The analysis is here. In essence, these bills neuter both the public Internet and the FCC's ability to regulate it.

But according to Politico:

[Sen. John] Thune told MT on Tuesday [February 3] that it’s “unlikely” that the Republican draft net neutrality bill will move forward before the FCC votes on Wheeler’s net neutrality proposal later this month. There "probably" won't be a markup of the bill "any time soon," he said, adding that he’s still trying to get Democrats to support the bill.

Plus, Harry Reid is on the side of the angels on this one. So far, so good on that front. By the way, get ready for more of this from the heavy manipulators of the right-wing thought machine:

There’s a debate raging about how the FCC should regulate the Internet. Some advocates are pushing for “Title II.” That’s code for 1930s-style utility regulation. Title II would put the FCC squarely in the middle of the Internet — right beside the NSA. It saddles the Internet with price controls and other heavy-handed rules from a thankfully long-gone era. The debate over Title II isn’t a debate over net neutrality, which is why many net neutrality proponents actually oppose Title II. Instead, it’s a debate between a vocal minority that wants greater government control over broadband companies, and defenders of a bipartisan consensus around a “Hands Off the Internet” approach. ...

Drivel. Focus-tested. Industry-bought. But that's where they're headed. (About that "bipartisan consensus," I know it exists. I'd love to have the names of any elected Democrat who signs onto this pushback.)

The Ruling Will Apply Very Broadly

What's striking (and certain) about this proposal is how sweeping it is. At least in the main, nothing is being finessed. From the FCC Fact Sheet again:

First, the Chairman’s proposal would reclassify “broadband Internet access service”—that’s the retail broadband service Americans buy from cable, phone, and wireless providers—as a telecommunications service under Title II. We believe that this step addresses any limitations that past classification decisions placed on our ability to adopt strong Open Internet rules, as interpreted by the D.C. Circuit in the Verizon case last year. But just in case, we also make clear that if a court finds that it is necessary to classify the service that broadband providers make available to “edge providers,” it too is a Title II telecommunications service. (To be clear, this is not a “hybrid”— both the service to the end user and to the edge provider are classified under Title II.)

Nice. Not much weasel there. The Verge comments on this as well:

The biggest revelation from the proposal is the decision to lump wireless networks in with wired broadband, something the FCC has avoided doing for years thanks to enormous pressure from Verizon and AT&T. "I propose to fully apply — for the first time ever — those bright-line rules to mobile broadband," Wheeler wrote. "My proposal assures the rights of internet users to go where they want, when they want, and the rights of innovators to introduce new products without asking anyone's permission." Including wireless providers in the rules is a hugely important move, since we've seen that the biggest players have been willing and able to abuse internet openness. AT&T once blocked FaceTime for completely arbitrary reasons, and most recently, T-Mobile has disregarded the principles of net neutrality by giving some music companies special exemptions from data caps.

As near as I can tell, it's all one and all lumped together — phone lines, cable, mobile devices and cell phone towers, string cheese, whatever. If it gives you the Internet, it's a common carrier and regulated under Title II, period. Again, so far, so good.

Bottom Line: February 26 Could Be Internet Freedom Day

The time between now and February 26, when the full FCC votes on the rules, will be hugely important. Telecom companies are formidable beasts, giants, with money to spare and to burn. They will not go quietly. The good news is that Obama appears firmly in the good camp (finally!) and other Democrats appear to be holding fire, however much some of them want that good telecom money for themselves. Thune, as you read, is slow-walking his bill, and Reid has not waffled.

Things to watch: The "forbearances" contained in the final language. The vote of the commissioners themselves. The post-decision reaction of the telecoms.

Nevertheless, we're that close. Finally.

[Update: Corrected typo: Steve Case, not Tom Case.]

GP

Cross-posted with permission from Digby's Hullabaloo.