No Content Neutrality Rules in Open Internet Order, Wheeler Tells ACA
Content neutrality rules barring content companies from charging cable providers and ISPs for access to content based on their number of Internet subscribers won’t be part of a new open Internet order, FCC Chairman Tom Wheeler told the independent cable operators at the American Cable Association’s Washington Summit Wednesday. ACA officials and Reps. Anna Eshoo, D-Calif., and Rep. Peter Welch, D-Vt., all raised the issue -- sometimes referred to as “cableization of the Internet” -- at the conference as a threat to consumers, but Wheeler said rules controlling that practice were not the first priority of new net neutrality regulations.
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"The first issue is to make sure the Internet is open,” Wheeler said. New FCC rules to make that happen are unlikely to contain regulations involving peering or content neutrality, Wheeler said, calling both issues related to net neutrality but ultimately “ancillary activities.” Wheeler said a new net neutrality order would be put before the commission this spring, and that it won’t be intended to “revolutionize the approach to the open Internet.” The new rule will stick to the “basic concepts” of transparency, non-blocking and nondiscrimination, Wheeler said.
Content companies denying ISPs access to certain Internet content unless they pay a per Internet subscriber fee “doesn’t fit what made the Internet what it is,” Eshoo said, calling such practices a “red flag.” Congress should address the issue, said Welch. “The video model should not transition to the Internet,” Welch said. Legislators “can’t stand idly by and let consumers get squeezed,” he said.
Content neutrality rules are important because cable providers may increasingly move away from offering TV content, said Bob Gessner, ACA vice chairman and MCTV president, and ACA Chair Colleen Abdoulah, who’s also CEO of WOW Internet Cable Phone. Gessner is to take over the ACA chairmanship in July. Rising programming costs and cable providers’ limited options under the bundle system will start to force customers and cable provides out of the linear TV business and toward the Internet, Gessner said.
WOW is already in talks with streaming service Aereo about a possible collaboration, Abdoulah said, though she conceded such talks are on standby pending the outcome of Aereo’s many court cases. Many cable companies are talking with over-the-top providers, the cable officials said. ACA President Matt Polka said ACA supported Aereo’s efforts at the Supreme Court.
If cable TV stops buying content, programmers will seek to recoup that lost revenue through a “TV tax on the Internet,” Gessner said, referring to “cableization.” Linear TV subsidizes free online content, said Abdoulah. If linear TV declines, that money would have to be made up somehow, possibly through charging cable companies for access to online content. ESPN3 already charges ISPs to allow customers access to its content but such a system would have serious consequences for providers if more popular sites such as Google or Facebook followed the same route, ACA officials said.
Wheeler also discussed the commission’s recent moves to ban joint negotiation in retransmission consent and further restrict joint sales agreements, which he characterized as “self-evident” steps that “had to be taken.” He said both rule changes were designed to curb practices that had moved away from the original intent of Congress.
The “rebuttable presumption” that joint negotiations of retransmission consent contracts are in bad faith is part of the commission’s effort toward process reform, Wheeler said. He said that rebuttable presumptions would be used in future commission NPRMs to promote clarity and show interested parties where the FCC “thinks things should end up.” He also pointed to the commission’s use of consent agendas as an example of process reform in action.
The E-rate program needs to be adjusted to spend money more efficiently, Wheeler said. “How do we readjust the program so that 21st-century money isn’t being put into 20th-century problems?” he asked. Wheeler said an item involving changes to E-rate would be in front of the commission this spring, with the goal of having the matter completed before the beginning of the 2015 school year.
ACA member companies should conduct their own IP transition trials, Wheeler said. “Everyone in this room knows how to build an IP network,” he said. “I'd love for you guys to do trials,” Wheeler told the conferees. More trials would provide more data, which the FCC should be using to make decisions going forward, Wheeler said. However, he also said it’s important for the commission to embrace audacity and make decisions based on data “rather than sit around and think about things.” Audacity, Wheeler said, “is a force multiplier.” -- Monty Tayloe (mtayloe@warren-news.com)