FCC Under Growing Pressure to Impose Same Net Neutrality Rules on Wireless, Wireline

The 2010 order imposed a weaker standard for prohibitions on blocking on wireless and exempted mobile from the nondiscrimination rule. The commission found that wireless broadband “is at an earlier stage in its development than fixed broadband” and a more “measured” approach was needed (http://bit.ly/1yrsmmY). But this approach was controversial in December 2010 and FCC Democrats Michael Copps and Mignon Clyburn questioned the distinction.

The FCC’s “justification for that distinction finds no basis in the marketplace four years later and is in fact counterproductive to preserving a meaningful open internet,” said Access Sonoma Broadband, the Benton Foundation and Public Knowledge in joint comments to the FCC (http://bit.ly/1t3DfZn). The wireless market “is now sufficiently established and robust to support strong protections on par with those provided to wireline subscribers,” the groups said.

Those arguments are being countered by wireless industry commenters. Mobile broadband is still evolving, just as it was in 2010, and wireless carriers face “unique” challenges managing their networks, Verizon said in comments posted by the FCC Wednesday (http://bit.ly/1oIwlol). Wireless broadband demands “complex and dynamic management of spectrum as the number and mix of users being served by a cell site changes in sometimes highly unpredictable ways,” Verizon argued. “These complexities are compounded by the scarce spectrum resources available to each provider, which constrain a provider’s ability to increase network capacity to meet subscriber needs and quality-of-service expectations.”

Ground Already Covered

The FCC looked very closely at the differences between wired and wireless networks just four years ago, said Mobile Future Chairman Jonathan Spalter in an interview Wednesday. FCC officials “came to not only a reasonable conclusion, but they came to a scientific conclusion, which is that wireless is different,” he said. Spalter said a single strand of fiber carries a thousand times more bytes per second than even a massive wireless channel. Network operators need to be able to manage networks, he said, and “one-size-fits all” regulatory frameworks “drafted and imposed by lawyers” won’t work for wireless networks.

Rick Kaplan, an aide to former FCC Chairman Julius Genachowski when the 2010 rules were approved, said he would not be surprised if the FCC opts to impose the same rules on wireless and wireline. “This chairman seems far less attached to the idea that he must have industry sign-on than the previous one,” Kaplan said. The 2010 order also relied on the argument there was more competition in wireless than wireline, he added. “With MetroPCS and Leap disappearing and with Sprint and T-Mobile about to merge, and with the relative dominance of AT&T and Verizon, I would not be surprised to see this FCC find that distinction no longer holds four years later.” It “is all wireless all the time” at the current FCC, Kaplan said. “It would seem odd, indeed, if it focused any open Internet regulations only on wireline broadband services. At that point, from this FCC’s viewpoint, why bother?” Kaplan, now executive vice president at NAB, said he has no position on the issue.

The market hasn’t changed much since 2010, said Paul Gallant, analyst at Guggenheim Securities. The difference is wireless is becoming “deeply enmeshed in people’s lives, so the idea of leaving it untouched by any rules is a harder sell today than four years ago,” he said: If the FCC is seeking middle ground, “it might rope in wireless but create a presumption in favor of prioritization, with perhaps the opposite presumption for wireline operators."

"As a political matter,” it won’t be a surprise if the FCC subjects wireless to wireline rules, said Berin Szoka, president of TechFreedom. “Being seen as regulating wireless more heavily would certainly allow Wheeler to throw a bone to those groups currently pushing Title II after he declines to go down the Title II path.” But at the same time, if the FCC moves in that direction it seems less likely it will reclassify broadband as a Title II service, Szoka said. The Telecom Act “seems to define wireless data networks as private carriers and bar making them common carriers,” he said.

Stick to Course

Former Commissioner Robert McDowell, who voted against the 2010 rules, said he hopes the FCC doesn’t reverse course on wireless. “While nothing is broken in the broadband Internet access market that needs fixing, wireless broadband is the fast growing segment of the broadband market and is by far the most competitive,” said McDowell, now a Hudson Institute visiting fellow. “If there’s zero evidence of failure in the wireline market, there’s less than zero evidence of market failure in the wireless market because it’s so competitive.”

Former FCC Wireless Bureau Chief Fred Campbell said imposing the wireline nondiscrimination rule on wireless carriers would require the FCC to reverse decades of precedent interpreting Section 202’s nondiscrimination provision. “For nearly 40 years the FCC has consistently held that competitive carriers are presumptively unlikely to discriminate unreasonably,” Campbell said. “It is for this reason that the FCC has relied on the free market to prevent unreasonable discrimination in the mobile wireless market, an approach that has been upheld by the courts. ... I think it highly unlikely that the FCC could successfully justify changing course at this point.” Campbell is director of the Center for Boundless Innovation in Technology.

The FCC would be hard pressed to justify treating wireline and wireless the same, said Doug Brake, telecom policy analyst at the Information Technology and Innovation Foundation. Wireless networks “have limited capacity, largely because of the limited availability of spectrum, and should be allowed the flexibility to manage that limited capacity accordingly,” he said. Wireless is “a relatively new phenomenon with rapidly changing technology,” he said.

"It would be particularly ill-advised to impose neutrality mandates on wireless providers when, over the last 20 years, the sector has flourished absent such regulation,” said Free State Foundation President Randolph May. “Several wireless providers are now offering consumers plans that would violate net neutrality rules if they were applied, and consumers are benefitting from these options.”