FCC Won’t Tolerate Paid Prioritization Harmful to Competition, Wheeler Says
The FCC won’t tolerate paid prioritization that has a negative effect on competition, Chairman Tom Wheeler said in the news conference after the monthly meeting. Wheeler also said the FCC plans a series of roundtable discussions to add to the commission’s already extensive record on net neutrality. The sessions will be Sept. 16 and 19 and Oct. 2 and 7 at the commission, said an agency notice (http://fcc.us/1oqDZrG).
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"Anything that interferes with the virtuous cycle is something that can and should be prohibited,” Wheeler said Friday. “If prioritization hurts consumers, hurts innovation, hurts competition, degrades service, it’s DOA [dead on arrival].”
Wheeler indicated the agency is watching other wireless carriers, not just Verizon, to see whether they're slowing data speeds to some subscribers on their LTE networks. Wheeler sent Verizon a letter asking about the practice in late July (CD July 31 p1). Wheeler said the agency has written similar letters to the other three national carriers as well.
Last week, Public Knowledge filed letters of complaint against all four national carriers questioning their throttling practices (http://bit.ly/1oMPTvx). PK asked whether they're violating the transparency provisions of the 2010 rules, which also apply to wireless.
"'All the kids do it’ never was never something that worked with me when I was growing up and it didn’t work with my kids,” Wheeler said. The FCC is examining what constitutes “reasonable network management,” which should be a technology and engineering determination, he said. It should not be a “business issue,” he said. Wheeler indicated he was concerned about carriers “choosing between different subscribers based on [their] economic relationship with them.”
Wheeler wouldn’t say more about the extent to which the eventual FCC revised net neutrality rules will treat wireless the same as wireline. “That’s one of the issues we asked in our NPRM,” he said. “That’s one of the questions that we'll be deciding.”
"It sounds as if he could be searching for an FTC-like ‘unfair competition' standard -- but to be enforced by the FCC,” said former FCC Commissioner Robert McDowell. As long as that construct “doesn’t function as effective common carrier regulation” but is more of a “commercially reasonable” standard, it may be able to survive appeal based on the decision in Verizon v. FCC, the U.S. Court of Appeals for the D.C. Circuit case which threw out most of the 2010 net neutrality order, he said. “But why not just let the FTC handle these issues just as it does for the rest of the economy?"
The biggest issue remains whether the FCC steps up to the plate and reclassifies broadband as a Title II Communications Act service, said Free Press Policy Director Matt Wood. “The question is not whether the chairman says he would ban bad practices,” Wood told us. “The question is whether he actually can ban them with the Section 706 approach and the answer is that he can’t."
PK Senior Staff Attorney John Bergmayer also stressed the importance of Title II reclassification, though he welcomed Wheeler’s warnings against business practices that prove negative for competition. “I'd argue that paid prioritization has those effects inherently, which makes a flat prohibition the most sensible course,” said Bergmayer.
"Unless Wheeler wants to end up in the Title II boat, a bad place for the Internet to be, he ought to start explaining to the public how prioritization and other forms of differentiation can actually benefit consumers,” said Free State Foundation President Randolph May. “He only seems to want to emphasize perils rather than benefits.”