Wheeler’s Likely Course on Wireless Net Neutrality Becoming Increasingly Clear

Wheeler was his most explicit comment yet on the topic this week at a net neutrality roundtable (CD Sept 17 p1). But in late July he raised the issue of whether Verizon was slowing data speeds of some of its customers for business reasons “designed to enhance your revenue streams” rather than because of “network architecture or technology.” The letter to Verizon (CD Jul 31 p1) was followed by letters to other major wireless carriers.

A month later Wheeler announced he was appointing Scott Jordan, professor at the University of California-Irvine, FCC chief technology officer (CD Aug 27 p6). One of the issues on which Jordan has done substantial work is wireless vs. wireline net neutrality and the importance of better defining what constitutes “reasonable network management.” Jordan is to moderate an FCC net neutrality roundtable Friday (http://fcc.us/1s8wuJ9).

The active management of wireless links “is fundamental to operating the network, not a small exception,” said Doug Brake, telecom policy analyst at the Information Technology & Innovation Foundation. Brake finds some of Jordan’s work on the issue interesting, he said. Jordan “points the way to limiting the commission’s reach to the top few layers of the network, potentially giving it the tools to prevent blocking of over-the-top VoIP applications, for example, while still leaving all the management decisions with the carriers.”

Brake said a nondiscrimination rule could be tough even at the application layer. “Recent offerings from Virgin Mobile and T-Mobile for example appear to be legitimate attempts at differentiation,” he said. “If we are going to have four carriers, it makes sense to let them compete on offerings."

Free State Foundation President Randolph May said it’s “discouraging” to think Wheeler “may believe that bringing wireless providers into the realm of net neutrality regulation will not inevitably lead to governmental intrusiveness in which the costs will greatly outweigh the benefits.” The move to regulation could have unintended consequences, May said: “It’s discouraging that Wheeler doesn’t seem to appreciate that all his talk about investigating wireless data caps and determining whether carriers are ‘enhancing their revenues’ leads right down the road to rate regulation and rigidly prescribed neutrality, which is just what the consumer advocates want.”

It seems “highly unlikely” the FCC won’t impose similar rules on fixed and mobile, said TechFreedom President Berin Szoka. “The problem is there’s not a lot of reason to believe the rules won’t cast a shadow” with unintended after effects, he said. “The ways that the rules cast a shadow over the industry matters as much as how the chairman intends for the rules to be applied.”

The FCC should have never approved different rules for wireless in the first place, said Kevin Werbach, professor at the University of Pennsylvania’s Wharton School and a former member of the Obama administration’s FCC transition team. Technical differences between wired and wireless “generally mean you need to manage wireless networks more aggressively,” Werbach said. “But that’s the flexibility the ‘reasonable network management’ standard was designed to allow for.”

If the FCC bases its rules on its authority under Section 706 of the Communications Act, rather than reclassifying broadband, whatever the FCC does may not matter, said Free Press Policy Director Matt Wood. “We don’t so much care whether the FCC extends the Section 706 rules to wireless because we're convinced that the Section 706 rules won’t work,” he said. “It’s basic math: two times zero is still zero.” Free Press supports platform parity, he said: “The same rules should apply to wireless and wired, even though reasonable network management could apply differently to each. It is true that wireless networks do have to deal with congestion more than wired networks, so what’s reasonable management could be different in each case.”

Politics Comes Into Play

Political considerations come into play, Szoka said. “Wheeler is trying to dress up the 706 route to be as tough as possible to allay the concerns of the people who are pushing for Title II,” he said. Werbach said if the FCC does reclassify broadband as a Title II service it may not be able to take that step for wireless. “There is language in Title III that makes it harder, and perhaps impossible, to impose Title II on wireless data services,” he said.

"The tidal wave of reactions to the net neutrality debate has now spilled over into wireless,” said BTIG analyst Walter Piecyk. “Chairman Wheeler could use the AT&T/DTV deal to secure key commitments on wireless net neutrality issues."

"There’s certainly a collection of data points suggesting wireless will get pulled into net neutrality and have the throttling issue examined,” said Paul Gallant, analyst at Guggenheim Partners. “But even if that happens, it’s a tricky issue and I doubt the chairman has made up his mind."

Meanwhile, Verizon Senior Vice President Craig Silliman corrected the record on the carrier’s stance on net neutrality. Wheeler said at the Tuesday FCC roundtable Verizon CEO Lowell McAdam had made clear the previous week at a financial conference Verizon would support parity in the treatment or fixed and mobile under revised net neutrality rules.

"Over the past several days there have been questions about Verizon’s position on ‘wireless net neutrality,’ and whether we support imposing the same net neutrality regulatory regime on mobile broadband that some wish to see imposed on wireline broadband networks,” Silliman said in a blog post (http://vz.to/1tnEmoG). “The answer is no."

CTIA sent Rep. Greg Walden, R-Ore., chairman of the Communications Subcommittee a letter Thursday asking him to urge the FCC to impose mobile-specific net neutrality rules (http://bit.ly/1qORkMw). CTIA President Meredith Baker reminded Walden that wireless is different.