Following Mark Zuckerberg’s opening keynote at Mobile World Congress on Monday, Federal Communications Commission (“FCC”) Chairman Tom Wheeler took the stage yesterday. As Wheeler’s first public appearance at an industry event since the FCC’s landmark vote last week to enforce net neutrality, the keynote was expected to be closely followed by global counterparts, and InsidePrivacy had a front-row seat from Barcelona.
Wheeler’s conversation with Director General of the GSMA Anne Bouverot covered a range of topics, including net neutrality, spectrum auctions, and more widely, the role of regulation as it relates to investment and innovation. Of primary interest, of course, was the topic of regulation as it pertains to Open Internet rules. On this subject, Wheeler began by reframing the notion that last week’s 3-2 vote was a close one, stating, “We had 50% more votes than they did, is the way I look at it.” This year’s Mobile World Congress, therefore, was a victory lap as some have termed it — or sales pitch — allowing Wheeler to explain and defend the FCC’s new net neutrality rules.
Wheeler started by describing the FCC’s discussions over the last year, and the vote itself, as viewing the agency’s policies through the following multi-issue prism:
- Broadband. How do we unleash the power of broadband during a powerful and transformative time?
- Spectrum. How do we ensure that we have adequate spectrum? Because the network of the 21st century is going to be wireless, we have to make sure that we have ample spectrum and also the right kind of spectrum.
- Competition. Competition is the best protector the consumer ever had and the best friend the innovator ever had.
- National Security & Public Safety. At the heart of every network is a set of responsibilities to make sure that people are safe and that the Nation is safe.
Noting that last week’s vote was a culmination of an ongoing process throughout which both he and President Obama were longtime supporters of net neutrality, Wheeler described the broader question overlaying this four-part framework as ultimately coming down to, “If the Internet is the most powerful and pervasive platform in the history of the planet, can it exist without a referee?” Wheeler insisted that, based on these considerations, the structure that the FCC put in place was not a regulatory one. Rather, in answering the overarching question, the FCC created a “yardstick” that measures simply whether activities “make sense” — or put another way (under Title II), whether they are “just and reasonable.”
If the Internet is the most powerful and pervasive platform in the history of the planet, can it exist without a referee?
Explaining the move to use Title II to reclassify broadband as a telecommunications service under the Telecommunications Act, and responding to those critics who opposed the Open Internet rules by calling them “depression-era monopoly regulation,” Wheeler said, “The fact is, we took the Title II concept, and we modernized it.” Specifically, Wheeler described the model for net neutrality as being built on the regulatory framework widely successful for mobile, in which the now $300 billion wireless industry asked Congress in 1993 to regulate mobile as common carriers under Title II, but without enforcement of the old monopoly-era regulations. He explained that, taking these rules as they exist today, the FCC evolved mobile’s construct and applied it to Open Internet, which “made it actually more deregulatory.”
The chairman simplified net neutrality into having only four core requirements: (1) no blocking, (2) no throttling, (3) no paid prioritization, and (4) transparency of information to consumers and edge providers. Returning to the well-established yardstick theory, Wheeler explained that, “For everything else, the question is, ‘Is it just and reasonable?’” Describing this regime as “about as far from the old style monopoly regulation as you can get,” Wheeler concluded that, “Our goal has been specifically not to impose [restrictions] or decisions that would order how the network should work.” He continued, “We want the network operators to be as innovative as possible; we want the network operators to have a revenue stream from consumer services that is unchanged the day after the regulation goes effective to the day before, because it’s with that revenue stream that they’ll then turn around and be able to invest in competitive networks.” Wheeler emphasized that there are no broad-stroke, old-school regulations that mandate how things must be done, but instead, a case-by-case determination will look at (1) impact to consumers, (2) impact on edge providers, and (3) public interest. Title II “in a modern way,” he said, allows for this balancing of interests between the business community’s need to generate revenue on the one hand, while keeping the Internet cost-accessible to consumers on the other.
We want the network operators to be as innovative as possible; we want the network operators to have a revenue stream from consumer services that is unchanged the day after the regulation goes effective to the day before, because it’s with that revenue stream that they’ll then turn around and be able to invest in competitive networks.
Switching to the question of whether Open Internet rules would stifle innovation by limiting the revenue of broadband providers, the chairman made clear once again that Open Internet is not regulation of the Internet: “This is no more regulating the Internet than the First Amendment regulates free speech in our country.” Wheeler insisted that net neutrality preserved rather than diminished the core precepts of innovation, which he described as (1) sufficient spectrum, (2) openness, and (3) competition. When put together, he said, those three elements created “the magic elixir that drives innovation.”
This is no more regulating the Internet than the First Amendment regulates free speech in our country.
Wheeler also discussed spectrum auctions, and in particular, the AWS-3 auction and next year’s planned incentive auction of 600 MHz broadcast TV spectrum. After being praised for 4G deployment in the United States, the chairman was asked his views on 5G, about which he had a particularly memorable response: “You stand in front of one of Picasso’s paintings [here in Barcelona], and I see something different than you see. I think that’s kind of what 5G is right now; it’s all in the eyes of the beholder.”
Claiming more than 85,000 attendees last year, Mobile Word Congress continues through this Thursday. A full video of Wheeler’s appearance can be viewed here.