As the new Federal Communications Commission chairman, Tom Wheeler has kicked up some dust in the tech community by laying the groundwork for a grand vision for the next generation of networks but then walking back one of the key principles of net neutrality. The stakes here are your rights to an open Internet—and the ability of the FCC to ensure those rights, through net neutrality rules and beyond.
Wheeler sparked the debate during remarks after a speech at the Ohio State University. Reading the tea leaves is a fun exercise, but with the FCC’s Open Internet rules (which implemented net neutrality into agency regulations) being reviewed by the D.C. Circuit Court of Appeals, his remarks are particularly important—for net neutrality and in defining how the FCC will regulate communications going forward.
So, what went down? First, a few words of background. Wheeler has already demonstrated that he is not tied to previous expectations when it comes to interacting with the public. A proficient blogger on the FCC’s site, he also released an e-book in conjunction with his appearance at Ohio State. The e-book, and his prepared remarks, provide an important look into his priorities as chairman.
Wheeler uses both the e-book and his remarks to outline a broad vision for his FCC chairmanship, a vision that is rooted in what he calls the “Network Compact.” He explains that this compact is guided by longstanding principles that have underscored our communications policy over the past century—principles he identifies as “access, interconnection, and the encouragement and enablement of the public-purpose benefits of our networks (including public safety and national security).”
So far, so good. It is heartening to see an FCC chairman contemplate the future of regulatory intervention in the context of the historical principles. And in his remarks at Ohio State, Wheeler also indicates a concrete willingness to apply those principles as regulations in an Internet-driven world. He noted that, “[a]ssuring that the Internet exists … as a collection of open, interconnected entities is an appropriate activity for the people’s representatives.”
But things started to get rocky during the question-and-answer session following his prepared remarks. When pressed, he indicated support for a scenario that the FCC’s 2010 Open Internet rules are specifically designed to prevent, noting:
I think we’re also going to see a two-sided market where Netflix might say, ‘well, I’ll pay in order to make sure that you might receive, my subscriber receives, the best possible transmission of this movie.’ I think we want to let those kinds of things evolve. We want to observe what happens from that, and we want to make decisions accordingly, but I go back to the fact that the marketplace is where these decisions ought to be made, and the functionality of a competitive marketplace dictates the degree of regulation.
In short, he’s suggesting that high-priced express lanes on the information superhighway might be OK. For consumers, as well as for companies looking to get content to their customers through new, innovative applications or programs, this means another layer of costs added on top of an already complicated Internet market.
Wheeler has since clarified that answer, and he affirmed his commitment to the FCC’s Open Internet rules in a House Energy and Commerce oversight hearing. When asked about his perceived endorsement of these “two-sided market arrangements,” he explained that he is “a strong supporter of the Open Internet rules full stop,” then went on to note that the rules were designed to reach a balance between protecting consumers and stimulating innovation. The commission’s role, he noted, was to maintain balance between those two ideas. The goal, he suggested, was to make sure that new payment schemes do not interfere with access, are not anti-competitive, and do not provide preferential treatment. That’s somewhat reassuring.
However, it is difficult to not wonder whether those views expressed in the Q-and-A are not representative of his personal views on the subject. After all, Wheeler was once a top lobbyist for the cable industry. It would not be surprising for him to be sympathetic to cable’s aspirations to start charging Internet content companies directly to reach their subscribers.
It’s important, however, to understand the Open Internet rules in the context of the larger Internet ecosystem, because the concerns created by Wheeler’s statement extend beyond net neutrality. Most people think of the Internet as one monolithic network. Instead, as Wheeler himself points out, it’s a “collection of networks harnessed to a common purpose.” No one entity owns it all—content travels from one user to another thanks to a series of business arrangements, where companies agree to route your movie, book, or email from one network to another. Let’s take Netflix, for example. In order for Netflix to reach Internet subscribers in the United States, it pays Level 3, a content delivery network (CDN) and backbone provider, to host and transport its content. Level 3 then has agreements with Internet service providers like Comcast and others to reach their subscribers.
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