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The Sound of One Hand Clapping

Reactions to the anticipated announcement of the FCC's plans to re-regulate broadband are exactly as expected - the question is what's next?

February 4, 2015

3 Min Read
The Sound of One Hand Clapping

As expected, FCC Chairman Tom Wheeler today announced he will lead the charge to re-regulate broadband service under the Title II rules that exist for phone lines.

In the process, Wheeler intends to lead the Federal Communications Commission (FCC) where it has never gone before -- into regulation of cable and mobile broadband lines as well as phone lines -- but is likely to be leading the agency right back into a federal court, where its last Net Neutrality effort was deemed improper.

The technicality on which that ruling was based is being addressed this time, but that doesn't mean the high-powered attorneys who work for the big telecom and cable players won't find other means on which to challenge anything the FCC passes.

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Reaction to Wheeler's announcement was entirely predictable. Consumer advocates, Congressional Democrats and many within the tech community are cheering. Republicans, the big broadband ISPs and their backers are crying foul.

There are two unknowns at this point: how Wall Street will react (not just today but in the months to come) and how the FCC will attempt to draw the "bright-line rules" that Wheeler is promising.

And that is the interesting part of what he said today, which you can read in its entirety here.

Wheeler is promising "the strongest open internet protections ever proposed by the FCC" which will "ban paid prioritization, and the blocking and throttling of lawful content and services." But he also claims to be able to encourage investment in broadband in the process, something else no FCC chairman bent on regulation could accomplish.

Figure 1: Does Tom Wheeler Still Feel Like Dancing? The FCC Chair is taking on the big boys in a bold move, but can he pull it off? The FCC Chair is taking on the big boys in a bold move, but can he pull it off?

To do this, Wheeler says he'll offer a modernized version of Title II, "tailoring it for the 21st century, in order to provide returns necessary to construct competitive networks."

According to him, this means "no rate regulation, no tariffs, no last-mile unbundling." This is the version of Title II that the wireless voice industry has grown up with, and that's good enough for Wheeler.

But it's not yet clear to me -- nor, based on what I read elsewhere, is it clear to many -- exactly what the chairman has in mind. I'm assuming part of the modernization of Title II will take into account network interconnection, content storage and distribution, since those issues factor heavily into the conflicts that triggered this latest round of Net Neutrality arguments -- namely, alleged delays of Netflix traffic.

Whatever Wheeler has in mind, it's just beginning to unfold and will face certain legal challenges once passed. That could mean broadband rules become part of the debate in the next presidential election -- not a bad thing, in my mind.

The downside of that period of debate, however, is the potential disruption of a market that was getting into the whole gigabit thing. Whether that happens lies in the hands of the investment community, which is not subject to pressure from TV pundits, consumer groups or even the Obama administration.

— Carol Wilson, Editor-at-Large, Light Reading

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