Broadband services

The End of the Road for Wheeler

The end of Chairman Tom Wheeler's term at the FCC is rapidly approaching, but that doesn't mean the agency chief is ready to go quietly. Far from it, in fact.

Among the major items that the chairman is still grappling with are his set-top proposal, new business data services rules and a broadband privacy framework that was introduced in March. Wheeler is expected to leave office once the White House changes hands early next year, but he still has significant hurdles to overcome if he wants to reach closure on those major items still on the FCC's agenda.

Unlock/ditch the box
The saga over set-tops drags on as Wheeler's latest apps-based proposal continues to draw criticism from all sides. While the proposal in many ways mimics a plan that was drawn up by service providers and programmers months ago -- a plan that calls for pay-TV operators to make their services available as apps on third-party devices -- industry folks are concerned about the Federal Communications Commission (FCC) 's decision to create a standardized licensing process for app distribution. (See FCC's New Pay-TV Plan: Shove It Up Your App.)

Wheeler can often count on his two fellow Democratic commissioners to back him on FCC proposals, but in this case, Commissioner Jessica Rosenworcel has expressed her own misgivings. According to a report by The Hill, Rosenworcel testified in front of a Senate oversight committee hearing yesterday that "I have some problems with licensing and the FCC getting a little bit too involved with the licensing scheme here. Because, when I look at the Communications Act and Section 629, I just don't think we have the authority."

Business data services
Back in the spring, the FCC voted to consider a proposal to re-regulate pricing of networks used for business data services, an area of the industry previously known as "special access." The proposed new rules, supported by all three Democratic Commissioners, call for imposing price controls on network access for businesses in regions where competition is limited. That's nothing new, but for the first time, the rules also call for regulation of not only incumbent telecom carriers, but new cable company entrants. (See FCC Poised to Re-Regulate Wholesale Access.)

The cable industry has been highly critical of the FCC rules from the get-go, but this week the National Cable & Telecommunications Association (NCTA) formally submitted its counter-proposal on the issue. The NCTA is calling for no-rate regulation of "competitive" providers (i.e. non-incumbents), and no regulation where "state-of-the-art Ethernet and fiber services" are being deployed.

For more fixed broadband market coverage and insights, check out our dedicated gigabit/broadband content channel here on Light Reading.

Increasing the stakes around the business data services issue is the fact that these access networks will play a crucial role in providing backhaul support for future 5G wireless networks. In a statement to the Senate oversight committee, Wheeler noted that, "Lack of competition doesn't just hurt the deployment of wireless networks today, it also threatens to delay the buildout of 5G networks with its demand for many, many more backhaul connections to many, many more antennas."

Broadband privacy
The topic of user privacy on broadband networks has come up in recent months because of the desire by service providers to charge subscribers an additional fee if they don't want their Internet usage patterns tracked for advertising purposes. AT&T Inc. (NYSE: T) started the practice with its pricing for gigabit services in 2014, and Comcast Corp. (Nasdaq: CMCSA, CMCSK) expressed its support for the model in a recent filing with the FCC.

ISPs argue that they should be able to track usage data in the same way that companies like Facebook and Google (Nasdaq: GOOG) do, and that discounts should be allowed for customers willing to trade their personal information.

The FCC, on the other hand, has put forth a proposal suggesting new rules that would require ISPs not only to provide more transparency around how customer data is used, but also to share customer data with "noncommunications-related affiliates or third parties" only on an opt-in basis. The FCC has also asked for comment from the public on whether ISPs should be allowed to charge more for not sharing customer data.

Unsurprisingly, the broadband privacy issue also came up at this week's Senate oversight committee meeting. In a statement, Committee Chairman Senator John Thune (R-S.D.) noted that the "The staff at the Federal Trade Commission called the FCC's privacy rules 'not optimal,' which is bureaucrat-speak for 'really bad.'"

Wheeler, however, said in his own statement that after reviewing public comments for the last six months, "I am confident we'll be able to arrive at final rules that are good for consumers and good for innovation later this year."

That's a lot of optimism, but it doesn't change the fact that consensus on all of the FCC's major issues will be difficult to achieve. And for Chairman Wheeler, there's not a lot of time left.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

Duh! 9/19/2016 | 11:05:49 AM
Re: Balance I was an admirer when he was appointed, and remained one when he became #NOTADINGO.  He's been a fine public servant, with the right balance of industry knowledge, pro-consumer activism and temperament. 

As I understand it, President Clinton (IFF elected), can appoint him for a second term.  Whether there would be cloture for his Senate confirmation vote is a different question.  I also wouldn't fault him if he decided to retire to a life of golf and grandkids. 

It would be sad to see him go.
KBode 9/19/2016 | 8:04:41 AM
Re: Balance I've generally been impressed by how he has handled himself. You never see him get vengeful or petty despite being kicked repeatedly by ISPs, consumers and Congress (all for, by most objective accounts, doing the right thing). Whether he's allowed to stick around will speak volumes of Clinton's plans for the telecom space. 
cnwedit 9/16/2016 | 5:16:28 PM
Re: Balance Brian,

You make a good point about people not really hearing Wheeler. And he gave them lots of chances, he spoke at so many industry events, he definitely didn't duck any invitations. 

It's another thing I liked about him.
inkstainedwretch 9/16/2016 | 2:03:57 PM
Balance Agree or disagee with any (or all) of his actions, Tom Wheeler consistently gave consumer considerations equal weight to industry demands, and that rankled many in the industry. Because he knew the industry inside and out, he was often able to distinguish between legitimate concerns and whining -- and telcos' and MSOs' whining can be as world-class as the performance of some of their networks.

Part of his problem wasn't really a problem he created. Even though he was a pretty straight shooter, the industry refused to believe what he said (I attended a few of his speeches where the audience didn't seem to even hear what he said), even when he followed words with deeds. I'm thinking about how he presided over the Comcast/TWC and Charter/TWC deals, here, but there are other examples. 

-- Brian Santo
cnwedit 9/16/2016 | 12:29:09 PM
Can Wheeler Make Any of This Happen? I admire a dedication to an agenda, and Tom Wheeler has been nothing if not transparent about his agenda and dedicated to getting it done. 

But I honestly can't see him succeeding on any of these three agendas, and I'm not sure the industry would be worse for the failure. 
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