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.
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."
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