FCC chairman Tom Wheeler announced Thursday he will be leaving the commission Jan. 20, the FCC confirmed.

He could have stayed on as a commissioner after Jan. 20, but after inauguration day he would no longer be chairman.

“Serving as FCC chairman during this period of historic technological change has been the greatest honor of my professional life," said Wheeler. "I am deeply grateful to the President for giving me this opportunity. I am especially thankful to the talented Commission staff for their service and sacrifice during my tenure. Their achievements have contributed to a thriving communications sector, where robust investment and world-leading innovation continue to drive our economy and meaningful improvements in the lives of the American people. It has been a privilege to work with my fellow Commissioners to help protect consumers, strengthen public safety and cybersecurity, and ensure fast, fair and open networks for all Americans.”

At the FCC's Dec. 15 public meeting, where Wheeler was praised by his colleagues, he said that while he had submitted his resignation to the president today (Dec. 15),  he was simply keeping a commitment he has "repeatedly made" since March that he would hold with precedent that the chairman resigns regardless of how much time is left on his term and to cooperate with the wishes of a new Administration to ensure a smooth transition

Democratic commissioner Jessica Rosenworcel will be leaving at the end of the year, so the FCC will have a Republican majority, with commissioner Ajit Pai likely named interim chair after Wheeler's departure, though Michael O'Rielly is also in the conversation. Mignon Clyburn would be the lone Democrat.

"Like his beloved Ohio State Buckeyes, chairman Wheeler brought passion and tenacity to the playing field each and every day," said Pai. "Despite our differences in many areas of communications policy, I commend him for his years of public service. It has been a privilege to serve alongside him, and I wish him well in his future endeavors."

Wheeler joined the commission Nov. 4, 2013. And while he drew some raised eyebrows from public interest groups given his background as a lobbyist for the cable and wreless industries, he played no favorites in either of those camps, though some said Google and edge providers got the better end of the regulatory deal.

Wheeler's mantra was competition, competition, competition, and arguably his highest-profile action the reclassification of ISPs as Title II common carriers, though that is likely to be undone under a Republican Administration.

He was getting immediate warm fuzzies from public interest lawyers and groups.

"Tom Wheeler has been -- by far -- the best FCC chairman in the 45 years I have practiced communications law," said veteran public interest attorney Andrew Schwartzman. "He has been willing to take risks and expend political capital to advance his agenda.  And, unlike some predecessors, he hasn’t been afraid to confront Congress and powerful business interests when they stood in the way.  I look forward to working with him in the fight to preserve and expand upon his legacy."

"When FCC chairman Tom Wheeler departs the FCC on Jan. 20, 2017, he leaves a rich legacy of Internet safeguards designed to empower and protect average Americans," said Jeff Chester, executive director of the Center for Digital Democracy. "From network neutrality that helps ensure there are no online gatekeepers, to rules on privacy that protect the information of consumers and families, the Internet in the U.S. is a fairer and safer place due to Tom Wheeler.  A crucial test for the Trump White House will be whether it preserves these important decisions designed to help everyday Americans.  Or will the new Administration trade away American digital rights to help the super-rich and powerful phone, cable and Internet companies?  Tom Wheeler has placed his mark on the country’s broadband future, and we believe it’s worth fighting to preserve."

The  Media Mobilizing Project was equally laudatory.

"When Federal Communications Commission chairman Tom Wheeler came to Philadelphia in the fall of 2014, he heard from low-income leaders in communities of color, struggling libraries and schools, people with disabilities, and community broadcasters on how important it was to protect the internet as a common medium for our right to communicate," said policy director Hannah Sassman.   

"Chairman Wheeler should be roundly praised for respecting their voices, and those he heard in cities and towns nationwide; and for taking their leadership and the leadership of millions of everyday American residents in his historic push to protect net neutrality, and protect the internet as a human right."

According to multiple sources, FCC Chairman Tom Wheeler's apps-based set-top box/navigation device proposal is getting a major tweak to get programmers on board.

While the proposal was to have had the FCC backstop an app licensing body to make sure agreements were reasonable and not anti-competitive, industry sources said Wednesday the FCC will no longer have that explicit oversight role and, instead, would review the app standards process after a couple of years and step in then, if necessary.

For the Hollywood studios, having the FCC potentially change the terms of contracts is a nonstarter, as it was for various Hill Democrats, especially on the Justice committees that deal with copyright.

The item is still in flux, said an FCC source, but it was moving toward that major adjustment.

FCC Chairman Tom Wheeler signaled two weeks ago there would be further stakeholder talks and that he was willing to tweak his proposal to address concerns about the licensing body and copyright .

FCC Commissioner Jessica Rosenworcel has had issues with the FCC's role in the licensing body and copyrights, as well, so that could be a way to secure her vote, which is crucial to approving the proposal.

Wheeler has maintained his plan would not have affected contracts or created a compulsory license, but critics were not convinced given the language in the chairman's proposal about the FCC serving "as a backstop to ensure that nothing in the standard license will harm the marketplace for competitive devices."

Wheeler was urged by by many to delay the vote or seek comment on his proposal, which was a major pivot from his original "unlock the box" plan. But the FCC is still scheduled to vote on the proposal Thursday (Sept. 29), in what will likely be a marathon meeting given the full agenda, which includes, among other things, a programming diversity notice of proposed rulemaking (NPRM) and an order streamlining broadcast purchases with foreign investment.

FCC chairman Tom Wheeler made it clear that what he likes most about the National Cable & Telecommunications Association's "ditch the box" set-top proposal was that MVPDs and programmers were at least talking about finding common ground.

In a press conference following the FCC's monthly meeting Thursday (July 15), Wheeler did not talk much about the proposal itself, declining to elaborate on what more he wanted MVPDs to explain about the proposal--though the FCC has signaled a bunch of issues in questions staffers submitted to those MVPDs, as Multichannel News/B&C reported last week.

Instead, the chairman highlighted the fact that they were finally talking.

"I am grateful to the industry that they accepted my invitation," he said. "I have been saying for weeks if not months: 'Let's sit down and talk...and it was being met with a stiff arm."

He said that the discussions he has since been having with MVPDs and programmers (and consumers) were all important. "So, I am very happy about the kind of ongoing dialogue that is occurring around this issue because it wasn't occurring previously."

Wheeler said set-top box leasing was a rigged system, and that whatever the answer, it needed to give consumers meaningful choice while protecting copyright, and contracts and privacy and security.

"We are in discussions to find out where we can have an accord," he said. "I think that is a responsible and meaningful thing to do."

In responses to letters from Capitol Hill Dems--and one high-profile independent--raising concerns about unauthorized charges on cable and broadband bills, FCC Chairman Tom Wheeler put in a plug for his set-top box proposal.

The FCC has released Wheeler's response to independent and Democratic presidential candidate Bernie Sanders and a trio of Senate Democrats on the issue in which he talks about Open Internet enhanced transparency rules and said the FCC does not have a way of determining how many folks have been charged unauthorized fees.

But he also notes his proposal to unbundle the programming streams of cable set-top boxes. That is because the proposal includes associated "robust billing transparency" requirements that would extend to cable modems.

The FCC is proposing to require MVPDs to separate out the charge for leasing equipment currently bundled into the price of service.

The FCC cited that proposal in not putting a modem fee-line item condition on the Charter/TWC deal and similar requests in other proceedings, saying it was more appropriately dealt with in the broader set-top proposal.

He said that will not solve all the legislators' concerns about cable and broadband bill transparency, but he says will give consumers a tool to ferret out error or unauthorized charges.

Wheeler could use some more selling points for his set-top (or navigation device) proposal given the pushback he has gotten from a number of Hill Democrats, as well as Republicans and ISPs and some minority groups and others.

The senators seeking the info included Al Franken of Minnesota, Elizabeth Warren of Massachusetts and Jeff Merkley of Oregon.

FCC chairman Tom Wheeler says the White House did not give him "secret instructions" to reclassify Internet access under Title II, and that he felt no obligation to follow the President's lead.

But Wheeler says that, "or course" the President's statement had an impact on the decision -- it prompted more public input into the collective record, which Wheeler took into account in the "evolution" of his position. Then, there was the fact that the capital markets did not tank on the President's announcement.

That is according to his written testimony for a hearing today in the House Oversight & Government Reform Committee's on the commission's relationship with the White House in the run-up to the Feb. 26 vote on Title II. The President last fall came out strongly and publicly for Title II and the chairman appeared to follow that lead.

Wheeler says his initial proposal not to reclassify Internet access as a telecommunications service under Title II regulations was a specific, but tentative, proposal, that was meant to focus the debate, not foreclose it.

"There were no secret instructions from the White House," Wheeler says. "I did not, as CEO of an independent agency, feel obligated to follow the President’s recommendation.  But I did feel obligated to treat it with respect just as I have with the input I received – both pro and con - from 140 Senators and Representatives."

As to initially proposing using Sec. 706 authority, the same authority it uses to justify regulations on broadband deployment and access, Wheeler says: "While historically, some NPRMs just asked questions, during my chairmanship I have made it a policy to present draft NPRMs to my colleagues that contain specific proposals as a means to flag key concepts for commenters’ attention. I believe this is an important part of an open and transparent rulemaking process. But let’s be clear, the proposal is tentative, not a final conclusion, and the purpose of the comment period is to fully test the concept. In this instance, as in others, it worked as desired to focus the debate."

"A key consideration throughout this deliberation was the potential impact of any regulation on the capital formation necessary for the construction of broadband infrastructure," Wheeler says, which was where the President's position did have an impact on the outcome, he said. "An interesting result of the President’s statement was the absence of a reaction from the capital markets. When you talk about the impact of the President’s statement, this was an important data point, resulting, I believe, from the President’s position against rate regulation."

Wheeler has consistently said the FCC would not exercise its Title II rate regulation authority, but critics point to language in the order that suggests it could change that tune down the line, or that case-by-case analysis of business plans could result in de facto rate regulation.

Wheeler invokes the over-4 million comments the FCC got in the network neutrality docket, who he said had overwhelmingly spoken in favor of "preserving and open Internet," though to be fair most of those who opposed Title II also said they supported a free and open Internet, just not the way Title II reclassification attempted to achieve it.

Wheeler suggests that Title II is the result of a process in which the FCC listened, learned and "adjusted" its proposal along the way.

 Rep. Greg Walden (R-Ore.) has said that adjustment came fairly late in the game, with the chairman still signaling it was going to be Sec. 706 in November. The White House posted a video Nov. 10 urging the FCC to adopt Title II-based regs. Wheeler said Tuesday he has checked his notes on the meeting with Walden and they tell a different story.

Wheeler says that other "data points" that helped point him toward Title II included "the recognition of interconnection as an important issue," a topic he notes was not part of the Administration's position. He also says the AWS-3 bidding signaled that mobile investment continued to "flourish" in the fact of the commission's likely inclusion of mobile broadband under the rules for the first time--which the FCC did vote to do.

House Communications Subcommittee Chairman Greg Walden (R-Ore.) picked up Monday where he left off Friday, criticizing the FCC's Feb. 26 vote to reclassify Internet access providers under Title II regulation as common carriers and saying Federal Communications chairman Tom Wheeler was still not talking about taking that step last November, or at least not to him.

At a speech to the American Enterprise Institute in Washington on March 2, Walden said the FCC had stepped "well beyond its authority" in  "recasting the Internet as a public utility and supplanting the decisions of state and local elected officials whether to invest tax dollars in broadband with the FCC’s

central economic planning." The "central planning" reference was to the FCC's decision, on the same day, to preempt state laws limiting municipal broadband buildouts in Tennessee and North Carolina.

That is according to a prepared text supplied by Walden's office.

As to the timing of the chairman's pivot away from his non-reclassification, Sec. 706 approach, Walden said "I met with Chairman Wheeler late last November. I reiterated congressional Republicans’ concerns with Title II and with regulating the most successful economic and regulatory

experiment in U.S. history. And in that meeting, Chairman Wheeler assured me that he was committed to net neutrality without reclassification of broadband. This stands in stark contrast to press reports of Chairman Wheeler’s “summer epiphany” and decision to impose net neutrality through reclassification as a telecommunications service. I would say that this action was curiously timed just after President Obama announced his support for Title II (Nov. 10).

Walden raised the timing issue in an interview Friday for C-SPAN's Communicators, but said only that the chairman had talked about light-touch regs. In Monday's speech he made clear that he was saying Wheeler indicated as late as November he was not going the Title II route.

Wheeler was out of the country Monday and unavailable for comment.  President Obama urged Wheeler to impose Title II, but the chairman has said it was always on the table and said last week after the vote that he came to the Title II conclusion independently and based on the record in the proceeding. That record included 4 million comments both for and against reclassification.

A national survey released last week revealed that most Americans don’t have a clue what “net neutrality” means.

If true (and it is, even among TV executives) that doesn’t bode well for smooth assimilation into the regulatory construct of new FCC rules governing the Internet.

The phone survey by Hart Research Associates, with 800 adults 18 and over, echoes what I’ve gleaned talking to TV executives: Nearly three out of four (74%) Americans are unfamiliar with the term “net neutrality” and what it actually means.

In its simplest form, “net neutrality” means that cable and phone companies, which own the main plumbing of the Internet, should not block content or discriminate and should manage their networks transparently.

Beyond that, anyone trying to describe it to a lay person will see listeners zone out within seconds, typically accompanied by a nictitating membrane covering the eyes and slow, polite nods.

Now, the debate has evolved into a such a confusing cacophony of strident free-speech declarations and network- management business-speak that it’s little wonder most consumers are stumped. The term itself has been intentionally co-opted by giant corporations on both sides of the debate to the point where it means whatever its supporters want it to mean — which would require a mind reader with a law degree to divine, and maybe not even then.

That explains, in part, why 73% of Americans want greater disclosure of the details of the FCC’s proposal to regulate the Internet. FCC chairman Tom Wheeler has proposed regulating the Internet like a utility under Title II of the Communications Act to ensure his — and President Obama’s — vision of net neutrality.

But only one in three Americans, the survey found, thinks that regulating the Internet like telephone service will be helpful. It’s a fact that belies the confusion: Big free-speech fans — some of the very “Save the Internet!” viewers roused by comedian John Oliver’s acerbically funny dissection of Big Cable on his HBO series Last Week Tonight — really don’t trust big government to do the job either.

Is broadband so essential that the government should be more active in regulating a flourishing, privately capitalized Internet?

Wheeler seems to think that is just the role the FCC needs, given his view of ISPs as the potentially competition-crushing link in the virtuous cycle of edge to net to consumer.

He may not feel it is appropriate to make details of the new rules public before the coming vote, but he should do so afterward, and ASAP.

Just in time for the Spring Bloviating Season, the FCC hath wrought a fomenting cauldron from which will spew immeasurable  volumes of verbosity, accompanied by dizzying infographics and data points, most of which will include more non sequiturs and mixed metaphors than this sentence.  And will the forthcoming sturm und drang ultimately change anyone's opinions or policies?

Unlikely.

Clearly lawyers, lobbyists and policy analysts are salivating over the billable hours ahead, developing new ways to say and show that the FCC's Title II proposals are (1) vital to our national well being, (2) the doom of our future freedoms, (3) too important to trust to five political appointees, (4) unforbearancely expensive or (5) something else they contrive as relevant to this "conversation."  

Speeches  will be made, comments and reply comments will be submitted, conference panels will be devoted to the Open Internet.  And confusion and angst will continue to reign. 

But will anyone's mind be changed? 

Or does it all come down to, for now, the vote of one FCC Democratic  commissioner who may not agree with her Chairman?  And what parts of this matters? As Chairman Wheeler has telegraphed, the upcoming FCC deliberations on Title II are being structured as a prelude to the inevitable Congressional and court challenges ahead.

OK, democracy can be an ugly, ungainly process, especially when volatile topics such as free speech and billions of dollars are at stake.  And there's always the hope that the upcoming process will birth some useful compromise that keep all parties satisfied - or at least, comparably unhappy.

As if.

The history of such dramatic telecom policy scuffles on the public stage does not bode well.  Memories turn to 2002's "Internet Freedom and Broadband Deployment Act (H.R. 1542)," better known as the Tauzin-Dingell Bill in honor of its bipartisan (sort of) sponsors. 

We also recall Senate Commerce Committee Chairman Fritz Hollings' denunciation of the House proposal and his preference for his own "Broadband Telecommunications Act" (which had a different cast of political backers).  The promotional campaigns filled

Washington's airwaves with incessant advocacy ads that totally confused almost all listeners, even the targeted congressional staffs. And ultimately, Congress let the whole thing die.

Although advocacy campaigns  (such as the NCTA-backed Broadband for America) are already underway, we can only hope that public display of animosity does reach the levels of that decade-ago deluge.  Or maybe it's more fitting than ever in today's ecosystem for an arcane industry dispute to be the cause du jour - until something more visible (and understandable) comes along.

In parts of our community, the leisure of the theory class is to write and refute sage reports about social and economic impact of policy decision.  I eagerly await the hired economists' next round of authoritative interpolations of data, proving the disastrous impact of the "wrong" policy decision.  We can write the scripts today and let them fill in the numbers later.  

None of this skepticism suggests that the deliberative process is unworthy.  But in this particular case, the long, long debate seems particularly odious.  And in today's political climate, the likelihood of turning votes - or even redirecting anyone's viewpoints - seems frustratingly unlikely.  

The FCC has frequently faced such frustrating issues, often fueled by orchestrated  and downright Astroturf inputs from the "public," akin to most of the four million comments in the ramp-up to the current Title II rulemaking.  Over the years, there have been similar brouhahas about  broadcast indecency, sports blackouts, media  ownership and dozens of other topics.  As a legal historian pal points out, there was even an onslaught of opposition to the FCC's "plan to ban" all religious broadcasts. Although no such policy was ever under consideration, an urban myth evolved and there were calls from pulpits around the country urging the faithful to bombard the FCC with letters, postcards and calls (yes, it was a while ago) urging that no such policy be implemented.

Ah, the uninformed have such great incentives to shout out their preferences.

The TOPSY analytics tally of "Net Neutrality" Tweets spiking to 20,000 on Tuesday - attests to the fleeting attention that sufficient hype can generate.

So let the "conversation" begin.  Some of us are bored even before it begins. Very few minds will be changed by the coming deluge of fancy words and charged rhetoric.  And none of it is likely to be as influential as the four words that helped create the foundations of this business.  They're a Biblical phrase (from Numbers 23:23)  that  telecom historian Tom Wheeler knows well in their context as the dots and dashes that opened the first Baltimore-to-Washington telegraph line on May 24, 1844: "What hath God wrought."

So let's see what the FCC doth wrought in the coming months.  And what the millions of lobbying dollar does to inform and enlighten the policymakers who actually vote.

Wednesday may have featured some kind of record for reactions to an event that has not happened yet.

The event was the President's speech later today on the need for high-speed broadband and what he and his administration planned to do about it.

The reaction was coming because, unlike in past years where the President's State of the Union address themes only trickle out an hour or two before speech time--this year on Jan. 20--the White House decided to preview those themes and initiatives to journalists, then the public, beforehand, as he also did with cybersecurity. The President plans to outline his already outlined plan in a speech in Cedar Falls, Iowa, where the public utility has built out high-speed broadband at speeds rivaling world capitals, the White House has pointed out.

FCC commissioner Ajit Pai was not enthused by the President's signal to FCC chairman Tom Wheeler that he supports preemption of state laws limiting municipal broadband, particularly given that he thinks the FCC lacks the authority to use it.

"As an independent agency, the FCC must make its decisions based on the law, not political convenience," said Pai in a statement. "And U.S. Supreme Court precedent makes clear that the Commission has no authority to preempt state restrictions on municipal broadband projects. The FCC instead should focus on removing regulatory barriers to broadband deployment by the private sector."

National Cable & Telecommunications Association president Michael Powell said of the President's upcoming but telegraphed speech: "America's decades-long policy of promoting private investment and exercising a light regulatory touch has yielded substantial benefits for American consumers.  As evidence, cable's top broadband speeds have increased over 3200 percent in a decade, Akamai recently reported that 12 American states are among the 20 fastest regions of the world and our markets remain the envy of the world.  While government run networks may be appropriate in rare cases, many such enterprises have ended up in failure, saddling taxpayers with significant long-term financial liabilities and diverting scarce resources from other pressing local needs."

Powell said broadband would clearly play a central role in the fabric of society, but, "rather than chase false solutions, government policies should be directed at overcoming barriers to adoption and extending the reach of broadband to places yet unserved. We welcome sensible government policies that will build on our successes and convince even more Americans to take advantage of the broadband opportunity."

Rep. Doris Matsui (D-Calif.), a member of the House Communications Subcommittee, was all for the President's high-speed initiative.

"I applaud the President's initiative to expand affordable, high-speed broadband to more communities across the nation," she said.  This initiative will spur competition and provide communities with more choices in the broadband economy.  It is an important step toward ensuring all Americans - whether in an urban or rural community - have the opportunity to engage in the digital economy.  I look forward to working with the Administration and the FCC, which has been active on this issue, in support of efforts to expand broadband access to every corner of our country."

Rep. Deb Fisher (R-Neb.) was not similarly feeling the broadband love, branding the President's support for municipal broadband as nationalizing the Internet. ""Each day we see more policies coming out of this White House that attempt to wield greater power and control for the federal government," she said. "This afternoon, we will see the president parachute into Iowa and tout a new federal takeover of state laws governing broadband and the Internet."

""Ubiquitous broadband deployment empowers consumers, strengthens communities and provides economic opportunity for the innovative companies that drive our ICT sector," said the Telecommunications Industry Association. "TIA has long supported this goal, and we applaud President Obama's initiative. A critical step forward is to remove regulatory barriers that prevent or discourage private sector investment in new broadband facilities. At the same time, we encourage a collaboration with local governments, and additional public efforts can and should work to supplement private sector investments. TIA believes that state and local governments should be free to identify those broadband needs that are best met through some form of governmental action or partnership with the private sector."

The White House Tuesday outlined President Obama's proposals to boost access to "affordable high-speed broadband for all Americans, which will include calling on the FCC to "end laws that harm broadband service competition." It was a preview of one of the President's State of the Union initiatives, and the Administration made clear that the state of broadband was not fast enough.

That is according to Jeff Zients, director of the National Economic Council, and Andy Berke, Mayor of Chattanooga, Tenn., who were on a call with reporters previewing the Presidents plans, to be outlined in a speech Wednesday and later in the Jan. 20 State of the Union.

Zients stopped short of saying the President was supporting FCC preemption of state laws limiting municipal broadband, something FCC

Chairman Tom Wheeler has suggested the FCC should do, but Chattanooga is one of a pair of cities (Wilson, N.C., is the other) that has asked the FCC to preempt state regulations limiting municipal broadband buildouts, which cities argue are one way to deliver affordable broadband. A fact sheet from the White House seemed to make clear that the President was providing Wheeler backup for preemption efforts, just as the President offered support and encouragement for Title II reclassification of broadband.

"Laws in 19 states — some specifically written by special interests trying to stifle new competitors — have held back broadband access and, with it, economic opportunity," the White House said. "President Obama is announcing a new effort to support local choice in broadband, formally opposing measures that limit the range of options available to communities to spur expanded local broadband infrastructure, including ownership of networks. As a first step, the Administration is filing a letter with the Federal Communications Commission (FCC) urging it to join this effort by addressing barriers inhibiting local communities from responding to the broadband needs of their citizens."

He made clear the Administration thinks there is not enough competition for high speed broadband. "Broadband matters, but a lot of us have a commonly frustrating experience," said Zients on a call with reporters. "Even when we are unhappy with the speed and performance of our Internet service, we don't have a choice. There are no alternative providers we can switch to. Three out of four Americans live in a location that has no competition or service at the broadband speeds increasingly required for many online services."

FCC Chairman Tom Wheeler has already signaled that 25 Mbps is the new table stakes, and the White House also seemed to be signaling that underserved areas would be defined by speed, not just whether or not there was service.

Zients said the lack of broadband was rarely a lack of demand, but more often the cost of infrastructure, and "a combination of laws that rpevent communities from providing incentives." He said Americans want and need better and faster broadband.

Also part of the President's plan to get higher-speed broadband to everyone:

"Expanding the National Movement of Local Leaders for Better Broadband: As of today, 50 cities representing over 20 million Americans have joined the Next Century Cities coalition, a nonpartisan network pledging to bring fast, community-supported broadband to their towns and cities. They join 37 research universities around the country that formed the Gig.U partnership to bring fast broadband to communities around their campuses. To recognize these remarkable individuals and the partnerships they have built, in June 2015 the White House will host a Community Broadband Summit of mayors and county commissioners from around the nation who are joining this movement for broadband solutions and economic revitalization. These efforts will also build on the US Ignite partnership, launched by White House in 2012, and which has grown to include more than 65 research universities and 35 cities in developing new next-generation gigabit applications.

"Announcing a New Initiative to Support Community Broadband Projects: To advance this important work, the Department of Commerce is launching a new initiative, BroadbandUSA, to promote broadband deployment and adoption. Building on expertise gained from overseeing the $4.7 billion Broadband Technology Opportunities Program funded through the Recovery Act, BroadbandUSA will offer online and in-person technical assistance to communities; host a series of regional workshops around the country; and publish guides and tools that provide communities with proven solutions to address problems in broadband infrastructure planning, financing, construction, and operations across many types of business models.

"Unveiling New Grant and Loan Opportunities for Rural Providers: The Department of Agriculture is accepting applications to its Community Connect broadband grant program and will reopen a revamped broadband loan program, which offers financing to eligible rural carriers that invest in bringing high-speed broadband to unserved and under served rural areas.

"Removing Regulatory Barriers and Improving Investment Incentives: The President is calling for the Federal Government to remove all unnecessary regulatory and policy barriers to broadband build-out and competition, and is establishing a new Broadband Opportunity Council of over a dozen government agencies with the singular goal of speeding up broadband deployment and promoting adoptions for our citizens. The Council will also solicit public comment on unnecessary regulatory barriers and opportunities to promote greater coordination with the aim of addressing those within its scope.

The White House briefing was a preview of the President's visit to Cedar Falls, Iowa, where he will talk about his high-speed broadband agenda in advance of the State of the Union (SOTU) (http://www.broadcastingcable.com/news/washington/president-promote-broad...). Broadband deployment has been a feature of previous SOTU's

Last year, for example, the President announced that the FCC and some major telecoms and edge providers were getting together to help connect 15,000 schools to high-speed broadband (http://www.broadcastingcable.com/news/washington/president-announces-new...). In 2012, the President said one of the nation's construction challenges was an "incomplete high-speed broadband network" that prevented some small businesses from reaching world markets. (http://www.broadcastingcable.com/news/news-articles/president-cites-inco...

In the 2011 SOTU, the President announced the National Wireless Initiative and pledged that "within the next five years, we will make it possible for business to deploy the next generation of high-speed wireless coverage to 98% of all Americans. This isn't just about a faster Internet and fewer dropped calls," he said at the time. "It's about connecting every part of America to the digital age."

The National Cable & Telecommunications Association blogged about the President's anticipated initiatives before the White House call.

Saying the reports of his Iowa visit seemed "like a good opportunity for us to take stock of the current state of broadband and how we might connect more Americans to fast broadband networks. Over the last two decades, America’s cable providers have invested over $230 billion to extend and upgrade fast broadband connections to  communities large and small, urban and rural, in all corners of America. In just the last decade, the average cable broadband customer has  seen top speeds increase a whopping 3200%..."

"Cable’s pace of technological progress shows no signs of abating," NCTA said. It did identify two areas where government could help, and one where it could hurt.

"While the cable industry continues to deliver on faster broadband at declining per-Megabit prices for Americans consumers, we know that that there are two discrete areas that may warrant targeted government attention," NCTA said. "First, for some very rural areas, private economic incentives may not be sufficient to justify network investments. In such areas, government incentives can play a constructive role in promoting universal service. Second, we know that for some Americans, the availability of broadband infrastructure is insufficient to spur adoption. The cable industry is committed to closing this digital divide by educating consumers about the benefits of broadband and by offering programs to help families overcome barriers they may face, including discounted service. You can learn more about those programs on our Closing the Digital Divide page."

But where the government could hurt was in the Title II arena, NCTA said.

"Instead of building on policies that have helped spur private investment, President Obama’s call to reclassify broadband as a Title II telecommunications service threatens to raise the cost of capital associated with network investment and slow continued progress in building faster and better broadband. Given the FCC’s ability to restore net neutrality rules without taking such extreme action, Title II appears particularly misguided."

Zients was asked about the impact of Title II. He said the Administration did not think it would have an adverse impact.

“I welcome the President’s focus on deploying high-speed broadband and improving competition in communities across America, particularly in rural areas," said Sen. Patrick Leahy (D-Vt.).  "Broadband is long past the point of being a luxury – it is a necessity, and the gap between urban and rural America is not closing nearly fast enough.  The lack of adequate choices for consumers is also one of the main reasons why the FCC must act swiftly to protect an open Internet.  I stand ready to work with the President and other Members of Congress to enact policies that will ensure that all Americans, whether they live in rural or urban areas, have access to fast and affordable broadband.”

FCC chairman Tom Wheeler outlined his approach for establishing new rules for the “Open Internet” by suggesting he would use Title II, but in a relatively limited way, to ensure there would be “no blocking, no throttling and no paid prioritization.”

Wheeler made the comments at an annual Q&A with Consumer Electronics Association president and CEO Gary Shapiro during the 2015 CES convention on Jan. 7.

Wheeler also said that the FCC expects to send the proposed rules to FCC commissioners Feb. 5 and that the Commission will vote on them on Feb. 26. Commissioner Jessica Rosenworcel said Wednesday she was looking forward to seeing the chairman's proposal.

Shapiro pressed Wheeler in a congenial, often humorous fashion during the 50-minute Q&A for details on the plan, but the FCC chairman stuck to broader policy issues and the philosophy behind his approach saying, “You’ll have to wait until February for the details.”

Wheeler stressed that he was involved many years ago in creating the rules for the wireless industry that regulated them under 322 section of Title II but exempted them from other sections, such as the need to get approval for rate changes. He seemed suggested a similar approach would work for the Open Internet rules. “There is a way to do Title II right that says there are many parts of Title II that are inappropriate and [wrong] for investments.”

This approach, he argued, had allowed the wireless industry to grow into a hugely successful enterprise for both companies and consumers. Opponents of Title II point out that Title II wireless regime was applied to phone service, not broadband.

Whether or not to regulate Internet under Title II has been a matter of considerable debate, with ISP's generally opposing the idea, though Wheeler said that some smaller ISPs had told him they supported it. Last year, President Obama came out strongly in favor of Title II and suggested the FCC should do so, too.

During the session, Wheeler vigorously denied reports that he and the President were at odds over the issue. “The president and I are both pulling towards the same [place]: no blocking.”

Overall, he stressed that the policy “was to ensure that innovators and consumers have open access to networks” so that there is “sufficient incentive for ISPs to build better networks.”

He did joke, however, about criticism of his net neutrality policy from comedian John Oliver and noted that he’d received a Christmas gift from his daughter related to the issue. She gave him a framed collection of pictures of him playing with his grandchildren. The caption on the frame read: “Would you let your kids play with a dingo?”

When asked about Dish’s plans to offer a package of cable channels over the internet, Wheeler replied that “it is symbolic of everything that is going on. Video used to be defined by the network that delivered it. The new technologies have changed video so it can be distributed over [any] network and device. But the rights to that product still [pose] impediments, which is why we are beginning rule making so that over-the-top can be defined as an MVPD so they can have access to programming the way satellite providers have.”

Wheeler also added that “this is why the whole open internet is so damn important because you have to have access to pathways.”

In terms of the broadcast spectrum auctions, Wheeler said that they were still on course “to have an auction in early 2016.” And as argument for why Title II reclassification would not be the investment and innovation chiller some ISP’s have told him it would be, he cited the AWS-3 auction and the record bidding for that spectrum even after the President weighed in calling for Title II.

“It is disappointing that broadcasters have brought suit to slow things down, but hopefully that will be argued in March and decided in May or June…so that we are in a position to go forward with the final rules.” He has targeted the incentive auction for early 2016.

This piece includes additional reporting by John Eggerton.

In the week since President Obama's unexpected "Title II" video debuted, plenty of Washington verbiage has been spilled on what happens next - and why.

The White House recommendation that the FCC should place public utility regulation upon Internet Service Providers rankled countless insiders and, of course, totally confused "civilians" - the unwashed masses who merely rely on the Internet for all kinds of business, consumer, financial and entertainment services.

By fortunate coincidence, several D.C. think tanks had already scheduled broadband seminars for the week, some timed as follow-up analyses to the recent Congressional elections, others keyed specifically to the evolving debate about Title II regulation.  Obama's screed merely inserted an added dimension into the predictable, politically-fueled pronouncement that emerge from these think-tank symposia.

What did not emerge from these seminars or from Obama's appeal was any comprehensive approach to the big issue confronting policy-makers: an omnibus overhaul of the nation's communications law, the elusive "Telecommunications Act Reform" process on Capitol Hill.

Indeed, last week's Kabuki maneuvering and posturing about the FCC and Title II was a good way to distract attention from a really big topic - policy overhaul - and focus instead on the pretty-big topic du jour - Internet regulation. To be fair, some of the Washington events touched on copyright reform (which might include retransmission consent), media mergers, Internet tax issues (some of which require immediate action) and spectrum allocation.

Collectively, these interconnected issues cry out for integrated analysis and action. Realistically, the new Congress is unlikely to tackle such a massive undertaking - especially when brush fires such as Title II can both distract attention and simultaneously attract so much lobbying support  (i.e. contributions).

Inevitably, at last week's seminars, there was substantial debate about the merits of "Section 706" (the part of the 1996 Telecom Act that lets the FCC oversee "Advanced Telecommunications Capabilities") versus Title II regulation.   For example, at Friday's Free State Foundation session entitled "Thinking the Unthinkable" (i.e. the 'utility model" regulation) Rep. Bob Latta (R-Ohio), who sits on the House Communications Subcommittee, and the two Republican members of the FCC blasted the "unthinkable" idea of Title II regulation.

FCC commissioners Ajit Pai and Michael O'Rielly(pictured left and right) both pointed to two significant ripple effects of imposing Title II regulation on ISPs: putting onerous Universal Service Fund fees on ISP usage and sending a bad message about America's Internet stance to foreign authorities. The USF issue would have more immediate impact on cable operators and other ISPs since customers would see substantial fees directly in each month's bill. 

Pai and others are even more concerned about any policy that would embolden foreign governments, especially repressive regimes, to impose Internet regulation of all sorts on their domestic system operators. Pai warned that if the FCC adopts a restrictive Title II policy, it would further diminish America's credibility and tell other nations to "do as we say not as we do."

In addition, there are immediate problems, such as how a unilateral U.S. regulation policy will affect international treaties for dealing with transborder communications, an issue with vast consequences in the Internet Protocol era.

In separate remarks at the Free State Foundation event, O'Rielly focused on forebearance, the process by which the FCC could carve out exemptions from its most severe policies.   But  as O'Rielly said, it "should not  be conceived as easy"  and there has been no indication about which parts of Title II might receive such forebearance.

Last week's seminars served as reminders about the complexity of the individual issues and the inevitable frustrations triggered by such piecemeal action rather than a comprehensive process, such as a Communications Act overhaul.

Going down either road will take a lot of time, and as the recent policy-wonk omphaloskepsis reminds us: there is unending contemplation ahead.  Bringing it all into a bleak perspective were the concluding comments at the FSF seminar.

It's a "regulatory rat hole," said Gerald Faulhaber in an abject summary of the FCC's current options.  Faulhaber, a former FCC chief economist and now professor emeritus at the University of Pennsylvania's Wharton School, characterized the choices:

"The only difference between Title II and Section 706 is how fast we go down the rat hole."

Cable stocks took a pounding in the hours after news broke that President Obama favored Title II regulation for multichannel video programming distributors, with Comcast and Time Warner Cable taking the biggest hits.

President Obama’s message that he would prefer the Federal Communications Commission reclassify MVPDs under Title II regulation (which would treat them like common telecommunications carriers) came just days after FCC Chairman Tom Wheeler proposed a hybrid approach, which would regulate edge providers’ access to individual subscribers via Internet service providers as a one-to-one telecommunications service under Title II, but regulate subscribers’ access to all those edge providers and services via their ISP as an information service under Section 706.

MVPDs have warned that a move toward Title II would stifle investment in the broadband infrastructure.

Comcast and Time Warner Cable, currently awaiting FCC approval for their pending $69 billion merger, understandably took a big hit, with TWC shares dropping as much as 7.2% ($10.34 per share) to $133.26 each in early trading Monday. By the early afternoon, TWC had regained some of that ground and closed at $136.50, down $7.10 each or 5% per share. Comcast shares fared slightly better – they were down as much as 6.1% ($3.36 each) to $51.79 before clawing back to close at $52.95 per share (down 4% or $2.20 per share).

Charter Communications stock also fell on the news, falling as low as $145.68 (down $10.69, or 6.8% each) in early trading, but regaining ground to close at $146.62 each (down $9.75 each or 6.2%) later in the day.

Liberty Broadband, the tracking stock created by Liberty Media Nov. 4 that includes its 26%  interest in Charter, also took a beating, dropping as much as 6% ($2.95 each) to $46.57 per share, before closing at $46.73 each, down 5.6%, or $2.79 per share. 

Cablevision Systems stock was hit the least, down as much as 60 cents each (3.2%) to $18.32 per share earlier in the day. The stock closed at $18.60 per dshare down 32 cents, or  about 1.7% each.

Analyst were puzzled at the President’s stance, especially since it came so soon after Wheeler’s call for a compromise on the issue.

In a research note, Elevation Partners analysts Stephen Sweeney said that full-blown Title II has little chance of passing regulatory muster, especially in the wake of the Republican Party taking control of the U.S. Senate in the recent mid-term elections.

“The FCC has jurisdiction over Net Neutrality and Democrats do have the edge 3-2 at the FCC, but we are very skeptical that Chairman Wheeler would yield to Obama’s pressure on this,” Sweeney wrote. “First, Wheeler would not have allowed his hybrid proposal to be leaked in the press if he wasn’t serious about pushing it forward. But after the mid-terms, we are not sure how much clout Obama has at all left to influence policy outside the use of executive orders.”

Cable operators began voicing their opposition to Title II, with Charter stating that a return to "1930's-era rotary telephone" telecom regulation is not the answer to an open Internet.

"Charter Communications unambiguously supports an open Internet, which is vital for consumers and central to our continued success," Charter said in a statement. "The extraordinary growth of broadband service in the United States, which now reaches more than 70 million households, has largely been the result of the current regulatory environment. For these reasons, we strongly oppose the reclassification of broadband as a Title II service under the Telecommunications Act. Efforts to reclassify broadband ignore the fact that the current rules have encouraged billions of dollars of investment in our broadband infrastructure and Americans' access to open, fast, and reliable service has never been greater.  Applying 1930's-era, rotary telephone legislation to a 21st century computer technology comes with significant risks to consumers. It is a solution in search of a problem and threatens to undermine continued investment to improve and expand our nation's broadband infrastructure."

Suddenlink Communications chairman and CEO Jerry Kent, in the midst of its own $250 million broadband upgrade dubbbed "Operation Gigaspeed," said a return to Title II would squelch any investment in the telecom infrastructure.

"To date, the bipartisan approach to the Internet of a light regulatory touch has resulted in  billions of dollars of investments and the creation of new jobs," Kent said in a statement. "In fact, this light regulatory approach was considered in our recent decision to invest nearly a quarter of a billion dollars in Operation GigaSpeed, which will bring 1 Gigabit service to households across our footprint. If the government changes course now, abandoning its light regulatory approach, it will threaten not only our planned investments, but the investments planned by many others.  Now is not the time – with an economic recovery that is tentative, at best – to discourage private sector companies from making new investments and creating jobs."

The FCC should stick with a consumer cost-benefit analysis when deciding on the Comcast/Time Warner Cable merger, and that analysis will show that no consumer will lose a choice among providers since the two companies do not compete head to head in providing broadband or traditional video programming.

That was the message from free market think tank The Free State Foundation in comments to the FCC, whose initial comment deadline on the proposed deal is Monday (Aug. 25).

Free State says it is neither endorsing nor opposing the deal — though it finds a lot to like in the deal and not much arguing against it. Rather, it advises the FCC to stick to an economic impact analysis of whether the deal will hurt or harm consumers.

That, says the group, means the FCC "must disregard pleas for it to reject Comcast/TWC out of hand based on appeals to emotional incredulity or irrelevant "big is bad" sloganeering."

It also means "'[standing] firm against calls made - under the guise of protecting competition - to impose conditions on the merger in order to protect market rivals from the competitive process."

As a venture capitalist, FCC Chairman Tom Wheeler suggested deal conditions could morph into rules of more generally applicability, but as chairman has endorsed deal-specific reviews and remedies.

"Further, the Commission must reject dragging out its review process and thereby making itself even more susceptible to political pressures having little or nothing to with the potential consumer welfare benefits of the proposed transaction," says Free State.

Free State sees a number of potential upsides to the deal, including accelerating the transition from analog to digital cable, faster broadband speeds to more people, boosting enterprise (business services) competition, and expanding wireless backhaul infrastructure.

And if the FCC finds some argument for harm, says the think tank, it should require evidence of actual or likely consumer harm before "even considering" blocking or conditioning the merger.

To check out the full comments, click here.

FCC chairman Tom Wheeler has secured enough votes to pass his proposed E-rate reforms at today's meeting, according to an agency official speaking on background. that will almost certainly be on a straight party line vote.

E-rate is the Universal Service Fund subsidy that goes to provide advanced telecommunications to schools and libraries.

In the wake of concerns from the Hill and elsewhere about the migration of E-rate funding to wireless broadband and its impact on funding of traditional broadband connectivity, the order is now said to include a "safety valve" that makes sure that support for that basic service is not eroded by Wi-Fi demand.

The commission will seek comment on long-term funding for the program, and include an evaluation of the Wi-Fi migration as part of that long-term review.

Republican commissioner Ajit Pai has been vocal about his opposition to the item and billions in Wi-Fi  investment he said could expand the fund while shortchanging basic connectivity, especially in rural areas. In addition, House members and Senators from both sides of the aisle wrote to express concerns about prioritizing Wi-Fi, including Sen. Jay Rockefeller (D-W. Va.), who helped create the program and is the former boss and mentor to FCC commissioner Jessica Rosenworcel, whose vote the chairman needs to pass the item unless he could get a Republican vote for the proposal.

The E-rate item puts it on a path to an all-broadband subsidy by phasing out phone and other legacy services--like pagers--freeing up $2 billion for Wi-Fi.

The new rules fully commit the E-rate program to an all-broadband future, one of the Chairman’s major  objectives,  by transitioning traditional phone and other legacy services out of the program over the next several years. The FCC will pay for the Wi-Fi push by freeing up $2 billion in excess reserves and phasing down support for non-broadband services such as pagers and helping schools and libraries be more efficient in their purchasing practices.

Two new reports demonstrate the accelerating scale of Washington lobbying in connection with the Comcast/Time Warner Cable merger and with the FCC's network neutrality proceeding.   

Comcast is currently registered with 40 firms, and it spent $5 million lobbying Congress during the first quarter of this year, according to Senate reports as quoted in Politico, which calls Comcast's campaign "a K Street stimulus package."  Among Comcast's recent lobbying recruits is Joseph Gibson, who once served as chief minority counsel for the House Judiciary Committee and also as chief of staff for Rep. Lamar Smith (R-Texas), a former chairman of that committee. 

For its part, Time Warner Cable has spent $33 million so far this year, according to official records.

Separately, Maplight, a Berkeley, Calif. organization that compiles data about campaign contributions, has identified 28 House of Representatives members - including Speaker John Boehner (R-OH), Majority Leader Eric Cantor (R-VA) and  Communications Subcommittee Chairman Greg Walden (R-OR) - who have urged the FCC not to adopt a Title II reclassification of the Internet and who also have received well-above-average campaign contributions from the cable industry.

The 28 House members (eight Republicans and 20 Democrats) who signed one of three recent letters to FCC chairman Tom Wheeler have received an average of $26,832 in contributions from the cable industry, says Maplight. That sum is 2.3 times more money than the average for all members of the House of Representatives, $11,651, according to Maplight's research.  In their letters to Wheeler (two of which were signed only by Republicans, one signed only by Democrats) the House members advised the Commission to reject the reclassification plan as a means to assure net neutrality, a position supported by the National Cable & Telecommunications Association, Comcast and many other cable and communications firms.

Walden has received more money from the cable industry than any House member: $109,250 over the last two years, says Maplight. Overall, Republicans signing the letters to the FCC have received, on average, $59,812 from the cable industry, five times more than average contributions to House members; Democrats signing the letters received an average of $13,640 from the cable industry, 1.2 times more than the average, according to the Maplight analysis.

In its evaluation of the congressional appeals to the FCC to reject Title II reclassification, Maplight cites three letters sent to Wheeler in recent weeks:

Letter 1: Signed by Energy and Commerce Committee chairman Fred Upton (R-MI), Subcommittee on Communications and Technology chairman Greg Walden (R-OR), Energy and Commerce Committee vice chairman Marsha Blackburn (R-TN), and Subcommittee on Communications and Technology Vice Chairman Bob Latta (R-OH) expressed "grave concern" about the Title II approach and warned that, "Such unwarranted and overreaching government intrusion into the broadband marketplace will harm consumers, halt job creation, curtail investment, stifle innovation, and set America down a dangerous path of micromanaging the Internet."

Letter 2: Led by Rep. Gene Green (D-TX) and signed by John Barrow (D-GA), Sanford Bishop (D-GA), George Butterfield (D-NC), Bobby Rush (D-IL), Corrine Brown (D-FL), Joaquin Castro (D-TX), Alcee Hastings (D-Fla.), William Owens (D-NY), Loretta Sanchez (D-CA), Albio Sires (D-NJ), Nick Rahall (D-WV), Kurt Schrader (D-OR), Bennie Thompson (D-MS), Marc Veasey (D-TX), Lacey Clay (D-MO), Gregory Meeks (D-NY), Scott Peters (D-CA), Henry Cuellar (D-TX), and David Scott (D-GA), the message to Wheeler said, "While we still have further to go to ensure that the benefits of broadband reach all Americans, we are concerned that opening the door to subjecting broadband service to a wide array of regulatory burdens and restrictions, including imposing Title II, might halt this progress."

Letter 3: Signed by House Speaker John Boehner (R-OH), House Majority Leader Eric Cantor (R-VA), House Majority Whip Kevin McCarthy (R-CA), and House Republican Conference Chair Cathy McMorris Rodgers (R-WA), expounded, "As we continue to ask the world to keep their hands off the Internet and to allow people to freely engage with each other, we should lead by example and reject calls to return to a bygone model of network regulation."

Maplight's analysis points out that a recent Comcast filing to the FCC in the network neutrality proceeding used similar arguments, such as: "Title II would spark massive instability, create investor and marketplace uncertainty, derail planned investments, and slow broadband adoption."

Maplight tallies 29 members of Congress who own stock in Comcast, making Comcast the 25th most held stock among members of Congress. Minority Leader Rep. Nancy Pelosi (D-CA) owns more Comcast stock than any other member.

According to Maplight's tally of campaign contributions "from cable interests" during the past two years, the top recipients who signed the recent letters to Wheeler are Walden (who received $109,250), Cantor ($80,800), Boehner ($75,450), Upton ($65,000) and Barrow ($60,500).

Gary Arlen follows telecom/media policy and technology at Arlen Communications (www.Arlencom.com)

After his new Open Internet plan narrowly passed its first test — the recent 3-to-2 vote in favor of the proposal, which sent it into the public comment phase — Federal Communications Commission chairman Tom Wheeler is in for the fight of his career.

While the new chairman has taken a hardline stance to safeguard Internet availability, vowing to keep the spirit of network neutrality alive, his decision to allow Title II reclassification of broadband to remain on the regulatory plate has set off a firestorm of controversy.

Cable operators have argued that Title II rules, which would essentially regulate Internet service as a “common carrier,” like phone service, would unravel all the advances made by Internetservice providers over the past decades.

On the other side, technology and Internet giants like Google, Facebook, Yahoo and Twitter proclaim that a free and open Internet should be devoid of individualized bargaining and discrimination, tenets which some believe are the cornerstones of Title II.

The cable industry has faced down the threat of Title II before — most recently in 2010, when then-FCC chairman Julius Genachowski proposed using the reclassification as part of his national broadband plan. While the industry managed to dodge that bullet in the short term, this time it appears that Title II is closer to becoming reality than ever before.

About 150 technology firms, including Google, Amazon, Facebook, Netflix and Twitter, fired off a letter to the FCC recently urging the agency to adopt policies that prohibit “blocking, discrim ination, and paid prioritization” that would “make the market for Internet services more transparent,” which some have interpreted as a veiled endorsement of Title II. One doesn’t have to look far back in history for proof of the sheer power of these tech giants when they decide to back a policy issue.

Motion Picture Association of America chairman and CEO Chris Dodd had his proverbial head handed him to him during his campaign to stop piracy in a rout by some of the same companies now calling for reform. The failed Stop Online Piracy Act (SOPA) and its companion, The Protect Intellectual Property Act (PIPA) of 2012, two bills that were forged to stem what content companies had claimed was an epidemic of users with ultra-fast Internet connections stealing their wares, was summarily crushed. Once Facebook, Google and others unleashed their considerable user bases on the issue, a tidal wave of protest quickly ground both pieces of legislation into dust.

“In a period of seven or eight days, you have the unprecedented action where 7 or 8 million emails showed up on the computers of members of Congress; 13 million at the White House,” Dodd told MultichannelNews in 2013. “This was a tsunami. [Netflix CEO] Reed Hastings said to me it was almost like a swarm of bees. We’ve never seen anything like it before.”

Many believe the same scenario could take place with Title II, with the Internet giants boiling down the issue into a simple “Free Internet or Not?” debate, as the government bogs down in explaining the minutiae of the issue while its earnest message of punishing bad players gets lost on confused consumers.

“It’s hard to argue against a bumper sticker,” MoffettNathanson principal and senior analyst Craig Moffett said. “And net neutrality is a bumper sticker.”

Already the battle lines are being drawn. Last Thursday (May 15), several public advocacy groups were staging protest rallies to drive home their Title II agendas — liberal groups Free Press, MoveOn.org and CREDO Action planned a 19-city rally, including one in front of FCC headquarters in Washington, D.C., to push net neutrality. In Congress, 20 House Democrats urged Wheeler to take Title II off the table, claiming it would stifle competition, while another three dozen Democratic House members called for Title II to be adopted.

Over the next 120 days — the length of the FCC publiccomment period — Wheeler, the other FCC commissioners, private business, public-interest groups and the general citizenry will have ample opportunity to weigh in on the issue.

Anything can happen in politics, and conventional wisdom leans toward the government simply not acting on the issue. But if Title II does get traction, companies and consumers can expect some big changes. Here’s a look at what many of the industry’s leaders in government and business think is possible.

1. Title II could lead to higher prices for broadband service, as ISPs are allowed to charge transport and termination fees and usage-based pricing becomes the norm.

While Wheeler has stressed that he has no intention of creating “fast lanes” and “slow lanes” on the Internet that would give priority to content providers that pay for faster access, Title II does not prohibit ISPs from charging for transport and termination of service. While pricing would be set by the government — by way of tariffs like those for electric utilities — it also would not stop providers from charging more based on bandwidth usage.

While cable operators are loathe to utter “usage-based pricing” in mixed company, in a letter to the FCC they alluded that Title II would not prevent ISPs from going down that route.

“In defending their approach, Title II proponents now argue that reclassification is necessary to prohibit paid prioritization, even though Title II does not discourage — let alone outlaw — paid prioritization models. Dominant carriers operating under Title II have for generations been permitted to offer different pricing and different service quality to customers.”

This could backfire for online subscription video-on-demand providers like Netflix, Amazon Prime and Hulu Plus, which use large amounts of bandwidth to deliver their service. It is estimated that Netflix alone accounts for one-third of Internet traffic.

“It’s possible that a net-neutrality ruling would push the industry into usage-based pricing territory. That would be a disaster for Netflix,” Moffett said. “For all the online video companies, usage based pricing would be the worst thing that could happen.”

Title II could place a mountain of regulation on Internet service — including pricing limits — to ensure that it is available to everyone at every time. Then there is the danger of the traditionally nimble Internet being mired in government bureaucracy and inefficiency.

As the NCTA said recently, there were 307 electric blackouts across the country in 2011 (up from 76 in 2007); one in three U.S. roads are in poor or mediocre condition and there are an estimated 240,000 water main breaks annually.

2. A new regime of rules could force a wave of consolidation among small operators, forced to sell their companies because they cannot keep up with the new regulations.

Already, some small MSOs have said privately that they foresee scores of providers from within their ranks throwing in the towel in the wake of Title II.

Buford Media CEO Ben Hooks said that for small operators, Internet service is the main reason for existence. The government setting prices and heaping more regulation onto broadband would only serve to destroy the business for the small operator. For that reason, he hopes that the FCC won’t implement Title II.

“When operators say [Title II] will be the last straw, it will be,” Hooks said. “I’m just hoping that Title II doesn’t happen.”

Cable operators are governed under Title VI of the Communications Act of 1936, which does not require nondiscrimination at the level that the Open Internet rules do.

“The Title VI world never had to know Title II,” Precursor LLC president Scott Cleland said. “This is a morass that is alien to them.”

3. Cable operators say Title II will stifle future investment and innovation in broadband, a network of fiber and coaxial cable created by private investors — not the government.

With the government setting prices — and profit margins — on broadband service, cable operators and telephone companies alike will have little incentive to continue investing in the broadband business. According to a letter sent to the FCC on May 13 and signed by top cable and telecom executives, about $60 billion is spent on cable, fiber, fixed and mobile wireless, phone and satellite broadband networks each year.

“Reclassification of broadband Internet access offerings as Title II telecommunications services would impose great costs, allowing unprecedented government micromanagement of all aspects of the Internet economy,” the letter said. The CEOs noted that the last Title II threat in 2010 had an “investment-chilling effect” by erasing about 10% of the market cap of some ISPs.

“Today, Title II backers fail to explain where the next hundreds of billions of dollars of risk capital will come from to improve and expand today’s networks under a Title II regime,” the CEOs stated. “They too soon forget that a decade ago we saw billions newly invested in the latest broadband networks and advancements once the Commission affirmed that Title II does not apply to broadband networks.”

Innovation, once the watchword of the Internet, also could go by the wayside under Title II, the CEOs claimed.

“Under Title II, new service offerings, options, and features would be delayed or altogether foregone,” the CEO letter said. “Consumers would face less choice, and a less adaptive and responsive Internet. An era of diff erentiation, innovation, and experimentation would be replaced with a series of, ‘Government may I?’ requests from American entrepreneurs. That cannot be, and must not become, the U.S. Internet of tomorrow.”

In a recent blog posting, American Enterprise Insitute Center for Internet, Communications and Technology Policy visiting fellow and president of Entropy Economics Bret Swanson said that keeping Title II out of the Internet was “one of the best economic policies of the last generation. Unleashing Title II on the Internet could spread an epidemic of confusion and litigation across an Internet environment that over decades has developed millions of fruitful technical and commercial connections outside (and often oblivious to) the old Title II regime. In short, Title II would threaten Internet innovation at its very foundation.”

4. A new set of rules will certainly spark a wave of lawsuits from nearly every side of the issue, from distributors who would seek to block the move to Title II and protect their current multibillion-dollar investments in Internet infrastructure to content providers looking to ensure their placement and availability on the Web.

Cleland likened the advent of Title II to a crowd of people firing machine guns in a circular metal room — you never know who or what is going to get hit. The Precursor LLC president said Title II would set off a firestorm of litigation. “It would create a free-for-all for interested parties to interpret things their own ways. You could come up with dozens of scenarios over several years.”

Cleland added that Title II has about 1,000 separate items, all of which would be up to countless numbers of interpretations.

“It would be a litigation frenzy from almost every angle,” Cleland said. “It would only be limited by the imaginations of the people who want to sue.”

5. How the government implements the rules could change the way distributors and content providers do business with each other.

No one — not even government regulators — can say exactly how Title II could affect programming deals. According to Moffett, under the strictest Title II interpretation, cable TV is technically illegal because operators designate specific blocks of spectrum (a 6-Megahertz cable channel) to a specific content provider at a specific price.

“Allocating a 6-MHz channel for an analog stream of ESPN, and another six tenths of a digital channel for a digital stream of ESPN and another 2.4 GHz channel for an HD stream of ESPN; they’re are all illegal in a pure net neutrality world,” Moffett said. “They’re all contractual carriage deals. Does it really matter if the traffic is encoded in MPEG and QAM or if it’s encoded in IP?”

While the FCC could waive that provision under some form of forbearance, Cleland said it is not that simple. The FCC is allowed to “forbear,” or basically ignore, certain aspects of a regulation for the public good. But any forbearance must be detailed and written into the regulation, he said, which could add a lot of time to the process.

“They can’t do an omnibus forbearance,” Cleland said. “You have to literally write out what you mean and what you don’t mean. Each issue is different and there are legal decisions as to why you do one and not the other. It would take months or years just to figure out how to do it.”

John Eggerton contributed to this report.