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Wheeler Contacted Obama Administration About Net Neutrality

FCC chairman Tom Wheeler said Tuesday that he does not think paid priority will pass muster under his proposed new network neutrality rules. He also said he had reached out to the Administration on the network neutrality issue, but that it had not tried to direct a decision.

That came in an oversight hearing in the House Communications Subcommittee where, as expected, he was peppered with questions from both sides of the aisle about the FCC's partisan vote last week to launch new open Internet rules based on the FCC's 706 authority to insure a "virtuous" cycle of Internet access and adoption.

The hearing touched on a wide range of topics, including the FCC's limits on TV joint sales agreements—Wheeler said it was a necessary correction to a perversion of the system, the broadcast incentive auction—Wheeler agreed with Rep. Henry Waxman (D-Calif.) that he had "hit it out of the park"—and spectrum issues including freeing up more unlicensed spectrum—Wheeler got some love on that issue.

Rep. Mike Pompeo (R-Kan.) asked Wheeler point blank if he had spoken with anyone at the White House Office of Management and Budget about network neutrality—it was a campaign issue with then-Senator Obama, who has remained a supporter of open Internet rules.

Wheeler said yes, but only to keep it apprised. He said the Administration recognized the FCC was an independent agency and said he was the one who called them. He said from his discussions "with the President on down" that "never have I or anyone felt any pressure to decide any issue."

Rep. Doris Matsui (D-Calif.) took the opportunity at the hearing to call for oversight hearings on both the Comcast/Time Warner Cable and AT&T/DirecTV deals, echoing a call earlier in the hearing by Rep. Anna Eshoo (D-Calif.), yet another California Democrat who was pushing for strong net neutrality regs as well as hearings on the deals, with a particular focus on the impact on the deals on the Internet.

Wheeler would not talk about the deals specifically, but did promise to give them a good public interest scrubbing with consumers and competitions in mind.

Rep. Diana DeGette (D-Colo.) asked for Wheeler's general take on whether consolidation represented by the deals was a good or bad thing. He deferred, saying he would look at the record before him and make a decision in each case based on that. He said he would not want to prejudge that record. She asked whether he thought the conditions in the Comcast/NBCU deal had promoted the public interest. He said he thought "multiple things had," then went on to give a shout-out to the FCC's power in that sphere.

He said he strongly believed there was a big difference between the statutorily constrained antitrust oversight of the Justice Department deal review and the broader public interest issues the FCC is asked to look at.

But the major focus of the hearing was, not surprisingly, on network neutrality.

A contentious but respectful tone was set early by chairman Greg Walden (R-Ore.), who talked about the FCC's ignoring his advice and warning it might be heading for some "rough waters" in its relationship with the committee.

Wheeler sat tight-lipped and taking notes as Walden and other Republicans read him their version of the riot act over net neutrality. But his responses were firm and consistent: There will be no fast and slow lanes, there is plenty of time and opportunity for comment, and he is trying to follow the court's blueprint for sustainable rules that insure open access.

In talking about one Internet, Wheeler did not appear to have any love for special services carve-outs either. "I have consistently said there is only one Internet, not a fast or slow Internet, not a special services Internet," he said.

Republicans roughed up the chairman over keeping Title II on the table, but he repeatedly pointed out that the rule proposal was based on Sec. 706 authority, which he believed, per the direction of the court, was sufficient.

Rep. Henry Waxman (D-Calif.) praised Wheeler for the incentive auction item, particularly freeing up unlicensed spectrum and setting aside low-band spectrum for competitive carriers. But he said he was concerned that going the 706 route would impose weaker Internet protections in an effort to fit them into that regulatory mold. He counseled a belt-and-suspenders approach, with the belt being 706, and the Suspenders being Title II (or perhaps the other way around).

Wheeler pointed out that the open Internet item asked about how Title II would best be used if it came to that, but Waxman suggested it should be used from the outset as backstop authority.

Matsui said she thought paid priority should be banned outright. Wheeler echoed the sentiment, if not the declaration, saying he thought paid priority would not be commercially reasonable, the standard the new rules set for determining what discrimination might be allowable.

Eshoo said there was too much at stake for the FCC not to get the new open Internet rules right. She said "right" would mean preserving the values of an open, free and accessible Internet, the values of the country writ large. It would not be selling off bits and pieces of the Internet and creating fast and slow lanes.

She asked what the recourse would be against paid priority if the FCC determined there was no way to outright ban it under 706 authority.

Wheeler said that the court had given the FCC broad authority to promote what it called the virtuous cycle of content needing a conduit and the conduit creating opportunity for content. That is what the FCC is empowered to protect under Sec. 706, he said. "My proposal is that if something interferes with that, which I believe paid priority does, we can move against it."

Wheeler got some pushback on the related issue of preempting state regulation of municipal broadband. He said in his written testimony that he planned to use the FCC's authority to preempt state laws—he identified some 20 states—that he said inhibited municipal broadband, "adopted "at the behest of incumbent providers looking to limit competition.

Rep. Brett Guthrie (R-Ky.) suggested that the states may have passed those laws in the wake of failed municipal projects that left taxpayers on the hook for millions, while a Google was able to come in and buy the remainder for "a dollar."

Wheeler said he looked at it from the other end of the telescope. If citizens in a community want to organize through their local government to bring broadband competition, they should not be inhibited by incumbents trying to prevent competition.

Wheeler invoked network neutrality, citing a dissenting opinion in the court ruling throwing out the old Internet rules that if there were ever an example of applying 706 authority it would be in the ability to say to states that "you cannot get in the middle of this virtuous cycle and prohibit consumer access to competition."

John Eggerton
John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.